CVS “Mini-Stores,” Google Shopping & Loblaw’s Plan To Slap Tariff Labels On U.S. Goods

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It's March 12, 2025.

I'm one of your hosts, Anne Mazinga.

And I'm Chris Walton, and we are.

Here once again to discuss all the top headlines from the past week making waves in the world of Omni Channel retailing.

And Chris New Sponsor Alert.

Did you happen to catch that at the beginning?

I know infios yes.

Yes.

Our friends at Infios.

Yes.

In the order management space.

Yes.

Excited to have them on board.

Anne.

I know, I know.

Infios has joined the stable supporters of this show and we could not be happier.

Yeah.

And also Ann, did you also see that Simbi had a huge announcement yesterday too?

Kroger announced that they're piloting, they're doing kind of a bake off with them and another provider, you know, to prove out robotics in 70 stores across Kroger's chain.

So yeah, we got some, got some big news on the sponsorship front.

And in addition to that, we got some special guests today, don't we?

And yes, we do.

I first of all, I love that you're comparing like sponge cake to robotics in this.

Somehow you made that link and better for it.

Bake offs are always good because bring a smile to everyone's face and you know that.

Yes.

Well, the other people that bring smiles to our faces are those joining us for their regularly scheduled monthly appearance, the Alvarez and Marcel consumer and retail groups, David Schneidman and Chris Creit.

Chris, Dave, welcome back to the show.

I want to spend a quick second here giving the audience a quick reminder about each of you and your backgrounds and roles at A and M.

So Chris, let's go to you first.

Yeah, thanks Andy, thanks for having me.

And Chris, I'm Chris Kreitz live in Charlotte, North Carolina at A& M.

I serve some of our largest brands on topics like merchandising, store operations, store formats.

So really excited to be back on the podcast.

Thanks for having me.

Also, one of my favorite new product recommendations that you gave us, the nacho protein chips which have become a staple in our household after your last appearance on the Fast Five.

Chris, I love it.

And also another favorite food related fun friend, double chicken.

Dave, welcome back to the show.

How are you doing?

Give, give the audience a little bit of your background.

I'm great.

Thanks for having me as always.

My name is David Schneiman, native New Yorker, live in Austin, Texas.

I'm the ying to the yang with Chris.

He focuses a little bit more on retail.

I focus more on consumer.

Spent over a decade in industry and brand and corporate strategy and with Ann for almost four years focusing on consumer growth strategy, consumer operating model and consumer value creation for the most part.

And can you guys tell me a little more about these nacho protein chips?

They sound fantastic and I would love to know what we're talking about.

Yeah, I was gonna ask that.

Chris, what was the brand?

What was the brand of those chips.

I don't remember.

Quest.

Quest protein chips.

They take.

Oh yeah, Quest.

Yeah, that's.

Yeah, they take whey protein, deep fry it and then put Doritos cheese on the outside and it's 20 grams of protein for 120 calories.

They're amazing.

Did you know that they also now have like Reese's Pieces and M&M's and cupcakes.

They are literally going all in on every type of snack that you could possibly want.

You know what, we need to just cancel retail news and we should just talk high protein snacks for the rest of the show.

Is that, Is everybody okay with that?

Honestly, I think so.

Or.

Or we're just making an overt move to get Quest as our other sponsor for the Fast 5 ad.

But with that said, let's get to today's news because we got our friends from the A and M consumer and retail group here with us and it's always our favorite show of the month when we ever we have them on.

So in this week's Fast 5, we've got news on Loblaw identifying US made products at shelf with a new tariff symbol.

Google Shopping's new AI search features.

Rekts claims that it has reduced product development lead times by over 60% with generative AI and Portillo's launching a new loyalty program not through an app, mind you, but through a digital wallet.

But we begin today with big news.

Or maybe it's really mini news out of cvs and I see what you did there.

Headline number one.

CVS is rolling out new mini adorable stores.

According to the Wall Street Journal, CVS Health is preparing to open dozens of stores offering full service pharmacies but very limited retail.

The new stores will be on average less than 5,000 square feet or not even half the size of a typical CVS location.

