Retail Media’s Untapped Value with Andrew Lipsman, Plus DoorDash Bets on Instacart & Amazon Disap...

Vídeo em Inglês, publicado pelo canal Remarkable Retail Podcast.

About this content: The summary, key points and topics below are generated automatically from the video transcript. They reflect the content, opinions, claims and predictions presented in the video and do not represent a position, validation or fact-check by All The Gate.

Video summary

The podcast discusses retail media networks, Amazon and Starbucks financial results, the proposed merger between Door Dash and Instacart, and the impact of delivery surcharges and AI agents on retail. Guest Andrew Lipman shares insights on retail media monetization, on-site ads, incrementality, and physical store media.

Key points

• Amazon reported overall revenue growth of 12% and strong AWS growth, but retail growth was slower and capital investment in AI negatively impacted cash flow.
• Starbucks reported a US same-store sales increase of 7.7%, driven largely by higher spend per visit and improved profit margins.
• Door Dash announced a tentative plan to acquire Instacart for $17 billion, creating a massive delivery and retail media network combination, though closing is expected around 2027 or 2028.
• Andrew Lipman noted that retail media networks are far from saturated, with physical store media and off-site expansion representing major future opportunities.
• UPS and FedEx raised holiday delivery surcharges significantly, which may pressure retailers to adjust shipping fees, order minimums, or promote buy-online-pickup-in-store options.

Topics

Retail Media NetworksAmazon ResultsStarbucks ResultsDoorDash and Instacart MergerAI AgentsDelivery SurchargesSustainability

Video transcript

Transcript from available captions; it may contain errors.

[music] Welcome to Remarkable Retail Podcast episode 318, Election Day in America episode. I'm Michael Abba >> and I'm Steve Dennis. >> On this episode, our guest is Andrew Lipman, media, ads, and commerce. With a rich career as an analyst uh with organizations including e-arketer, he left it all behind to focus on the emerging idea of retail media networks. not his first time on the show. Uh I was just trying to figure out what this retail media networks was years ago and he was instrumental in helping me get across [laughter] the finish line. Now everybody seems to kind of have a grip on it kind of sort of. Andrew offers a cleareyed take on his own perspectives uh on the opportunities, the misses, the propagandas, the wins, the fails, and ripped from the headlines lenses RMN lens on the big merger between Door Dash and Instacart. something we're going to be getting into uh later as part of the news as well as decryting Amazon and Starbucks latest results. Then of course our popular what's on our radar screen. Steve here from Canada we can only watch in shock and awe at all the shenanigans happening for the midterms. How are you feeling today about the republic the state of the grand experiment that is American democracy? Well, this is awkward timing because of course some number of people will have listened to this episode before the midterm elections here are settled and uh others will have listened to it after we know what's going on but also in between the time >> are listening to it during on the way to the polls or waiting to vote waiting to vote >> perhaps there so many so many possible scenarios things are changing so quickly that who knows what other things will be in in the news related to the elections. For example, some folks may know that President Trump cancelled a bunch of rallies, but then decided he wanted to do these rallies. So, who knows what will transpire between the time we record this and the time it goes live and the time it goes live and people listen to it. So, uh yeah, I think as I said a couple weeks back, I think just general craziness will ensue one way or another. Let's get into the news. For those of you who are uh headed to the polls, standing in the polls, or have listened, uh let's get into the news and let's talk about Amazon's results first. What did you make of them? >> Well, I'll tell you what Wall Street made of them, which was they were quite disappointed uh for a few reasons. Uh actually objectively most people would be quite happy with these results because overall revenue was up 12%. Profitability increased quite a lot. Great margin across the board. Of course a lot of that margin being driven by AWS which had its fastest growth in nearly 5 years up 39%. Ads also continue to rock on though their growth slowed. But the two things that seem to get folks attention, one was that retail growth in particular North American retail grew at only 6% overall and online, so this is the first party uh part of e-commerce for Amazon grew just 2%. Now, the caveat here is that the Prime event moved and they claimed that the move cost them about 4 percentage points. So, I guess we'll see how that all sorts out >> over the longer term. Uh, third, >> quick question about that. Uh, is that cost them 4% in this quarter and they'll make it up in the last quarter or was a net oops, we we moved on? That's the that's what they are suggesting is they will make it up in uh this current quarter but we shall see. Third party was up 9% and at this point third party's about 60% I believe of well we don't know the exact number but about 60% of all of the e-commerce business and Whole Foods Market which uh listeners following this closely will know that Whole Foods Market which had been not exactly on fire started to put up some really pretty good numbers the last several quarters. this quarter uh up only 2% and that includes a few store openings. Now people speculate or just generally believe that Prime Days don't have much to do with Whole Foods market because it's really an Amazon centric event. So a lot of people are a little bit confused by this. Uh they also guided that retail would be a bit slower. Uh but I think the thing really when you step back that was really I don't know headscratcher was how much money they are plowing into support of the AWS business and AI which actually turned their cash flow strongly negative. Uh and by negative to the tune of $42 billion for the last 12 months. So, uh, I was watching CNBC this morning and they had a chart of of Amazon's overall cash flow for I think the last couple of years. So, had like eight quarters on it and it's and cash flow's bounced around a bit, but it's been positive for a while and then all of a sudden you just have this huge drop. So I think uh as much as the as I said AWS is growing at a really extraordinary rate and obviously AI is very important to just about any company this the size of of that investment uh was really uh a cause for concern and that also comes not to get too in the weeds on this but also came against a backdrop of we had a quite a few uh tech earnings last week like Meta and Alphabet and they too were uh putting up some >> Microsoft tech right >> yeah and some really big uh capital numbers. So I think some people are like you know how is this like not everybody can end up getting a great ROI with this with this level of spending. So yeah the the buildout of AI is costing them a lot. Just one other little tidbit that they mentioned or two I guess two others is uh as we keep coming back to their grocery and everyday essentials business is still doing quite well. They said that and always a little bit of a classification question here as exactly what include what counts as grocery and everyday essentials, but they said that it is now um about half of all the units they sell and is growing at three times the rate of the other half. Again, they don't quite give us enough numbers to exactly calculate this. Uh and also as we've talked about the uh so-called Amazon now I shouldn't say so-called it is called Amazon now which is their ultra fast delivery uh grew 10x still a relatively small base but um you know a lot of good a lot of good metrics there >> you know I' I've been uh flumxed or shocked or whatever about all the billions billions billions going into AI