Crossover Podcast Episode - Wendy Liebmann & Future Shop

PVSB 0:00

Hey, it's PVSB. Please enjoy this special crossover episode with Wendy Liebman and her Future Shop podcast, where Shri and I were recent guests. We hope you enjoy it. And if you like what you hear, well, make sure to subscribe to Wendy's podcast on Apple, Spotify, or wherever great podcasts are found. With no further ado, let's listen to Future Shop.

SPEAKER_02 0:41

Hello everyone, I'm Wendy Liebman, CEO and Chief Shopper at WSL Strategic Retail, and this is Future Shop. Today I'm here with two very good friends, two very well-known very good friends, the CPG guys. I think most of you probably know them. If you don't, I don't know what rock you've been living under, if you're in the CPG digital media, AAI, retail media, fill in the blank space. But I am delighted to have both Peter V.S. Bond and Sri Rajikapalan with me today. Welcome, guys. Welcome, Sri.

PVSB 1:19

How's it going, Wendy? Thanks for having us.

SPEAKER_02 1:21

Welcome, Peter.

PVSB 1:22

Wendy, always a pleasure to spend time with you.

SPEAKER_02 1:25

Before I start my chat with Peter and Sri, I just wanted to remind you, please don't forget to subscribe to our podcast. We love to know you're behind the scenes. All you have to do is go to wherever you get your podcasts, Spotify, Apple, our website. Just click subscribe and we will know you are there. Thank you for that. Now, on to my conversation with Peter and Sree. Thank you. Thank you both for doing this. It's been a while, so I just felt it was definitely time to catch up. Just for those of you who do or don't know, CPG guys, if you do not listen to them regularly, they really talk a lot about the sort of convergence of brand and retailers and this digitally driven world we live in and that intersection of commerce and tech, which is so important to all of us now. They also have other day jobs, three with his Think Blue Consulting, Peter with Flywheel, and many other things that they get involved with every day. What I always think about you both for in my own mind is making sense of this journey we've been on over the last four, five, six years in terms of what is going on in this digitally or digitized retail world. When I first met Peter, everybody he was at CBS, CBS Health, doing a lot of analytic work and work around their loyalty program. When I first met Sree, he was at Revlon and then General Mills. And so they have a practical view to what's going on. I know this is a very big kind of question, but I keep saying in my own mind, where are we on this journey of this new world of commerce and retail? You know, Peter, where are we on this journey from the days you sat behind the CVS desk?

PVSB 3:09

Wendy, honestly, we're in the middle of what I think is the most disruptive chapter since the rise of e-commerce itself. And honestly, we're still writing it in real time. The infrastructure has multiplied dramatically. Retail media networks, social commerce, shoppable connected television, conversational AI, agentic shopping. Shoppers now have more entry points into commerce than ever before. But here's kind of the paradox: more channels doesn't always mean better served. We've built an incredibly sophisticated apparatus for reaching shoppers, but we haven't necessarily made their lives simpler. We've made the marketers toolkit more complex, and we call that progress questionable. But the journey's long, we're somehow in the middle of things. You know, we haven't even hit the seventh inning stretch yet. So the next phase where AI agents may actually execute purchase decisions on behalf of shoppers, that will be consequential. You know how brands are reacting to this. For years, brands built corporate websites and put a lot of content and thought about the customer journey. I just talked to 10 brand people just this week. Every one of them said, totally shifted our brand website strategy. It is no longer about the customer journey. It is purely a repository of data to feed LLMs. That is that's big. So we're not there yet. It's not theoretical anymore. There's a lot of activity going on in courtrooms. Um it Amazon's you know Cosmo framework, it's in what Rufus now rebranded. I think they just rebranded this week to Alexa Shopping, is doing every day at scale. It's we're it's a it's a hot mess right now, Wendy, if I had to summarize.

SPEAKER_02 4:52

Yeah. And Sri, where are you in that jack journey in in terms of what Peter's talking about as well? The biggest thing I've been thinking about, Wendy, recently is the role of the CMO, the role of the CCO.