The company said the 12 new stores are expected to open over the next year in cities and towns throughout the US and will still stock health related products such as over the counter cough and pain medications or first aid care.

Missing from their aisles, however, will be the vast array of consumer items such as greeting cards, groceries, nail polish and others for decades that have been a staple of CVS and other national drugstore change chains.

Sorry, Dave, let's go to you.

What do you think of CVS's overt move to mini stores?

What do you think that signals about the same state of pharmacy retailing?

So, so, and I'm, I'm quite intrigued with this model.

I think we all know that the Drug category as a whole is going through this real big inflection point.

And so they need to find some way to, to innovate.

And separating pharmacy from the convenience store I think is a really interesting idea that it's been a long time coming in the industry, especially here in America as, as in Europe, it's, it's already like that.

And so now currently the drug retailers, they serve different purposes and they have different clients and especially in less urban spots.

In urban spots you can rationalize you do it all in a one stop shop at your local pharmacy to get food as well.

But in more suburban areas, I think you're serving different clients and this can help on a wide array of things.

It can reduce your fixed costs around rent, improve your labor.

I think the assortment will have a huge, you know, positive impact around on shelf availability and inventory management.

And then you also have to want to be less promotionally focused.

You know, I'm sure if we walk into not even a cvs, but really any drugstore, you'll see there's a lot of, of your standard household goods on promotion, which really drives down your profitability overall.

You know, I think this is a really interesting concept.

I would be, I would, I would love to know if they're having some sort of like impulse buy section still, whether that's seasonal or some snacking or some sort of DSD piece.

I didn't see anything on that.

That would be something that I'd love to learn more about.

But overall, I'm not going to say I'm bullish right now, but I think it's a very interesting concept that, that, you know, with a 12 store pilot, why, why wouldn't they do this?

Right, right.

It gives them a way to like you were saying, like minimize theft, minimize operations and promotions and all the things that they have to do to manage that front end of the store and really focus on, you know, what's bringing them revenue in the, in the near term.

And that's, you know, the pharmacy business, the over the counter business and you just want to still be able to get your quest protein chips is what I'm hearing when you pick up your prescription.

Yeah, I would, I would love that.

I love the big bags.

Yes, right.

Not, not the mini grab and go.

You want the solid size.

Well, we'll, we'll figure out how they can make a CVS just for you, Dave.

But I mean it is true if you think about it, it's an intentional run for some sort of medical need.

Unless you're in A more really urban area where it's, then it's a little bit more convenient.

So I think this model is super intriguing and I can't wait to experience one of them.

Right, Chris Kreitz, where do you fall?

Yeah, I think similar in line with what Dave said, I think there's a notion that the long term pharmacy model needs to change.

I think this is experimenting to say what could it look like?

I think the only thing I'd build to what Dave said is I think there's some testing here on the interaction between the front end in the pharmacy and what that dynamic really is.

I think everyone thinks the pharmacy drives the front end and I think this is kind of testing that a little bit to say if we take out all of the front end, is there any adverse impact on the pharmacy itself, which would be the downfall of this concept?

Right.

If you start losing scripts because people want to be able to get multiple things on that shopping trip, then this concept starts to unravel.

So I think they're testing this, they're testing, you know, some other formats as well.

I think this is more exploring.

You know, can we still keep all the high margin health sales on the retail end with a very stripped down assortment?

How, how sharp can we get with our assortment before we start to lose those sales?

And will it have any inverse impact on our scripts at the pharmacy if we don't have a massive selection of health products?

So, yeah, right.

It's, it's, it's great that you bring that up, Chris, because I think it's, you know, really balancing the points of like, we know there's a markup on some of those, you know, beauty products, there's a markup on the food, there's a markup on those convenience items that you're talking about.

But then how does that balance with, you know, how much they're losing due to theft, how much the real estate, you know, per square foot costs in these larger CVs stores?

So there's a lot going on there that you're right.

I think they'll be able to pressure test here with those 12 stores to see how much of an impact it makes.

Chris Walton, you're the merchant of the group here.