I'm like where is that all going and I had a uh I've done some work for uh in the distribution channel, tech distribution channel with some clients and keynotes and uh some friends of mine, great friends of mine at a company called Blueestar uh which based in North Carolina got purchased by a company called TD Synex and I never heard of TD Synex. I'd kind of not so I did my research on them. I'm just kind of curious. Uh they're about $110 billion dollar distribution and I went into their numbers and the growth is in two huge like they do things like to to retail small mid-size retail a lot but two huge growth areas. No surprise their biggest growth area is putting all the racks and all the hardware and all the fans >> into these data centers and the numbers are just mindboggling. And you know what their other big growth area is? >> And and this space, they have a whole space division, >> final frontier, >> like the outer space. Yeah. Shout out to Walter. Shout out to uh to Czechov and to Captain Picard who left us last week. Uh but uh man, like the numbers just are I had to figure out it's going somewhere, but I couldn't find it. Now I kind of I just found it, right? It's crazy. Well, there was also um some revised GDP numbers last week and uh again it's this this idea that so much of the US economy is a bet on AI because a lot of the the growth in GDP I think something like 50% of the growth in GDP could somehow other be tied back to AI investments. So fortunately, I guess in one way of looking at it, that's really keeping the economy humming. If we didn't have >> quite uh the size of this, the magnitude of this uh you know, we might be talking more about recession, but if if this keeps up, >> I want to get your thoughts on and we're not going to talk about in any detail. Microsoft put out an announcement connected to results and and about their offering, what is it like 50% of their employees a buyout because they think their job >> 60,000 employees. Yeah. >> Wow. Yeah, AI, right? Are we starting to see this idea that AI will absolutely impact uh labor even in in companies like Microsoft? I don't think everybody's going to take it. It's a volunteer. It's not like laying off 60,000 people, >> but it's super interesting. I don't know where those people would think they would go. Maybe they're going to go frame houses or something. I'm not sure they could go do what they were doing before. Let's talk about Starbucks. But before we talk about Starbucks, I have some stats for you and the people. Uh, so I happen to be with one of my other podcasts an official media sponsor of a coffee Canadian coffee association. So I know a little bit about coffee. Here's some stats for you. Just to lay some context down for the uh what we're going to talk about Starbucks. Past day consumption by Americans. How many what percent do you think of Americans have had a coffee yesterday? 66% daily consumption is at a 20-year high. So let's keep that in context. It's flat, but consumption is at a 20-year high. That means about 195 million Americans drink coffee each week. Cold coffee was 21% of coffee drunk uh in the summer, 71% for hot. And whenever you talk about coffee, and this applies to Starbucks as well, cuz you got to dig through it, there's inhome consumption and out of home consumption. So, you really got to understand them both. What percent do you think drink coffee in home on a on a regular basis? What percent of Americans? >> Uh, well, I was I was going to guess like 75%. >> Close. 83% out at home. Uh, has reached a record 38%, the highest since 2020. Uh, and by the way, coffee prices are up dramatically early in the year. They were up at 20% at the beginning of the year. Now, [clears throat] that's calmed down and it looks like they'll be up like 8 to 10% year-over-year. By the way, 71% of Canadians were more caffein caffeinated here uh drink and uh 45% of traditional coffees, 29% had espresso based drinks. Again, for context for Starbucks. So, what did Starbucks have to say about their results? And do we still call it a turnaround or is it just operating now as a business? What how do you think of that? >> Well, I think the turnaround is still kind of mid-flight, but uh perhaps showing some traction. Uh, one thing just to before I get to some of the numbers, they're comparing against a very weak quarter last year. So, that's something to keep in mind, but their same store sales in the US anyway were up 7.7% and that was driven mostly by spend per visit. Now, to your point, how much of that is just pure inflation in the items uh or people trading up or buying more items when they're there? But, uh, but visits were up 2.4% 4% which is for a sizable company a pretty good number. Uh profitability improved a lot. Uh their margin is now up to over 12%. So that's very healthy margin. Um international continues to be weak flatish essentially and visits were down. But they've also been closing stores and so there's some transfer between those local like for example here in Dallas they closed two stores on kind of either side of one of their stores. So I imagine some of that traffic uh uh was transferred so that would drive the comps up a little bit. But in any event um you know it's certainly moving in the right direction. I think it is a little bit hard to really do an apples to apples comparison because of the easy comp and because of all the store closings. But um they're also suggesting that things are going to slow down for them. And I don't know how much of these uh these warnings or suggestions are slow down as kind of sandbagging >> the numbers or whether it really just speaks to a pretty uncertain >> um economy going forward. I mean, if you and I were having this discussion when we first launched the podcast, we'd be talking about some pretty great optimism about their international growth, particularly in China. >> Uh that the bloom is off that rose, right? Luck has taken all that growth away, and it's hard to see them grow in that in that uh in that country at all. Now, I mean, maybe they turn their minds to some other place international, but I'm not surprised to hear those international numbers. Let's talk about the big deal of the week. It was rumored for a while Instacart and Door Dash. Door Dash buying Instacart for 17 billion dollars with a B. So what there's a bunch of different dimensions to this because uh you know as we get into with Andrew there's much a med retail media network as they are a delivery service. But >> what say you? What do you think of this? Well, one thing to keep in mind, which I did not focus on uh when I first was reading this and and um when we were talking to Andrew, was this deal is not expected to close until late 2027 or even early 2028. And I'm not really sure why that would be. I mean, it's not uncommon for deals to take four, five, 6 months, but that is quite a long time. Now, I do think some of it must be the regulatory review. um New York City in particular has already said they want to review it. So maybe that's the reason. So I need to dig into that a little bit more. But here we are. We've got um Door Dash, which is, you know, primarily in the uh restaurant delivery business, Instacart, which is more retail, supermarket delivery. So, putting these two together does create a behemoth of home delivery and perhaps a bit of an antidote to uh Amazon and Walmart. As we've talked about a bunch of times, these delivery wars, the race to the doorstep is very difficult for folks that aren't Walmart and Amazon with their logistics capability to be able to do rapid delivery. uh I still keep coming back to this is a an expensive way to do it or it makes it difficult to do it at a a large scale because it's very dependent upon gig workers you know running into a store and grabbing stuff which uh is is tough business to scale but it'll provide more of a powerful alternative to to Amazon and Walmart and a few others that are doing their own deliveries. Door Dash did say that they intend to keep the Instacart brand and its app and all technology distinct, but it does bring 50,000 more stores into the mix. Door Dash has got about 