SPEAKER_04 5:03

In a in a CPG brand and how that actually impacts retail. You know, folks like you, me, Peter, we tend to wear a CPG brand hat into most of our conversations, but the role of the retailer is one we often neglect, right? Retail has thrived, really made its trade rates, growth on the basis of trade funds from a CPG brand. Media has not been a focus for a retailer, and you rarely see a Walmart or a Kroger or a R holder of Food Lion actually running campaigns about their own brand equity development. We're now living in a world where retail media has come up by storm, as you know, last 10 odd years. Retail media is at the core of media, especially with most retailers struggling for inventory of on-site. It's all about off-site, and then the unleveraged in-store media aspect, a display and a feature at the end of the day in-store as people walk by is really media. The day a merchant realizes they can monetize impressions versus using the 40-year-old formula for how trade rates is calculated, the entire media ecosystem blows up completely. Because the number of touch points that retail allows will be as good as television, like a good programming on television, those 12 million household shows like FBI as a simple example. American Idol is another example. And what does that do to the role of a CMO and a CCO at a CPG brand? They've been purposely kept separate. One can focus on developing the innovation portfolio and advancing the equities of the brand. And then the CCO purely negotiates trade rates, owns the teams that actually sell to retail. But in the future, we're looking at a single funnel, top to bottom, we can call it what we want, full funnel, collapse funnel, really. It's all English language semantics. I think media has completely changed. Retail media has completely changed my perception of two years out and that to drop AI in the mix of how CPG brands and retailers will be engaging. What will they be engaging on? I feel like the PowerShift, which was largely 98-2 one way with the retailer, is going to shift to more 6040 with 60 still being in the retailer. I'm not so sure retail knows, understands, is ready or is anticipating any of that, but what an upheaval that will be on just funds in general.

SPEAKER_02 7:12

Yeah. So are you telling me, because you know I'm a novice in this space, all I think about is the shopper, right? Are we serving the consumer as shopper the way as you started this conversation, Peter? So are you telling me, Sri, that all this conversation around retail media that we hear when you, you know, either walk into a retailer's office or you look at their financials, um, are you telling me they don't they still don't get it yet?

SPEAKER_04 7:39

I would say just like government. We've done an excellent job in the industry of convincing our constituents, everything we do is in service off block, our constituents, the shopper. If that's the only narrative in town, there's not much of a challenge that can argue against that whatsoever. AI is gonna change that completely and put the power completely in the hands of the in the hands of the shopper. I'm gonna argue that we never got it right in the first place. All retail retail set their footprint based on distribution, aisles, things of that nature. When was the last time you saw 27 aisles in a store become 23 or 30 or a complete renovation of an aisle? All it is is a category management planogram based on anniversary last year for a growth rate supplied by corporate. It's not a true in service of the shopper, and then we'll claim that when there's a flood, we give out water bottles where in service of the shopper community. The person standing behind the deli who wishes you, Miss Wendy, welcome. Would you like four ounces of beef? That's called serving the community. AI is gonna throw, make all that a joke of the past. And yet, I'm telling you, listening to this, retail merchants will be like Shri's wrong, that's what the community is. They're not ready for what's coming up, where a planogram will not be deciding what a shelf looks like, as they have in the past. And the old methodology of anniversarying and doing it will be history.

SPEAKER_02 9:00

So does that mean, Peter, that we don't have the right people in those chairs and that we're going to need totally different organization to be managing this?