What are your thoughts on this approach that CVS is taking with the mini stores?

Yeah, I mean, I, I don't think it says that much about the pharmacy industry.

I think when you get right down to it, I think it's just a smart segmentation approach.

And so I kind of would echo what David and Chris, you know, were saying, I think, you know, on the small format of just being a pharmacy, basically, I think the interesting thing about this is CVS has kind of tested this already by way of their relationship with Target.

So they know if they're only in the pharmacy business, what the operations of that look like and the profitability of that looks like.

So that gives me credence to understand that they know what, they know what they're up against.

But to Chris's point, they have to understand what the traffic dynamics are that comes with this type of format.

But the other thing the article says, which is interesting, I think it's important to point out, is they still plan to open 30 traditional stores, which is three times the amount that they're going to open up this pilot.

So I think the other thing that I call out, and because I made this mistake, I'm interviewing CVS's chief merchant at Shop Talk on stage and I actually made the mistake in my prep with him.

I said like, you know, but the pharmacy is such an important aspect of the traffic driving.

And he's like, no, it's, it's not always the case.

And to David's point, in urban areas it's flipped.

So, you know, the pharmacy is less important than the grab and go.

So, so I think, you know, it's just about balancing that out and understanding the puts and the takes with it across a smart segmentation strategy.

So that's what this is all about to me.

Yeah, I think, I think the only thing I'd add here at the end is that they also still have the advantage in a lot of places of being the only place that you can go to get your prescription within a matter of minutes or hours where there is not same day delivery of prescriptions.

However, I think that's, that still is not something that they can rest their laurels on either.

Because I think we're going to start to see increasing same day delivery.

We're seeing that with Walmart, with Amazon, with, you know, Walgreens.

And if as those, those timelines get reduced and you're starting to see more same day delivery, I think CVS being the place where they're seeing, you know, 80% of traffic in some stores is due to the pharmacy and prescription, like, will they be able to still rely on that?

And once, you know, if you have a small format that's only pharmac, does that go away when that can be delivered to my house?

Especially when you're not feeling well, I, I think that's something too that will have to be factored into some of these decisions in the long term.

Yeah, and hopefully they're thinking about that in the design of this prototype too.

Like, you know, the fact, the fact that it's such a small assortment should make the delivery and pickup of those goods that much easier to operate as well.

All right, so headline number two.

Loblaw plans to identify products sourced from the US With a tariff symbol according to Canadian grocer shout out to them for their first ever Fast5 appearance.

And Loblaw plans to slap a new T symbol standing for tariffs on labels for products sourced from America.

Loblaw Companies limited President and CEO Pear bank, the early front runner for best retail CEO name in human history, said prices won't rise immediately as a result of Canada's counter tariffs on US Goods like poultry, dairy and produce, but when they do on some items in as little as one in one to two weeks.

He said the new T symbol will help Loblaw's customers make informed purchases.

Quote, we are pro Canada and not anti usa.

We have made, we have many trusted US Vendors, but we will be responsive to our customer needs.

Parabank said customers can be assured that when tariffs come off, any tariff pricing changes will be entirely removed, end quote.

Chris Crates, what is the general approach you are seeing US Retailers take amid all this tariff noise?

Yeah, it's a great question.

Dominating a lot of time for most of our clients right now.

I think in the beginning scrambled to figure out what's actually impacted.

As you think about working with vendors, with manufacturers, how their supply chains are impacted, the velocity of new updates on the tariffs, I feel like every day I get a new text that, hey, this has changed.

You know, you have the Canada Mexico tariffs, you have the China import tariffs, you have the steel and aluminum tariffs.

There's so many different levers.

There's questions about how they'll be implemented.

You know, with the steel and aluminum tariffs, the way it's written, it's actually only on the fob portion of the goods that contain steel and aluminum.

So not just pure steel and aluminum goods.

So there's lots of questions like how will these tariffs stack together?

You know, they weren't necessarily released in the most descriptive, easy to implement way.

So I think there's been a lot of spin cycle trying to, number one, interpret what's actually going to happen.

Number two, think about how it'll be implemented as you import products.