100,000. One of the things to watch, getting back to my point about the the scale of this and perhaps wanting to control your destiny, is which large retailers will still want to do their own delivery and make this more supplemental uh or maybe stand up something different. So, I think that's mostly a story for the large grocerers, the Kroger's, the Albertsons. um Target's a little bit different animal because they have shipped um >> and do some of their own delivery as well. So it's it's a it's a big deal and as you say there is the customer delivery part of this and then there is the advertising part of this as well. Though it's it's worth mentioning as as much as advertising is an important part of the model here when we talk about retail media networks as we'll get to with Andrew in just a few minutes uh Amazon and Walmart are way way way bigger even than the combined entities. how this is not going to completely shake the world of of retail media. >> Anyway, let's talk about someone who has a fundamental understanding of retail media networks. Andrew Lipman joins us now. And as we said, the the deal was announced literally while we were recording the interview. So, we got some of his early thoughts on it. Let's get to that right now. >> Andrew, welcome back to the Remarkable Retail podcast. How are you? >> I'm doing great. Good to be back. >> Well, it's great to have you. We couldn't have thought about Steve and I were just talking off mic. Couldn't have thought about a better guest for a better time. Sometimes you get lucky in these things. We got lots to talk about. Uh notwithstanding just simply trying to get our arms around this whole retail media thing that you've made your your life's work. Where are we finding you today? >> I am at home just outside of Chicago. Oak Park, Illinois. >> Very good. Steve was just in Chicago and and uh so >> my one of my kids lives in Oak Park. >> Come on. >> Oh yeah. That's right. >> Yeah. And she knows nothing about retail. So, you know, one of her best qualities perhaps. But anyway, I digress. >> Uh, beautiful part of the world. Uh, let's talk about you. We know you. We've known you for a bunch of years, but perhaps not every single person knows uh who you are that's listening. So, who are you and what do you do for a living? I am an independent analyst and consultant um focusing primarily on retail media but um my my company is called media ads and commerce because I I veer in all three of those directions. Um I was previously a principal analyst at e-arketer. Um I was covering retail and e-commerce but because I had a digital media and advertising background as Amazon started to build this mega ad business that almost nobody was aware of. Um I kind of connected the dots and realized that this is going to be a big thing not just for Amazon but for other retailers as well. Um this was back circa 2018 2019. So that's when I started covering the space. Um and it just became bigger and bigger every year that I was at e-arketer. Um and by the end of 2023 um I decided to go independent. Well, you made a you made a great bet right for the time and and uh you know, I remember the early days I was just trying to get my head around what we were all talking about. How is this not like shopper marketing or how is this not co-op spending? And and we've come so far pretty fast. Now, let's dive right in. You know, when I think about uh retail media networks, uh top of mind for me is, you know, the kind of Amazon and Walmart. But as I think about it in my simplistic way, you know, I feel like Amazon would make more of its money from charging vendors or third party players to get their listings promoted and, you know, be a player, whereas Walmart is more about working like an agency to get relevance and branding with the big brands and the CPG. Have I have I got that directionally correct? Or or tell us about the nuance or maybe not so nuance about how you think about those two things. if if you're comparing them uh to each other, I'd say that's their relative strengths. >> Um but actually, you know, Walmart has emulated Amazon's model um which, you know, it starts by building the retail media business from the e-commerce side out. >> Um Walmart isn't even isn't even into instore media yet. Um and that's going to be a huge market for them eventually. Um and they are technically, but but in a very limited way. Um [snorts] but but really what's been driving Walmart's incredible growth. You know, they're over $6 billion now in this business. Um has been the expansion of their marketplace. So Amazon has this huge marketplace, but Walmart, last I checked it was over 300,000. It's probably more than that now. Um so they have a big vibrant marketplace and what you end up getting is a lot of new sellers, new brands. Um all of them want, you know, hope that they sell well enough that they might get on Walmart shelves one day. So there's there's certainly a carrot. Um but it also drives that uh auction density and competition for ad slots and um you know that really becomes a monetization driver and then all of this really just fuels um the flywheel for for the whole business. So I think Walmart kind of smartly saw what Amazon built. They built their own version of it but followed a lot of the things that Amazon did well. Um and it's working and they're growing on a pretty big number now. you know, consistently 30% or more year-over-year. So, it's humming and they got a lot of opportunity in front of them, especially as they get into TV. Um, and and then as I said, eventually instore media. >> Yeah, we're going to we want to delve into that a bit later. So, you see I love that term auction density. That's a real uh real industry term. Now, as as the numbers that you yourself kind of predict, uh you do see Amazon's relative share of this stuff dropping. What is it from 79% to 61% by 2035? Is this just again it's all going to go to Walmart or there, you know, we've we've had on the mic folks from Home Depot for example, lots of people uh that, you know, the grocerers, the big grocerers, Kroger, blah blah here in Canada. They're they're getting share and they're in the game as well. Is this a a lot of people going to take bites of that apple, so to speak, or is it is it really a fight between these two behemoths? >> Uh, short answer is yes. There there are a lot of bites to be taken. Um, it's it's, you know, a common refrain that Amazon and Walmart together are about 85% of the market. And the implication that everyone says is everyone else is just fighting over scraps. Well, that 15% of scraps is already $10 billion. Um, and this is a market that's going to, you know, according to forecast is going to double uh by 2030. So, there's a lot of opportunity out there. Um, Amazon, even as it loses share, according to my projections, right? It's still going to keep growing at a at a pretty strong rate. It's just that I think that the other players are going to start to get the the win beneath them and start to grow. And Walmart's really the first one that's built it in that really significant way. But let's not underestimate the fact that there are already several billion-dollar ad businesses out there. Instacart, Door Dash, Uber, [clears throat] uh Best Buy right there, a couple others we we don't know. Um but you know, are probably within sniffing distance. Um you know, the other big retailers, Kroger, uh Target, etc. So, this is already a vibrant ecosystem. it's already making a difference in a lot of these retailers bottom lines and there's a lot more that are going to continue to figure it out. Um, one stat that I like to use is uh did a an analysis um with a company out of Australia that does uh media valuation and basically looks at all the owned media that you have as a company um to show like what the potential is for monetization. And right now, collectively, retail media is only has only monetized about 38% of the total opportunity. So, it's funny we talk so much about saturation of the opportunity. Um, and I think that comes from the fact that Amazon and Walmart are carrying a lot of ads on their site. We're not even close. We