PVSB 9:11

I think first and foremost, we need alignment on our objectives. The problem is that what the retail media network is measured and performed against is is in many cases fundamentally different than when the merchant is doing. And so the merchant doesn't really understand it, isn't bought into it, and therefore they see it as being competitive, right? Look at uh a vendor who's just come to them and said, Hey, I met with the retail media team. They said I should invest this. Here's here's the dirty little secret, Wendy, and it really comes down to budgets. I just had an opportunity to speak with a whole bunch of brand media investors. And what they told me was that for two accounts, Amazon and Walmart, they manage it centrally at headquarters. Everything else is being managed by customer teams, and the budget is controlled by the customer teams. That's trade funds, right? Now, if I'm a if I'm a buyer at a retailer and I understand that fundamental truth, then every dollar that goes into retail media is one less dollar that I get to use for displays, for in-store activation, for everything else. So I look at that as competitive. And not only is it not incremental, but remember in the world of ad tech, when you run a programmatic advertisement, you don't retain all that money like you do when you sell a display. You have to share with ad tech partners. Now it's actually eroding the amount of money that I'm keeping. So it's not productive, it's truly counterproductive. So until retailers get a better understanding and have alignment between their entities, that won't change. But even if they do have alignment, Wendy, the fact of the matter is that the other the other truth is that the dollars because they're coming off the trade, it's never going to be incremental until there's a massive shakeout among everyone other than Walmart and Amazon. There's consolidation. They go to it, they they create alliances, single points of entry, getting very like I remember talking to one New York-based grocery retailer, and I said, You're trying to sell your own retail media platform. If I were you, I'd get on a plane fly to Cincinnati, knock on the door of Kroger, and tell them, hey guys, guess what? You're missing New York. I got New York. How about you just plug me into Kroger Precision Marketing? Right? Because yeah, you're gonna have to give some of your margin to Kroger, but I'd rather have 70% of something than 100% of nothing because right now you're not selling anything to brands. There is some major shifts that have to occur. So I absolutely agree with with what you said about the talent and the skills, but we still have to work out the financial mechanics to make media work for everyone other than Amazon and Walmart. Otherwise, they're just not going to succeed. They're not gonna succeed.

SPEAKER_04 11:58

When you go, I want to put some icing on the cake in terms of talent, right? Peter talked about the media world pretty extensively there, so I'm not gonna repeat that that talent. I look at who runs retail. I'm not picking on retail today. This is not radically different from CPG brands, right? We now know that 100% of our in-store purchases, which is still in our grocery world, 85% of all shopping, 100% is influenced by digital. And you want to say 69.8 pi r square is just making nonsense up. We all spend hours on our digital devices, whether we want to admit that or not, that's just the reality. Survey after survey stat or a stat says so, so I'm not gonna debate the data. How many CEOs of CPG brands or retail CEOs or chief merchants or CMOs have TikTok accounts? How many? That's where trends are forming. Like there's no if no, maybe we'll make excuses. Privacy. You're okay snooping on the privacy of other consumers for the purpose of your brand, but you won't have an account and you're using privacy as an excuse? Shame on you. I think I think talent today is built for the 80s, 90s, and early 2000s when everything was based on distribution in an in-store via planogram. That model is slowly getting flipped, and who we have in leadership across the board, whether retail or CPG, are largely PL managers ready to deliver a dividend quarter over quarter over quarter. If you go back to the 80s, 90s, and early 2000s, that is what the industry needed. That was the ask. Today, the industry needed people in leadership positions who understand more than ever the shopper and cannot outsource it four levels down onto a separate department. They need to walk their stores, they need to online store walks, and they must understand media and social. If you don't have those four skill sets and you're just a PL manager, remain a Wall Street darling, but remain challenged on volume. The last two years approved, you've got a bunch of PL managers and not consumer-focused people to your earlier question, the first question you asked, which is the consumer-facing view.

SPEAKER_02 14:05

Yeah. So with all that, Peter, you said we're sort of in the middle, middle of the chaos as we're learning and going. So you're saying that you know the organizational structure, the focus of the structure is not looking at where it should be looking for the CPG.

SPEAKER_04 14:22

Well, I want to say between Peter and my views, there are two takeaways here. We've definitely got a structural problem, and skill which is a skill set is causing the structure to stay the way it is, lack of awareness. Peter actually said something very profound as well. Incentives is the other issue.