You know, the.

Some of the good news here is, you know, we've kind of been through this cycle before.

In tariffs.

So there's a, you know, a playbook that a lot of folks, folks have, have written already and how to deal with tariffs.

The other kind of tailwind, if you will, is a lot of folks have started diversifying their supply chains away from China kind of as a result of the last cycle.

So there'll be some less impact here.

But you know, the, the, the kind of universal approach that, that folks are taking or should be taking is, you know, everyone's starting to look through their supply chains and figure out where there's going to be cost impacts.

I think what the best people are doing is trying to have data focused conversations with their vendors and their manufacturers to understand what actually the cost impact is so that you're not taking, you know, additional, call it margin seeking cost increases from your vendors because a lot of times they can tuck in stuff like that under the guise of, oh, cost of business has increased because of tariffs.

So I think there's a portion of that.

And then, you know, everyone's thinking about how do I start?

Where can I raise prices to account for this, where do I have elasticity, where do I not have elasticity?

And then kind of on the far end of the spectrum, you have even some retailers placing, well, it's, it's past now, so placed, you know, front running orders to try and bring in lots of inventory ahead of these tariffs.

So wide range of reactions kind of.

Let me make sure I understand that.

Also, I'm gonna ask you a follow up question.

So, so, so would you, so would you say that generally speaking, retailers right now are assessing the situation versus taking definitive action yet until they have more understanding of what's in front of them, with the exception of China, where it seems like maybe people are taking more action on the rerouting of Chinese production.

Is, is that a good summary or what am I missing?

I think that's right.

But there's, there's work you can do ahead of time while you're waiting.

So I think the work is happening.

For example, you know, you can build models of.

Here are all the skews that could be impacted, whether it's a 10% China tariff now a 20% China tariff, you can modulate some of those things.

So I think people are laying the groundwork to say, you know, there's four big categories of tariffs that are out there now, which skews do we have that could be impacted by these?

And then building the model in a way such that, you know, as certain tariffs drop through negotiations or certain tariffs increase, you you have the groundwork to, to be able to simulate impact to cost and, and therefore pricing.

Okay, got it.

All right, so let's, let's switch gears here a little bit on this one because I think this will be fun.

So, Ann, what do you, I'm curious what you think of Mr.

Pear bank and Loblaw's approach to this problem.

What's your thoughts there?

Oh, my God, it's so passive aggressive Canadian.

I love it so much and I do love the Canadians.

Like, we're just gonna put these stickers on and you can make the call.

Listen, I think that Chris hit it on the head.

Like, what, what's really important here is for retailers to be making sure that they have the most price elasticity to bring customers in the door.

Because ultimately I think that's what the biggest challenge is going to be.

Customers are going more price conscious than ever.

And so you're going to have to figure out, not like by putting these tariff stickers on.

I think that's fine.

Whatever you want, how you want to message that to your consumers, but ultimately it's going to come down to price.

And it gets back to, you know, the conversation we had with Matt Povich from ravionics last week of like, what are you doing to invest in pricing software and optimization so that you can be ahead of the curve and really give your organization the agility that it's going to need to handle the constantly changing tariffs and just continuously offer your customers, Customers the best price possible and, and give them the least amount of impact to their daily shopping.

Yeah, that's a, that's a great point.

And yeah, if you're a pricing solution provider right now, you're loving this.

I mean, God, because, yeah, the retailer is going to have to invest in upgrading those systems.

That's funny.

That's funny.

I actually just think, I actually personally just think it's brilliant merchandising.

Like, I give kudos to Loblaws, like, because, you know, it's just, it's just a smart thing to do.

The art of retailing is taking advantage of situations as they arise.

And that's what they're doing here.

They're going to.

And by default, they're going to push their private label products as a result of this too.

You know, that's a great point.

So I think that's what they're doing and it's beautiful.

But David, you get the last word here.

What do you think, what do you think on what they're doing or what do you think on the state of tariffs, like how the industry is reacting.

You take the last call here.

Yeah, I want to, I agree with every, with every, with everything that everyone said.

I think I would take a little bit of a different approach here.