are not even close to to saturation. Um, so there's a ton of opportunity for everyone else. And I would say, you know, a lot of them aren't really um aren't humming yet. They're not doing even close to what they could be doing. They're not even taking the easy money that's still out there. We'll be back with Andrew Lipman from Media, Ads, and Commerce right after this message. If the world has changed so very, very much, why have so many organizations changed so little? As the pace of disruption accelerates, leaders need the courage and the insight to aim higher in the value they deliver, move faster than they ever have before, and take the bold action to leap ahead of the competition. With Leaders Leap, Transforming Your Company at the speed of disruption, [music] Steve's latest breakthrough bestseller, you'll discover why so many companies fall into the trap of the timid transformation. More than anything, you'll learn about the essential mind leaps leaders need to make to win the future. Leaders Leap is available just about everywhere books are sold, [music] as well as on Audible and as an ebook on Kindle for just $9.99. you know, I've been following your work for a while and uh gotten to see you present a couple of times on retail media and of course one of the big conversations around what is really incremental and where should the money come from or how should retailers be thinking differently about their marketing spending and uh I know I've seen some statistics that perhaps uh some folks aren't super confident that their spending is incremental. give us the I know that's a a big open question, but what what's sort of your your story around how to think about incre incrementality and how to fund these efforts? >> So, so first off, there's a big disconnect that comes up that misses a huge part of where the money does come from. And it comes from the fact that brands will say, "I'm tapped out. I don't have any more money to spend." Um, it, you know, you're you're now you're asking for my brand marketing dollars. Um, I've already tapped out what I've I've pulled from Shopper and Trade. Um, and what I say to the brands is it's not all about you. You're competing with a lot of thirdparty sellers and uh disruptor brands. And so that's actually what's fueling big growth in the market. Amazon and Walmart, those are built on thirdparty marketplaces. And it's not the biggest brands who are driving most of that revenue. So when I look at where the growth comes from, the biggest chunk of it is incremental revenue from these miden and longtail sellers. Um, you know, going from being an advertiser to an advertiser. Now within the existing brands um one they do get incremental dollars. The early money you know was was that kind of flood of e-commerce dollars that did come out of cho shopper and trade during the pandemic. As that has kind of dried up now they have to figure out where do those next tranches of dollars come from. As retail media moves up the funnel into off-site programmatic uh social um and streaming TV, increasingly those are coming out of brand marketing budgets, but you know, it's a TV ad is a TV ad, right? The retail media version is underpinned with different data and closed loop attribution, but it's still a TV ad. So, it makes sense that brand marketing dollars would shift from one to the other. Um, I think that, you know, nobody really talks about where where it should come from and their biggest budgets in many cases are meta, Google, and off-site programmatic. And those are three massive pools of spending that have incredible amounts of waste, misallocated, overinvestment. So, I'd say start looking there. You could start splintering off some of that spend. You know, I'd start with programmatic because frankly, so much of that is fraudulent inventory at this point. I don't think I mean, they're really flushing dollars down the toilet, but Meta and Google are heavily overinvested and they need to get smarter about how they're they're using those those dollars. >> No, I mean, there's there's a lot there. I was just in a conversation actually uh with a retailer who who did exactly what not because they were necessarily going uh into retail media but just looking at some of their programmatic spending and and they did an analysis of it and they realized there was quite a lot that was basically lighting a bunch of cash on fire and uh but anyway um but but let's also talk about the the margin side. One of my favorite things uh because I go out to Amazon every once in a while and um I'm always a little bit cheeky asking them questions about, you know, why do they have so much uh sponsored advertising and how do they think about the customer experience and the trade-offs between merchandise margin versus retail margin. But anyway, sort of famously retail media can be very very profitable for the retailers um if they really go after it. But where where are you currently uh on on thinking about getting the balance between the customer experience balanced with I don't well this is a loaded question I sort of junking up the page potentially with with too much sponsored advertising. >> Absolutely. Um I I think CX is paramount for anything in retail media. Um and but there there is an assumption that that ads and CX have to be in tension with one another. Um they don't. Now we in the broader digital advertising industry are quite good at mucking up uh a lot of spaces with terrible ads. So right so like I I say this knowing full well that that in shitification is a is a very real threat. Um, and you heard me talk about the importance of CX in the physical store as we start to introduce ad experiences. One of the things I've said is don't be shouting promotions at people all the time. Um, you know, do good quality brand advertising that digital ads actually elevate the experience. So, they can and they should. I just uh came across some research or did some research on on thirdparty data that showed brand advertising stuff without price and promo information actually drives sales better for both the product skew and the brand. Like that's amazing to me that right when you actually give the better quality experience it ends up moving the needle on sales too. Not to mention that it's building that brand equity. So on-site >> um there's there's always concerns about how many slots are going to advertising and for me the key is search ad relevance. If you have really high search ad relevance then the customer doesn't really even see or notice a difference between a paid result and an organic result. It feels it feels organic. And so that's actually why Amazon has I'll say gotten away with with such a high ad load. Um, and now Walmart's right up there, too. It's because they have excellent search ad relevance. I'm in about to release some research with a partner in the next couple of weeks that looks into on-site CX. And I'll just without getting giving too much detail away, I'll allude to the fact that consumers don't really see a problem with the with the ad experiences on these sites. >> Um, so so we tend to >> I must be the only one. >> Well, [laughter] listen, there there are people in this industry who are very attuned to it. And you do listen, I run into instances where I will get a bad search result, but you know, those are those are edge cases for the most part. And so it's just not really getting in the way of of most people's experience. Um, now other retailers still don't have great search ad relevance. So if they want to increase their ad load um, and they should be aspiring to do that, they need to start with making sure that the on-site CX is great with great ad relevance. >> Sure. Well, let's uh, you know, you allude to this a little bit, but where are we with physical stores as kind of the next frontier? Uh, you know, of course, a lot of people have been thinking about physical stores as as just media anyway, right? Cuz they're part of the marketing for the brand and obviously there's been, you know, Supermarkets and whatever the end cap advert, you know, there's lots of stuff that has gone on, Super Bowl promotions, whatever it might