SPEAKER_02 14:39

Yeah. Well, I think about that in old world days when you would see retailers finally understand that I'll give you the example of, you know, mums with babies, right? And they would have to walk into a store, and there would be the diapers are here and the bottles are there and the prams are there, whatever was whatever. And finally the two big retailers said, Oh, surprise, surprise, why don't we put it all together in a baby center department, etc.? That was the moment when there was the fighting between the merchants, the buyers, saying, wait a minute, I've got this, you've got yeah, whatever. So it feels like in service of the consumer as shopper, that by itself is a massive challenge. So are we at that same point that we're saying if we don't now begin to look at this through the lens of the consumer as she or he thinks about their whole world ecosystem, that we are just gonna it's gonna remain chaos. We're not gonna be able to, you know, articulate the growth that we need to have. Is that is that are we at that moment?

SPEAKER_04 15:45

I'm gonna make two or three statements and then look to Peter to navigate this one. But the clear answer and that, Wendy, is this country got challenged by volume from a CPG and retail standpoint in March 17, 2023, when the first government assistance checks snapped, EBT started getting impacted. Three years later, we're still hearing excuses. No one is really proved it, with the exception of a one-two percent who are truly exceptional at what they do, retail. Walmart is a great example, Azon is a great example. But when you start diving deeper down after that, Costco DG, that's pretty much it. Everyone else is struggling. CPG brands, you've got the PNGs, you've got maybe Clorox, you've got three or four up top, and then everyone else is struggling. The number one reason they're not back on track and they're struggling in this, even though they claim it, you see that cagny, consumer understanding, they're not there. Today you cannot be a leader in the industry or grow without a deep consumer understanding.

SPEAKER_02 16:38

Let's just take a quick break from the great conversation with Peter and Sri. I just want to remind everybody that on June 26th in New York City, we are holding our biannual health and wellness symposium, this time called Women's Wellness: The Next Revolution. This is a bold and impactful look at what we all need to do to grow in this space in the coming years. We've got retailers, we've got brands, we've got investment companies, we've got medical professionals from Walmart to Ulta to Mecca to Morgan Stanley, a whole slew of great speakers who will be talking to us about the opportunities in women's health and wellness. So join us at the revolution. Go to our website, www.wslstrategicretail.com, and you'll be able to click on and sign up. We look forward to seeing you there. It's going to be revolutionary. Now back to my conversation with the guys. And and one of the things that disturbs me in all of this, and then I'll throw it to you, Peter, is that you you hear these companies talking about we are going to, you know, grow by putting the consumer in the center of everything. And I'm like, where have you been, people? What have you been looking at? And that's why I worry about Peter. You were talking about investment. You know, we talk about all the new things that people are spending their money on. So anyway, but but to to respond to his point, Peter, sorry if my hair was on fire for a minute, even though it's now blonde and not red. You didn't even comment, you guys, that I'm now blonde, but don't worry about me. It's fine. It's all right.

PVSB 18:12

Do you have more fun, Wendy? That's all I want to know.

SPEAKER_02 18:14

I don't know yet. It's a little early. It's only a couple of months in, but I'll let you know next time we see each other. So anyway, Peter, back to you on this whole conversation of consumer shopper.

PVSB 18:26

I want to double down on what Sri said because it it does really get to the heart of what you said is they say we're focusing on the consumer, but are they really? Anyone who follows CPG Guys knows that Christmas for us comes every February when the CAGE conference convenes down in Florida. This is the consumer analyst group in New York, where roughly about 30 publicly traded big staples companies get together and they trot their CEO and their CFO in front of all these analysts. And it's kind of like a massive series of investor presentations. The one that caught my attention was Unilever. And it caught it caught my attention because they talked about how they had substantially restructured and weeded out both senior leadership and their board of directors because they knew they needed new blood to enable the changes necessary to refocus their company for growth. Right. So here's what I would say to you. If you look at a company and everyone at the senior level built their way up through the company from right out of college, and you look at that and you look that their numbers are suffering right now, what belief should you have that this group of people is going to be the leadership team that is going to usher in the kind of step change growth necessary to deal with these, the incredible pressures of volume challenges and really being able to focus on the consumer, to be able to understand what social media is, to be able to think about a gen tech. I don't, if I were, if I were an investor in one of these companies, that is something that I would seriously question from leadership. So every time you see someone anointed as the next CEO in waiting, and that person has come up from an entire career at that same company, I'm sorry, I'm not buying what you're selling. I'm just not. I don't think they're really positioned to do it, Wendy. So that's a real concern.