I'm going to take consumer first.

So first with the Loblo piece, it's another way to have another conversation with their consumer to drive loyalty.

But then also I'm not going to say trade down to private label because in many ways for them it's trading up in margin.

So I think that's another way for them to drive brand affinity as it relates to consumer perception.

On tariffs, based on the research we've done, there is a little bit of an expectation that all prices are going to increase as it relates to tariffs from Mexico, China and Canada.

So similar to where inflation was a couple of years ago, where there is an expectation that prices will go up.

And I think it's a question of where that will come from.

Discretionary spending will naturally go down, but you also have to be mindful on price increases there.

But on traditional household goods and dairy and daily products, the expectation consumers are having like similar to a eggs is that prices will go up.

And, and I think what will be interesting with retailers is do you automatically pass those costs to the consumer?

Where do you renegotiate with suppliers?

Or even in certain impact, do you see an opportunity to increase price when actual cost has not increased?

So do you, you know, premeditatedly.

I'm not even sure if that's a word, increase prices to offset future cost increases via tariffs.

And so I think when it comes to traditional food and beverage products and even personal care, consumers are expecting price to increase.

Now the question of how much that is and where that inflection point is.

Tbd.

But it will be interesting to see.

That the other winner you had, Chris, you mentioned pricing software.

Probably the other winner here is like discount and off price retail, right?

Yeah.

I was just thinking Walmart wins.

Yeah, Walmart wins in this, in this world they continue to win, you know that 100%.

Yeah.

I mean the other part to me is like I go back to econ 101, that the expectations of inflation are just as important as the actual inflation because you know, one drives the other.

And so yeah, it's really interesting.

All right, let's go on to headline number three, guys.

Google's new shopping tab has a new AI tool that makes your fashion idea and suggests.

Sorry, that takes your fashion idea and suggests similar clothing Options.

According to TechCrunch, this new feature dubbed Vision Match is now available in the search experience on mobile for US users.

It lets shoppers describe a garment they're imagining and then the AI suggests ideas based on the description along with the best available matches that users can purchase.

To try this feature, users simply type an idea into the search bar and scroll to the can't find it Create.

Create it prompt or go to the left panel in the Shopping tab and select Create and Shop.

Chris Creates.

On a scale of 1 to 10, how would you say that retailers and brands with whom you work are prioritizing investments in Gen AI search?

Yeah, I think.

I think it's pretty high.

You know, maybe call it like a seven.

It's definitely a topic that's getting a lot of talk.

I think.

Really, it is.

Yeah.

And I think it's not.

It's not that people are dumping investment into it yet, but I think everyone's really curious.

Like from a merchandising perspective, you have this fear that you carry the product a customer is looking for and they can't find it.

And somewhere in that discovery journey, it breaks.

And I think that is a very real fear that people have.

Now, does, like, these AI tools actually solve that?

You can upload a picture of a, you know, a garment into someone's search on like a victoria secret.com and it'll suggest all the other ones that we have that are like that.

Does it really drive value?

I'm not sure, but I think there is a deep desire to make sure that you're serving intuitive search results.

You.

I think no one wants to be the last one that or the last one to build a more intuitive discovery process.

I think there's some other cool elements that are coming out of these, like personalized searching.

If they already can use.

If you can use Genai to better understand someone's purchasing and browsing history, then you know what to present to them.

So it's not only returning more intuitive search results based on what everyone's looking for, but I can present you with the things that I think you're most likely to buy based on what you've bought from me in the past.

I think there's definitely some upside there.

So I'd say there's a lot of interest.

I know people who are actively doing, you know, part.

There's a lot of partnerships with Google Cloud in this space, so I think there's a lot of traction here and a lot of interest in the area now.

Is it translating to immense value yet?

I'm not sure.

I haven't heard anyone really toting massive EBITDA gains from, from AI search yet, but I think there's a lot of interest.

So Chris, would you say that you're like your recommendation for retailers is what then is it to start to look at investing in this on their own brand site, to start to look at this from how they show up in these searches or like how are you navigating this, your recommendations for them?