be. So, it's not like there hasn't been advertising in stores, but but where where does this stand? What do you think's working? uh or where are there opportunities that maybe some of the retailers listening might might benefit from thinking about it or experimenting with them? >> Yeah. Well, so there's the same fundamental tension that exists in these organizations um between ads and CX, right? So on the digital side, it it's ads versus, you know, they're going to battle with the ecom teams who they want to drive sales. In the store, it's the merchants and we know that merchants rule the roost. um and they don't want anything that's going to get in the way of driving sales in store. Um now the the ads team and the merchants have the same goal at the end of the day. It's to increase receipts. Um that's how you get more investment. So what we're seeing there was a lot of hesitancy um in in the US and it took a while to kind of get out of the gates. We finally seen that happen and materialize in a in a significant way. Um but it's still pretty early in in the rollouts. I say in a significant way because we do have national retailers who are um going full throttle on this and they're moving forward pretty quickly now. Uh CVS, Kroger, Albertson's um kind of leading the pack and everybody else is starting to dip their toe into the pool a bit more. Um the experiences that I'm seeing in store are pretty good. Um and I'd say at worst there's something that you can ignore. Uh but nothing that I would say is detracting from the experience whatsoever. Um, [clears throat] now I did some research um with Grocery TV not too long ago about instore CX and how consumers are responding from the potential transit transition from a static display to a digital display. And they got to do sideby-side views of images of both. Um, and what was interesting is there were a lot of um they were asked like does this hurt CX? Are you neutral to it or does it improve uh the CX? And you know, it's overwhelmingly positive now across almost every display. It's improved. We did the same study three years ago and it's improved by about 10 percentage points for the the the displays that we researched um both rounds. >> And um there's a lot of displays that I call no-brainers at this point. And it's the places where you have high dwell time. So that is checkout, >> uh the deli counter and pharmacy. um any sort of mobile advertising um people are fine with. And then front of store, whether that's store exterior or at the store entrance. And again, what do these all have in common? You're not really interfering with the merchandising um or consumers really want that content or entertainment. Where it starts to get a little bit uh I don't want to say diceier, but you know, there's more to navigate is when you start to go into some of the power positions in the store like the end cap. I think it's super high value. uh credit to CVS who who is doing that. We've seen Tesco and and others in the UK prove that it's it's it works and it doesn't have to be problematic at all. But I understand that it's going to be a much more political battle to to do the the end cap. So that's something I would say, you know, sequence your how you move into the store. You'll get there eventually. Right now, go with the no-brainers. >> Yeah, it's it's it's great advice. Now we're almost what 15 20 minutes in and AI agentic AI has entered the chat. Let's talk about I loved your your your search ad relevance content. Now if uh you know we have this um these these ad agents or these uh agentic agents going in and doing shopping for people. Does that start to impact this whole idea of uh of this ad relevance and this uh this revenue where agents are just coming in. They don't see any of this stuff. They're just doing the the shopping on behalf of people. We know Walmart just opened up their store to that. Is that is that net decretive? Is that a word? Decreative but >> decret. Does it take away from >> Yeah, I think I'm English. I'm making up words here. >> Well, English being a living language and I know Andrew, you're you're great at text. But anyway, at the end of the day, what's your perspective around uh Agentic AI and and how it impacts on retail media, these things? >> I um it's not a threat uh at all. If anything, it's going to be incremental and and benefit overall e-commerce shopping. >> Um, the agentic commerce, like the actual transacting where you, you know, let your agent go through the whole shopping and buying process for you, it's never going to be anything but the most marginal behavior. Um, we we just we we don't understand how consumers behave and why they behave the way they do. And so we just let the tech the fact that technology exists to do something. >> We assume that that's enough to you know compel everybody to move in this direction. It just doesn't happen that way. I've seen too many of these technology trends come and go where we assume it's the future and then you know where the rubber hits the road is what matters. Um so for me show me some data of people transacting in a significant way. >> Show it to me. what all you hear are these these brag numbers that you know are designed to to feed the hype. Um and you know it's like don't say a big percentage. I know it's going to be a big percentage because you know anything off of a infantestimally small base >> is going to be a big percentage. >> Yeah. >> Like why don't you show me what the number is based off of? You won't see that. You're not going to see it because it's not going to happen. Um, so but the the whole idea of of like traffic like I'm going to have an agent shopping for me and that this is going to become the future of web traffic. We have search today. Tell me how this is functionally similar or different than search like well you need to say oh these crawlers that are happening I mean you you have to filter that out right now if Google is crawling your site. So yes you need to be able to identify what is essentially a crawling experience. Um, but it just doesn't change the fundamentals. And all this talk that you're going to have to start figuring out how you [clears throat] market to bots is it's just to me completely insane. [laughter] >> What do you really think, Andrew, though? Don't be shy. You can >> Let's You know, I uh let's let's um let's change the lens and go in a different direction. Let's talk about loyalty. I I I we're preparing the notes for our conversation and what winds up in my mailbox. But the Costco membership catalog, OG, if we can call that retail media. Now, if we think about Costco membership as loyalty, you know, Amazon, Walmart, they have tremendous modes in general around loyalty. Does that create that ultimate mode around their retail media as well? And and is that the real moat for uh your line of work? Um, it's I'm not sure I'd call it well, maybe it is a mode. I've always thought of it as the foundation. Now, I I I say that the best retail media networks built a flywheel based on the interplay of media experiences, advertising, and commerce. And the fulcrum on which that flywheel spins is your loyalty program, right? Prime membership was the fulcrum for that. It's the the source of your first party data. It's what enables close loop targeting and attribution. Um it's really the source of power um for for your flywheel. And so it's essential it and so yes it it anybody who does not have a strong loyalty program um is is definitely competing uh at a disadvantage but the strongest ones and really I mean think about Walmart. Um Walmart Plus was launched I think in 2020. Um that became really foundational to everything that they've built. Had they not built that, >> right, I don't think their ad business would have grown the way that it has. >> Yeah. That that the whole idea of loyalty was an anthemma to the an earlier generation of Walmart. They just saw it as an added cost to the to them and the consumer, right? But I I think we're in a very very very different era. >> Yeah. And for them, I mean, there was a point where they had what, like half of their transactions were uh untraceable tender, so