SPEAKER_02 20:21

Does that apply? I mean, I think about we've gone through this last six months, twelve months, quite a lot of change in some of these big organizations, whether it's, you know, the handover at Walmart, whether it's Target, whether it's Dollar General coming up in terms on the retail side, we see all the spin-offs going on still between Kimberly Clark and Kenview and all of those things going on and who's running the show. Not to trash anybody anywhere, but do you see and throw in Apple? You know, let's throw everybody in in this discussion. When you look at all the companies that you both talk to and and observe, are there companies on the retail or the CPG side that you say, actually, I think they're getting it right?

PVSB 21:05

There are. I'll let Shree Shree. I'll let me I'll give you a couple and then I'm sure Shree will throw in. I think the reason Walmart does so well is because they they were selective about who they brought in and they focused them on certain areas. Walmart was brilliant to bring in Seth Delaire from Instacart. He has built out a revenue model around Walmart Connect, around Walmart Plus, around Walmart Data Ventures that fundamentally changed the profitable trajectory of the company. Now, you needed a good store operator like John Ferner to keep going in the right direction, but make sure you have the right people at leadership positions to help bring that new focus in. So I think Walmart's done a great job, right? There are others that clearly haven't. Target is struggling right now. They just are. I asked seven or eight manufacturers this week. I said, How many of you have deprioritized Target in your 2022? Six plans. Every single one of them held their hand up. That is a that is a damning indictment, as far as I'm concerned. From a brand standpoint, you know, L'Oreal is just phenomenal. Let's let's face it. They always they always deliver. But you know, there are a lot. Shree, I'm sure you you've got a couple that are going to come to mind as well.

SPEAKER_04 22:26

I want to go back to the Walmart example and talk about what why are they so exceptional? Why are they on such a growth trajectory? What what are they doing right, right? So Peter already referred to the digital angle, they bought in the right people like Seth Delair. So I won't repeat that. I think one simple act that they did about a decade ago has been a path for success for them. They took Amazon seriously. They knew Amazon would be a general merchandise, super center competitive period, including grocery. Walmart is the largest grocer in America, and they knew they need to take it seriously. And they've been following, they've been building, and they understood we gotta get close to the consumers, operate in a way that we make it friction free for the consumer. Most other retailers are like, yeah, they're the every everything retailer. We're not really competing with Amazon. There is nobody in grocery. The problem is Amazon is taking away trips and journal merchandise, and when it takes those consumers with them, the Senestore starts to move. You lose Senestore, you really become a fresh and perimeter retailer, which is where most of their volume struggles are for retail. Very few of them are struggling on perimeter and milk, eggs, bread, meat. They're all struggling on Senusore. That's where the volume is gone. It's all moved to Amazon. I think that's a very important part. I look at some of the others in the retail landscape, Dollar General benefiting significantly from the economically challenged country we've become in the last four or five years since COVID. Just paycheck to paycheck, being able to affordability crisis, gas prices being high, which impacts just a whole list of supply chain things, going back into pricing. So Dollar General is certainly benefiting from that and starting to go into food desert areas, opening stores in the right locations, really saying groceries gonna be a big focus. Peter and I went down to the headquarters in Tennessee. We actually did a live episode from a store, a model store, which is one of their flagships for food and fresh. So you know, Costco's another one that's benefiting. People think Costco's surprise and delight, it's really value. The consumer, when they get a paycheck, is looking at buy seven units significantly cheaper on a per item cost, and Costco's significantly benefiting from that world as well while keeping fresh, while keeping surprise and delight ready. And really, Amazon is the only one I'd put into that bucket. I have no offense to anybody else, but it's in the numbers, and the numbers don't lie. Then I look at CPG. Peter gave an excellent example. Watch Unilever in the next few years. Unilever's CEO walks on stage in front of 700 Wall Street analysts and says, My board has changed 70% in the last year. And and the normal reaction would be, you don't know how to retain people. He said, That's my intent, skill set. I only want people on this board who know and understand the consumer. Wendy, we want to flip this question over to you. You're in the middle of consumer insights every day for a living. That's what you do at WSL. What are you seeing? What's changed? How's the consumer responding? What are the crisis moments of the times? We'd love to hear from you.