Yeah, I would think back to what your consumer data is telling you and what your shopping data from your website is telling you as to whether these are investments that make sense for you.

If you're seeing low click through rates, if you're seeing as you walk that funnel from your website in terms of how people interact with your your site, if you're seeing searches that don't result in the right click throughs that you want, then maybe this is something that is a true gap for your business where you prioritize those investments.

And Dave, is this consistent with what you're seeing with clients that you've worked with as well?

Yeah, especially within fashion and apparel.

It's super important as it relates to personalization and customization.

Now with the amount of data that's out there and the amount of options that consumers have, they want something that's tailored specifically to him and her.

And this is a more, potentially more seamless way to drive customization on things that are unknown.

And I think right now we live in a world where more is more.

And so having this AI tool, if done correctly, to Chris's point, could have huge impact.

Maybe not as much to conversion, but at least to loyalty and traffic.

And I think that's where they should start first.

Is this a traffic driving piece?

And then how does that relate to actual conversion of sales?

Right.

Especially as search behaviors are shifting, you know, and well, there's a whole track that's going to be dedicated to that at Shop Talk next week.

Chris Walton, that, that you and I are both going to be having, I'm sure, a lot of conversations with retailers about.

Chris, what do you think?

Everybody knows how I feel about Google search right now, so I don't need to spend too much time on this.

But, but I'd love to get your, your insights because I've made you include yet another Google headline in our Fast five.

Yeah, I made the joke that this is like your Google orgasm of the week, right?

Like this is like every, every month.

Every month.

Gotta hit every month.

Yes, I know, but no, I mean, first of all, I'd say like Stepping back, it's, it's quite comforting to hear David and Chris say that retailers are actively thinking about that.

This I agree, that's good.

I mean it shows me they've learned from the mistakes of the past where they discounted E commerce for so long.

So, so that's very comforting.

The one place where I probably, I disagree with, I think Chris, who said this is I do think there's an order of operations here of the right way to approach this from a retail executive perspective.

Because like I think was outlined, I think there's two imperatives that, that the retailers are facing.

One, they have to decide how they want to show up on the search engines themselves and two, they have to decide what it means for their own e commerce experiences.

Right.

And I'm inclined to disproportionately invest in the former because that's all really about having great data quality at the end of the day, which is a good thing to have regardless.

Whereas the latter, to see the benefit, it's going to still require a step change in how people shop which is likely going to come by way of a culturing to the search engines themselves.

So I think that's kind of a next order of operations concern.

You got to get your data quality right first and the proof point will be how do you show up on those search engines?

That, that's, that's the approach I would be taking if I was in the executive chair.

Yeah.

And Chris, I, you got me thinking of something too.

Like as, as we talked about as searching behaviors are changing and you know, even people are going to a brand's own website even less so traffic like this is going to be really important and making sure that you're investing and showing up on the search engines on Google or on any of the gen AI search platforms too where people are going to be starting their, their searching and discovering process.

But I also wonder if like from Google's perspective, does this allow them another data set to sell to brands in the long run of like, these are the things that people are creating like for specifically for this tool.

Like here's what's missing in the category here.

The search terms that people are entering in when they come to this Google create and find tool and then they can in turn take that back to the brands and be like, as you're developing your R and D, as you're trying to figure out like what the next trend is, here's another collection of data that we can give you exactly pinpointed information on.

Here's what people are dreaming up that doesn't exist out there in the world.

Yeah, I mean, it's, it's a 100%.

It's another data point for Google.

It's another data point to serve up advertising too, in the platform as well, which I'm sure they're thinking about, you know, long, long, long term, you know, without a doubt.

So, yeah, I think, I think that's exactly right.

And the other point I'd make too is like, you brought it up like the traffic to websites is going to be less and less.

So, you know, you've got to convert it, but at the end of the day, you need to show up where the traffic is going to go.

And so that, that's the point I would make here, that people need to keep top of mind.

Excellent.

All right, let's go to headline number four.

All right, headline number four.

This one's going to be a fun one because we have some personal experience related to this next headline.

Wreck it has increased its product development output, allegedly via AI.