they were missing all that data. um you know I I think they still have a decent chunk of it but I I've heard that the numbers maybe you know they're now seeing something like 70 or 80% of transactions. So you know that's a big difference than 50%. As we think about other retailers, you know, if you're a say more small mediumsiz retailer, what's the case or what what situation do you have to have to really think that retail media, whether it's the online piece or the instore piece or both really makes sense for you? Like what what would you say? I mean, is having enough data, for example, if you're a a type of retailer that does not have a high percentage of traceable transactions or household data, uh, can it be something for them? >> I think the further you get down the list, actually, the less valuable data is because the data fuels a lot of the off-site targeting business and and honestly, the the mid and long tail aren't going to be big players in that in most cases. So once you get out of let's say the top 20 or so retailers um those opportunities are a lot more limited. The first thing is do you have traffic on your site? That's the the easiest to monetize. If you have a significant amount of traffic, that's a few hundred million dollar business um for for a lot of uh retailers right there. Um certainly if they're monetizing to the extent that they can. Um once you start to talk about let's say regional grocerers um or you know players like that or maybe regional retailers the opportunity really I think comes from uh being aggregated into a much larger network. Um now let me say there's a been this this um thought that anyone who's in retail media is like oh we're launching another world garden. We need to get that out of our mind. Not everyone has to be a walled garden. Think of most of them as the rise of digital publishers. And you could be a digital publisher, you know, back in the day with five or 10 million people visiting your site every month. Um, you're not a mega business, but you're also not nothing. It's it's a viable business. But how did those ads ultimately get delivered programmatically? Um, it was through aggregation of of ad networks. And so when I think about the >> um right now, if every regional ger is fighting for those retail media dollars, those are hard dollars to win. and and they're competing with the with the big boys, right? And it's much easier for a brand to just invest with the top five, seven, eight uh CPG retailers than than going to all the regionals if you aggregate all the regionals >> right now. That's easy to invest in if I'm a brand. There's incredible scale. So, that's actually a grow the market opportunity. >> So, you should be trying to grow the market if you're those players and aggregation is the path to doing that. and then your slice of it, even if it's a modest slice um of a pretty big pie, that becomes pretty meaningful to your business. And you know, for a lot of those, if they build a $30 million business of incremental revenue that comes at a much higher margin, that can be really meaningful. >> Yeah. Yeah. No, it makes sense. I actually meant to ask you earlier uh cuz I when we were uh presenting at the same conference, I remember one of the things you talked about was just kind of the state of measurement and why I think you were dunking on rorowaz pretty hard. But I I'm just curious, not necessarily specific to retail media, but just as marketers think about uh the degree of sophistication or better clarity around their measurements, have we made any real progress on on that? Uh is there anything new emerging in terms of the way marketers should be thinking about their performance? >> There is progress. We're seeing some better forms of incrementality measurement emerge and the smart money is starting to gravitate in those directions. So I would say there's um a future that smart brands can buy into. Um it's not happening nearly enough and and really the whole industry is just chasing rorowaz. Um and and for a lot of reasons I could do a whole other episode on that. It it really leads a lot of brands in the wrong direction. When I say Meta and Google are overinvested, it's because of RO. People are chasing rorowaz there and they're rorowaz machines. They're designed to be able to put ads in front of you so that you can so they can take credit for it. And the rorowaz numbers look great. It's it's not incremental sales a lot of the time. So, um, stop chasing rorowaz. There there is opportunity there. Um, RMN's can get a lot better, especially as they try to get those brand dollars by speaking a different measurement language. they're they're forcing everything into performance marketing and everything gets measured in terms of rorowaz. That's a 28 day attribution window. Um it's it's not good for a lot of different reasons, but it's actually ignoring the way that brand advertising has traditionally been understood, which is that you just have to get reach. You have to be in front of people frequently, right? It's it's a scale thing. You've got to reach the right audiences. And then there's brand equity that's built over time and it manifests as sales over time that doesn't get accounted for in a 28-day attribution window. So, um I was I was at a conference and a lot of RMs were complaining about why why can't we get brand in store media? And I [clears throat] go, what what data are you putting in front of them? And they were all sales and performance metrics. And I go, I get that that's the game that you're expected to play and it's derived from shopper trade world where where that's the currency, but if you want those brand marketing dollars to enter the store, you need to give them the data and they are used to buying, you know, large media buys with with audience data and they need to understand reach and frequency. So if you don't put that in front of them, don't expect them to invest like that. >> Yeah. who used to uh Mary Mer I think used to is that right used to put that uh where the eyeballs are versus where the marketing dollars are and show that show that lag anyway for all the old school people that remember remember that >> well the disparity right showing that mobile right mobile had a huge percentage of time spent and and the ads hadn't caught up yet now mobile's the most overinvested because of Google and Meta um but I I did that exercise for in store I said what if you treat shopping, physical shopping as a media channel, it would it would equate to about 5% of media time spent. But in terms of advertising dollars, I'm not talking about shopper and trade spend advertising dollars. So it's a digital >> ads um.1%. >> That's quite a gap. >> Little bit of a gap. All right, lightning round. As we're coming up on our time, um, if you if you had to say to people, uh, thinking across say the next 12 to 24 months, where should their attention perhaps be dialed up and where might there be enough hype where you're just like, you know, just stop paying attention to that or or put that on the back burner in terms of their thinking and focus? >> Yeah, easiest question. Um I mean too much time, attention, worry, concern has been uh given to Agentic Commerce. It's not a threat. Um yeah, pay attention and be informed and watch the consumer behavior. Everybody is freaking out about what could possibly happen rather than watching the consumer. When the consumer starts to show you that they're um meaningfully changing their behavior, then adapt to that. In the meantime, they're not doing the basics in building their retail media networks. Um, the biggest opportunity is far and away on-site media. It's heavily undermonetized for almost everybody that's not Amazon and Walmart. Um, and you can do it with with a strong CX um, as part of that. I don't know why there's so much easy money for the taking. I don't know why they're, you know, running around with their hair on fire about these things that probably aren't ever going to materialize. And in the meantime, like there's gold in their own backyard. Get your pickaxe and shovel and go get it. [laughter] >> And call Andrew. >> And call Andrew. And