SPEAKER_02 25:19

Thank you for that. You know, one of the things that I look at is the fact that people are now willing to buy from so many different places. And they their loyalty is so pragmatic that all the things that they think about at this moment need, I'm sitting here at my desk, what do I need? Anything that might I need right now, right? From what's for dinner tonight to I'm out of a prescription to I'm my nail polish, oh, that's sticky. I need a replacement. And the notion of convenience being the supermarket down the on the corner or the drugstore on the corner is like, what? I can click here while I'm talking to you, right? And it'll be here. We always laugh. By the time I click it's at the door, well, maybe not quite, but it'll be here very quickly. So I think about the terminology that we as an industry use to describe our point of difference, whether it's innovation in product or it's innovation in, or it's just the way we're on the corner, we're convenient, has absolutely no meaning to the consumer anymore, a shopper. And there feels to me like there's this huge wall of disconnect between the shopper and the retailer, whatever form that takes, the traditional retailer. I think the other thing that we're seeing, and you didn't mention this retailer, but I think about Aldi all the time. And I think about as I look at that curated, affordable, accessible, whatever, whatever the terminology is, and the improved quality, your surprise, delight, you know, the Costco writ small, and that trip that it takes away. And more and more you walk into the parking lot, right? And see the cars in the parking lot. Your point about people who are moving into other places to buy. What concerns me most, if you, as I say, this pragmatism around the shopper who says, I'll just whatever it is. It's in a physical store, it's in a digital store, it's in a high, low, I don't care. It's what do I need and who's helping me solve my, you know, the old world jobs to be done. And so I feel like we're on two different paths, which is my big concern.

PVSB 27:29

Let me let me extend that on what you said on Aldi. I couldn't agree more. I absolutely think they've built an assortment and a compelling value proposition. I never shopped Aldi until the last two years. Now it's a it's a it's a standard part of my shopping trip, and it's where I get all my staples. But as much as they seem to be in tune, I worry that their sister company, Trader Joe's, is losing that focus. Right. The single biggest post I made on LinkedIn last year from an engagement perspective was the open letter I wrote to the leadership at Trader Joe's saying, isn't it about time you got into e-commerce? People were almost militant about their position on this. I don't want e-commerce. I don't want a click and collect line in an already crowded parking lot. I don't want this, I don't want that. And my response was, why does it have to be that way? Why can't they do dark stores? If I did a dark store, does that stop you from shopping your local store? No, it doesn't. But a lot of people were still like, no, I don't, even if it's a dark store, I don't want you to have the ability to go shopping, even though you've got three kids and it's hard to get them out of the car. It's hard to get them into a store. They still are are violent about it. And Trader Joe's doesn't seem to want to deal with the fact that we live in an omnichannel world.

SPEAKER_03 28:49

Yeah.

PVSB 28:50

And they can do that only for so long.

SPEAKER_03 28:53

Yeah.

PVSB 28:53

Because their pride in trying to say we're never going to be digital seems to be foolhardy. And I just don't understand why they have to behave that way. Why, why can't they embrace it? They don't have to, they don't have to do what everybody else is doing, but you've got to realize that some of your customers would shop more with you if you made it easier for them to shop with you.