According to ConsumerGoodTechnology.com, early findings of gen AI applications in product innovation have reduced development time for Rekki by up to 60% while also improving quality.

The company has been piloting the technology with its finished brands to analyze years of past research and test data to develop new product concepts, quote, grounded in science and consumer insights, end quote.

And shout out to all our Finnish listeners.

And Shannon Eisenhart, Reckitt's cfo, said during the company's recent earnings call that new generative AI tools would be rolled out across its R and D function in 2025 to drive productivity and product superiority.

Before adding, you had better check yourself before you wreck it yourself.

David, are you buying or selling?

Reckitt's claim the generative AI has reduced its product development lead times by 60%.

So.

So that disclaimer that Chris was talking about is, yes, I did work at Reckitt for a few a decade ago now.

One of the things that really resonated with me during my time was that there was this concept of speed over perfection.

And that really has resonated with me.

Not sure if it's still embedded in their core culture, but what I liked about that is when it comes to consumer goods companies, the way to drive significant growth outside of geographic scale is incremental new product launches.

And so you really have to nail that.

Your entire year is based on how do you launch, drive, grow, scale new product.

And so the two big things around there is speed to market and then Quality which drives incrementality.

And so if they're actually hitting both, that could be huge.

So conceptually I'm buying from an execution standpoint I don't think it's as simple as that.

Leveraging that real time data to have understanding from consumers where you can then make those changes.

I mean right now most consumer goods companies, it's anywhere from 12 to 24 months to actually launch a product from concept to in market.

And oftentimes by the time you launch that trend or fad is already late, it's already packed.

And so if, if, if reckon can actually reduce the, the time to launch by 60%, they can actually be there while the trend is happening, drive those incremental sales earlier and then also optimize a new product launch to actually then be more scaled and more efficient.

So if they can can do this, this could be huge.

And so I'm really going to be looking forward to seeing what happens with this.

So I'm buying this technology if it actually says what it does.

So you're buying it.

Yeah.

It reminds me of one of my favorite quotes too which is I think from ideo, which is enlightened trial and error succeeds over planning every time.

And what you're saying is that AI is enlightening the trial and error which enables them to bring products to market faster and to innovate more quickly.

Yeah, I mean if you think about it, you don't actually know what's going to happen with the consumer until they try it.

So if you're worried about perfection, what you really need to do is get the product in consumers hands, listen, learn, improve it and then continue to grow.

And so I think it's a continuous process so, so without a doubt, yeah.

I'm buying it too man.

I mean I'm, I'm, I, I, I particularly the applications of Gen for me for CPGs relative to retailers I think are much, much stronger and much more readily available too.

That's a point that we've made on this show a number of times because and I'll never forget last year I sat in at Shop Talk on a Kellogg professor talking about how to do this.

He had basically built out an entire process for how to do this.

And I was sitting in there speechless, like my mouth was just hanging open like oh my God, look what you can do from a product development perspective.

And if I was a CPG executive or if I was in charge of private label brand development at a retailer, the first thing I would have done is gone up to that guy and be like, I want you to take this to my company right now.

And I'm sure if he can do it, other people can do it.

And so, yeah, I'm with Dave.

Like, I think, I think this is probably real.

The devil be in the details from the operations perspective.

But, Ann, what do you think?

Yeah, no, I completely agree.

I.

I've actually been talking to quite a few CPG executives in preparation for a session I'm doing at Shop Talk.

And what I think is even crazier, Chris, and might blow your mind this year at Shop Talk, is how they've taken the, the smart early investors in AI for their R D processes and collection of trend data, purchase data, focus groups, all the data that they're collecting to inform where they take their products.

Now they're building AI agents to go in and kind of cross check what, what the AI has found, what the people working at the CPG organization have found as like a third party check on what's been happening here.

So there's already companies that are like light years ahead on really trying to maximize how they're applying Genai and AI tools to this process.

So it's.

I'm 100% buying it.

Because what a CPG does is different than what a retailer does fundamentally at the end of the day.

Correct.