Andrew, I got I got one for you. Ripped from the headlines last week. A mega deal, $17 billion. Door Dash buys Instacart. I can't imagine these two organizations wildly economically viable without retail media. I mean, they're just retail media powerhouses. Do you agree? And and what's your early assessment of this deal? Does it create a big new player? What what what do you think? >> Yeah. Well, they're I mean, listen, they're two of the few billion dollar uh retail media businesses today. Um 30% of the revenue for for Instacart comes from ads. They've always been their valuation is tied to advertising more than anything else. Um, so you know I I did an assessment of I called it a R RMN scalability analysis to see what the potential is because everyone was saying so many RMN have potential to scale into a meaningful business. I didn't have a trouble finding at least 30 US RMNs that could scale to 500 million in revenue or more. But in those rankings um numbers four and five were Door Dash and Instacart. Mhm. >> So, put those two together and you have a potential for a real juggernaut. Um, now this comes with all the qualifications that when you have mergers of major uh existing companies and there's always this desire to create efficiencies, >> integrations can always be a little bit messy. Um, and and you hope it doesn't set the businesses back. I hope that they basically keep running the businesses, you know, in parallel and kind of do the right integrations over time. Um, Instacart's a great brand. I hope that brand isn't lost and it's very very um tied to to grocery in the mind of the consumer. >> RIP to the uh to the shopping cart by the way. Instacart bails on that before the merger. >> Yeah. Well, listen, it was capital intensive and it was it was it was hard for consumers to adjust. I always thought that was a great long-term play, like a 10-year play. >> I'd want an ad on I'd want an ad on my shopping cart. I if I was a brand, that's where I'd want my ad to show up. >> It's also, you know, owned and operated. uh or maybe not entirely, but it like the platform is owned by by Instacart in that sense. Um whereas maybe it's not the same for intore that that said, I think the I'd like to see the instore the easy the the no-brainer instore ad solutions. I'd like to see those progress a lot faster and that's something that Door Dash can be a player in too because you know they've got a lot of merchants um you know across their ecosystem as well. So you could have a major major scale network. >> Yeah. Well, definitely be something to watch. Hopefully, the deal closes or well, for them, I guess they hope it hope it closes and uh as you say, it may take a little while for the the so-called synergies to actually be seen in the marketplace, but uh lots going on. Well, thank you, Andrew, for uh bringing the wisdom. If people want to learn more about your work, I know you're on LinkedIn obviously, but where's the best way to learn more about your thoughts and and what you do? >> Yeah. Uh yeah, follow me on LinkedIn. Um, and then I I publish pretty in-depth analysis um at my Substack, media adsandcommerce.substack.com. >> All right. Well, I will I definitely recommend it. I love following your work. I always feel either well a mix of smarter and sometimes a little bit confused because uh [laughter] definitely not an expert, but it's why we have experts on the Remarkable Retail podcast. But uh thanks thanks for joining us, Andrew. look forward to seeing you out in the wild sometime soon. >> Yes. Uh who knows what what part of the world we will find each other again. Um thanks as always for having me. >> All right, we're back with a little more news. Uh and let's talk about uh well, we've talked about it in different contexts over the past I don't know how many episodes, but let's talk about delivery prices uh as we head into the holiday. >> Yeah, this is certainly timely as uh we get to the heart of holiday shopping. Uh the particular news story is that both UPS and FedEx raised their holiday search charges for regular home deliveries by uh between 22 and 25%. So that's a pretty big increase. Of course, presumably this all goes back to the fuel costs. Um so it's pretty typical for there to be a holiday search charge. It's just that these are up quite a lot compared to last year. We did have um and I think we talked about it on the podcast that earlier in the year uh there were search charges that had already been added to deal with the increased fuel cost. So um so we've seen a pretty steady increase in the third party delivery charges. Uh you some of it going back to tariff time, some of it just going back to when the war started and the fuel cost started to spike. So, you know, when you think about this on a per uh box per delivery basis, you know, this can be pretty significant to the overall profit, particularly on items that are very expensive to ship in the first place like furniture and and fitness and other things that are just big and bulky. Uh or even on small items when you may have a very small order value because, you know, for the most part, you're getting charged per box or based on weight, not necessarily the dog. Well, not not at all on the dollar value of it. So, you know, it's easy to absorb if you're shipping uh diamonds and $2,000 handbags, but not so easy if you're uh sending a $20 sweater or something. One of the things that a lot of people are speculating, though I haven't necessarily seen anybody comb the data here, so maybe this is not happened yet, is that in order to cope with this, retailers will be maybe dialing back some of their free delivery offers, uh, encouraging buy online pickup in store, so have the customer do the work as opposed to a FedEx or UPS delivery driver. maybe higher average uh order values to qualify for free shipping and I think also to avoid the kind of rush delivery charges maybe um earlier cut offs for when you can be guaranteed to get your your Christmas Hanukkah or whatever package. But you know as more stuff moves online if uh people are thinking well gas prices are high maybe I want more stuff delivered rather than me having to drive around to get get stuff. I mean, this will be just an interesting kind of counterbalance. >> You know, it's interesting you mentioned about what incentives create customers going to the store to do a pick up in store because if you look conventionally, many retailers I know give you bonus points or give you free shipping if you're a loyalty member. We talk about loyalty a lot, but I [clears throat] could see a day where uh and that day coming real soon where you could get bonus points for picking it up in store, like incenting the the right kind of behavior from that perspective. So, I think there's a lot of levers to be pulled and I don't think consumers are totally resistant to it. Some are, you know, for different things, but I think I think there's a I think we're going to see a lot of creativity coming up over the next 6 months >> uh to a year. >> Well, let's uh let's wrap the news with some uh some focus on agents and the big news coming out of Walmart and it's a lot of talk. I was at a conference this week and lots of folks were talking about not just this decision but their own decision on whether to allow these AI agents in to your backyard into your store. Walmart Amazon has said no way. Uh for example, whereas Walmart said, you know, open door, come on in, look around. We're so conf I my my interpretation of that is we're so confident we're going to have the best price and you're going to find what you're looking for. We welcome uh agents to come in. What So take us through it. What do you make of it? Do you do you agree with that assessment or do you think there's something else behind it? >> Well, I think that uh as you point out and and we talked a little bit with Andrew in the interview, there are def definitely different approaches to this and Amazon Walmart is as being the most extreme. So yeah, they've uh Walmart is opening up their stores to these shopping assistants, Chat GPT, Gemini, Metas. part of what they're doing, and I would say that I