SPEAKER_02 29:17

Yeah. Yeah. I do, yeah. So so there, so I think about so you built on that whole notion of there's a vernacular, there's an experience, there's a whatever. It it feels to me there's a I know there's a tech term, and I can't think what it is. You know, it's like, anyway, whatever it is. It's this sort of, we're talking not to each other. I it just feels like there are these parallel tracks, and people are speaking a language that for the consumer, they like, I don't care, I don't get it, whatever, leave me alone, I'll do what I want because I can now.

PVSB 29:47

They're intransigent. They they don't want to they don't want to. This is the way they've always done it.

SPEAKER_03 29:54

Yeah. Yeah.

PVSB 29:55

They feel they're a le I mean, they're very strong brand advocates, these these consumers for Trader Joe. But I don't understand how you can say you should deny if if my ability to shop with Trader Joe 3 Commerce has absolutely zero impact upon your shopping experience at your store, what the hell should you care about? But I would love it because I would shop at Trader Joe's Joe's more because I like their product.

SPEAKER_02 30:20

Yeah. Well, and I only get to shop with them when I go and get my new blonde hair done because that's the one, it's not close enough for me every day. However, if they were at my fingertips. Anyway, so anyway, three, they're the things that are on my nine, just thinking about people who are talking about consumer-centric. On that subject, the role of the physical store, I noticed there was an article in the New York Times about all the things that Walmart's doing, all the things that Target's doing, including adding new shopping carts, but my god, dollar general upgrading stuff, you know, what of those things? What does that look like for both of you as we move to the next year, two years, three years, three?

SPEAKER_04 30:58

I love that question. You know, if you go back ten years in history when e-commerce first came, people said nobody will shop in store anymore. They're doing it again with AI. No one's gonna stop shop in store anymore. AI will make all your decisions, and they've gone crazy with agentique AI, which really doesn't have much of a role in grocery shopping, other than maybe meal planning, where it's pretty obvious. That said, that said, I do not believe even for a minute the physical store is gonna go away. Let's get that out of the way. Ten years and with good e-commerce agents in the ecosystem, such as Amazon, Walmart being just two of the many that exist in the system, only fifteen percent of grocery has really moved completely online shop about I don't want to mix up online browsing discovery, which is a hundred percent digitally influenced, was the actual shop. So the role of the store is gonna very much be profound in retail and in grocery. Now, will the store look the same? Absolutely not. It shouldn't. You're not serving your consumer if you make the store look the same. Tennis store is not a high high discovery, high discretionary purchase occasion. We fool people into it by putting 30 choices and having end caps and TPRs all the time. That world is gonna change with AI. I see the roles having a bigger footprint, the stores having a bigger footprint for fresh, frozen, refrigerated, deli, meat, cheese, everything you find, bread, everything you find at the perimeter of the store having a larger presence because people still want to touch, feel, produce. Tennis store is gonna move more and more and more online backed by AI. Either thoughts?