don't understand technically exactly how this works, but they're really allowing each agent to kind of create their own profile on a customer's account, as well as setting up some checkpoints, I guess, in terms of the customer's ability to say, well, I'm going to cap the amount of spending I will let the agent do or I have to approve every order. So, some of the concerns about kind of these rogue agents uh taking off or customers not really understanding what they're giving authority to an agent to do, Walmart is putting these these profiles in place to try to control that better and put more power in the hands of customers. So, um these will be launching here in just about a week, I guess. And um they also have this other offering called an agent gateway, which is now in beta. So we'll we'll see how all this really plays out. You know, Amazon whether that is I mean they've been saying that part of the reason why they're going slow uh or not at all in some cases on this is they really want to make sure that they are protecting uh the customers and really understand what's going on with the quality of the customer experience. Whether that's the real explanation or not um I'm a little bit uh skeptical. Well, all of this was predicted in the wonderful TV show Silicon Valley. If you remember, they built an AI agent called Son of Anton. And Son of Anton ordered up 10,000 burgers cuz the instruction were get me the best value on burgers for lunch and case of burgers showed up. So, you know, go back and watch some of those episodes. It's they're pretty they're pretty spot-on about the decisions and what's uh and what's happening today. And by the way, we also have a great interview coming up uh in a couple of weeks with no less than Jason Del Rey, who's been thinking super super hard about these things. Got great things to say in his new product, The Isisle. Uh so that is an interview coming up uh in the next couple of weeks. Well, let's uh leave let's leave the news there. Let's get to our very popular what's on our radar screen. Now, what's on your radar screen, and you hinted at it, is this big merger that's happening that has a lot of implications for grocerers and media and all the people, the gig workers. I mean, there's a bunch of gig workers who probably work for both, but uh across the board, there's some implications. So, talk about what you're thinking early days into this merger. Yeah, I mean I've said probably most of what I wanted to say, but I think this is on the radar screen because uh presumably we'll start to get more information about the regulatory review that will go on. Again, that'll be an extended period. Apparently, this news will be trickling out and I guess we'll start to get some handle on whether this deal is in trouble um or not. The other is as I said, what will be the competitive response to this? Will will a lot of retailers be like, "Oh, great. Now we've got a more powerful service to help us marry up against the Amazons and the Walmarts of the world, or will they start to look at some alternative?" So, I mean, again, this is going to be perhaps uh over a year that we'll be watching this thing unfold unless for some reason they're able to accelerate it. So, this is definitely not like, you know, the next few weeks. This is really sure >> um probably through out most of next year. Well, on my radar screen as we head into the go- go season of gift giving and apparel gift giving is textile circularity. So, sustainability in other words. Uh this week I moderated a panel retail council Canada's retail sustainability conference with Canadian Tire Whole Renfruit and Goodwill Industries. What when you start to peel back the the layers on textile and then so it's both apparel and textiles like sleeping bags or whatever. Let me let me lay some base stats down for you. So, by percentage of unwanted clothes, where do you think it goes? Donate 43%. Recycle 31%, give to friends and family, 22%. Pure throwaway, another 22%, 19% in resell. This is one of these just general what do people do? Keep 13%. That's me. I got just closets full of stuff. I'm just like, I don't want to know if I want to give it away. I'm still going to lose those 20 pounds. So, I just not going to give that stuff away. Um the European Commission estimates 4 point 4 to9% big spread of unsold textiles are destroyed. That's a nice way of saying incinerated by the way uh before anybody even wears them producing about 5.6 million tons of CO2. Now what I'm looking at at is how retailers are going to start dealing with this. And because I start to think and we're we're you know get I I can throw buzzwords out here till the cows come home. EPR, extended producer responsibility that exists in Canada and in many places for things like electronics. So you have to pay a fee. The retailer collects those fees, the brands collect them, then they give them back to the governments to do final end of life for electronics, right? So Holt Renfruit is doing something interesting. So Holt Renfruit is a luxury department store. Not I don't know how would you compare them like a Berdoff Goodman or like a Nean Marcus, something like that. >> More like Nean Marcus. Yeah, >> more like a Nean Marcus. Well, they've they've done a partnership with Shop and Shops with mine and yours luxury resale. So, they decided we don't want to be the ones we don't want to develop the skill of authenticating, you know, the brands, which is such a big important piece of of buying a resale Chanel bag or Hermes uh product. Um, so they've gotten into that. But on the radar screen is if EPR, extended producer responsibility, starts to take place for textiles, watch out. It's happening in France and it's a mess because it is so complicated and it basically you know we're experiencing it today here in Ontario where I you know in your part of the world you know it could be the case that your municipality or the city of Dallas pays the fee to pick up recyclables from the curbside right that that used to be what happens here uh in Toronto and Missaga. that shifted last year where it is now a third party owned by the brands and the grocerers who run that for the city. So it shift to the cost out of government budgets and to the brands and the retailers. In other words, the people who produce the garbage now have to take care of the garbage. This is what's called extended producer responsibility. Imagine if that starts to happen in apparel. Anyway, so it's it's coming. It's a when, not if, could be 20 years. it's starting in Europe and it's not going well. So anyway, that's on my radar screen cuz it is a massive cost uh as these things start to implement themselves and it's a massive pain. It's very political. Uh so anyway, keep your eyes on that. It's pro might even be already happening in some communities for electronics and big ticket and furniture and mattresses. Uh but uh let's keep an eye on that. We don't talk probably don't talk enough about that. We should do an episode next year about sustainability and circularity [clears throat] and and all the costs and benefits and all that stuff. Anyway, great episode. Lots going on in retail in addition to just holiday. There's just lots of great things going on. Let's leave it there. Thanks for tuning in. To help more retail leaders discover the industry's leading podcast, please drop us that five-star rating and review [music] on Apple, Spotify, YouTube, or wherever you enjoy your pots. And for more of my strategic advisory services, keynote speaking, best-selling books, and even more retail industry insights, go [music] to stephvenpdennis.com. If you are a brand or service provider looking to take your influence to the next level, reach out to us for sponsorship, advertising, or event partnerships. And if you want to learn more about my own keynote speaking and advisory practice, reach out to me via LinkedIn. Heat. Heat. N.

Assistir ao vídeo original no YouTube

Assuntos: Plataformas e marketplaces, Marketing e SEO, Logística e pagamentos, IA e tendências. Publicado no YouTube em 2026-11-03.

Seleção automática por assunto e idioma. O vídeo pertence ao canal de origem.