PVSB 32:33

Yeah, I agree, Shree. I I think that the products that are are one easily uh easily designed for supply chain delivery, either curbside or home delivery, i.e. center store, are ripe for harvesting and and will become a part of our more digitally focused end of the omnichannel experience. But you know, Maystri, and you're like me. You walk into a grocery store, you want to choose the produce that you're gonna cook for dinner that night. You want to select the cut of cut of meat in my case or the uh the piece of tofu that you might be getting for uh for for yourself. But but I think you're absolutely right that that the expectation that we're gonna go completely digital is completely unrealistic in grocery. And sometimes we go, although we tend to go to grocery for the meal that we have to cook, there is an element of inspiration, maybe not as much as when we walk into to some big box retailers, but it certainly is something that uh that we do. And and grocery is going to do this. For me, uh I I think what we've got to understand is that consumers are, to Shree's earlier point, consuming so much content. Our consumers walk into every physical store carrying this really powerful device with at a touch of the screen more information than probably any of us had growing up being able to shop at a store. I certainly know it was in my case. And they turn to it with regular frequency. I mean, I my daughter is amazing when I watch my how my seven-year-old uses this. It is a core part of her existence. So we have to get better at that. We have to understand where it plays a role in in the customer journey. To Shri's point about 100% of all purchases are effective to one degree or another by digital is so true. It just is. It is, it's part of everything we do. And and we need marketers to understand how digital plays a role in the path to purchase and and how it engages shoppers. You have to one of the things that we saw at Monday night's Amazon upfront at the Beacon Theater was they had someone on stage talking about Twitch. Twitch is their streaming business that originally was focused on esports, gaming, right? But it's so much more than that now. People go there to have live conversations in the live community. It's not just about gaming. All sorts of artists use that. I asked a bunch of marketers the next day, how many of you have a Twitch strategy? Twitch strategy. Nobody with their hand off. Like, did you not see that last night? How many of you were a little nervous after seeing that last night? All the hands went up. I'm like, guess what they're all going to be doing? They're going to be looking at Twitch as a mechanism. So you have to be where your consumers are, or you're missing the boat.

SPEAKER_02 35:16

Yeah. Well, you said, I think, and and as we start to wrap this up, I know we can talk about this forever. You both said two things here that strike me. One is that two things have to happen. One is there has to be a recognition that the way people come to you as a brand or a store has changed dramatically and forever-ish. I say ish because, you know, we all talk about younger shoppers who are wanting to be more analog and using iPods and, you know, whatever, etc. Um, but that that acceptance that that has changed. And if you're as a marketer, a researcher, a retail, anything, if you don't accept that, that to me feels like step one, you know, that first piece of acceptance. And I'll ask you your thoughts on this too. But the other is what you said, Sri, is yes, we all look at the numbers and say, well, you know, digital is really important and e-commerce is X, and you know, we still only do 15% of whatever grocery, whatever online. But your point was, but the store shouldn't look the same as it has for 50 years within that context. And most stores, I always say you could come down from Mars and walk in and or from the bush where I grew up, and you could look at it and you could say, Oh, that's familiar. That looks about the same. Milk is at the back and the pharmacy's at the back, and you know, whatever. So, anyway, so last thoughts on this one.

SPEAKER_04 36:39

You look at a super center. The general merchandise hasn't changed the footprint. Again, you look at a super center, the general merchandise footprint still hasn't changed from twenty years ago. The amount of apparel in store, toys, electronics, electronics, televisions, largely bought online. It still looks the same. Why? I'll leave it at that. Why?

PVSB 37:01

I don't even know. I walked into a club store the other day and I thought to myself, why are they selling all these big TVs? It seems like the younger generation, the screens keep getting smaller. Like their fascination is more with this than it is a giant flat screen TV. Maybe I'm completely missing the boat here, but I think my old days of having a really big flat screen so I could watch a sports game is doesn't seem to be gelling with what the younger generation is. I I have a bunch. I have a bunch. Peter and I at Gen X.

SPEAKER_04 37:29

Those in leadership positions in retail and CPG at Gen X, they're hanging on to the lost thread of the biggest wallet today, which is Gen X. And they're not changing you said it, Wendy, pretty poignantly. If you don't accept it, I think we're at a cusp now where the last 10 years, if you didn't accept it, you could still survive and we got the COVID boom. We've completely reset from the COVID boom, all that is out of the ecosystem, except is the word. That's the magic word. It's one of the 12 steps, I'm pretty sure.

SPEAKER_02 37:58

Well, well, I thank you both. You always bring a logic to this conversation and put it in some order. And next time we'll discuss baseball, as always. Um, and uh I thank you for your insight and thank you for joining me on Future Shop.

SPEAKER_04 38:13

Absolutely. Wendy, thank you for having us. It was a pleasure talking to you as always.