And one of the things I would love to understand is how does Genai take into account your actual route to market and production capabilities.

So you can, you can fundamentally say this is the next trend, this is the next product you have, but if you don't have the capacity, the capabilities, the actual logistics, then it's more of a conceptual, theoretical piece.

So I think that would be interesting.

And as it relates to a lot of cpg, it's not fast fashion as it relates to beauty and retail.

So I would love to see how this can actually be democratized to where speed is the most important thing for innovation with certain categories like that.

So I think there's a lot of interesting things with Gen I that, that we're going to see in the next, you know, 3, 6, 12, 18 months.

I'm really excited to see where it goes.

It's kind of crazy that we're still in year two of this whole thing.

All right, all right, other Chris, what are your final thoughts on this wreck it story?

No, I think you guys had some really good points.

We talked a lot about like in customer insight and sentiment generation and how that'll help you reframe, you know, possibly failing products or invent new products.

I Think that's, that's all.

It makes a ton of sense.

The other thing is, I think like when you think about speed to market, there's like product design and like feature innovation and all that, but there's the second half of that Speed to market is like the marketing campaigns too, which I think this will also help of.

How do you localize and adapt the main marketing messages from wherever the product originated to, to the, you know, if you're a multinational, 30, 40 other countries where you're trying to sell this product, which can actually slow down that speed to speed to market as well, I think is a whole nother interesting kind of lens too.

Right.

It speeds up the innovation process.

It also speeds up the marketing campaigns and launch process to get you that faster go to market time.

Yeah.

And that was the number one use case that I heard loud and clear throughout most of last year with the CPG brands that Ann and I were talking to.

All right, let's go to headline number five, guys.

Portillo's.

I can't even say the name of the restaurant.

The hot dog chain.

Clearly I'm not a frequent, frequent visitor at the hot dog.

Missing out and missing out.

I'm missing out.

They hope that their new loyalty program based in digital wallets can offer personalized options for guests and businesses without the issue of app fatigue.

According to Marketing Dive, Portillo's has added a loyalty program called Portillo's Perks in which rewards are based on frequency and consumption habits rather than banked points redeemed by the consumer.

The frequency element of the reward structure combined with digital wallets rather than traditional app based programs, quote, allows us to truly personalize offers so we're able to surprise and delight our guests with easy access and relevant rewards.

End quote.

Portillo's CEO said, Dave, because you are our double chicken, Dave, sweet green loyalist, you have the most QSR experience.

That means what do you think of the idea of driving loyalty via a digital wallet versus an app?

And do you think that app fatigue is a legitimate reason to press forward with a wallet based approach?

I do not know if this will have any impact on sales or traffic, but what I can say is app fatigue I believe is real.

Really?

Tell me more.

So I, I think this concept of food aggregators, I'm not even aggregators delivery like you have doordash, you have Uber Eats, you have toast, you have chow now where you have a plethora of QSR restaurants at your fingertips that also have loyalty connected to it like Dash Fast.

I think that is a more seamless way the Amazons of food and delivery and pickup and so when you have individual apps where they might have loyalty or they even don't and they're just trying to get your information, I think is not going with where the consumer is.

I think having something that's a little bit more with the daily use case of a digital wallet is something that is novel and interesting.

Now will it actually drive that level of loyalty and repeat that they're hoping?

Not sure.

But I think it's a really interesting pilot to test that's outside of the app.

Personally, I was going to say, you guys know my affinity for sweetgreen.

I couldn't tell you the last time I used the Sweetgreen app.

You know, everything I do is through DoorDash because my whole world through that and when I'm just there, I just, just order it normally.

Especially considering the loyalty doesn't exist or go as far anymore, but at least a, you know, sample size of 1.

I have almost no apps now related to restaurants and qsr.

It's all aggregators.

So.

Interesting.

It'd be interesting to see if something like this works.

But if you think about it, most of the consumers use their digital wallet more than anything.

So fish, where your fish with the fish are is what I'll say, right?

Interesting.

Yeah, I, to me, like, I don't know if I'm not understanding this correctly, but to me this is like the equivalent of just a digital version of like my Starbucks card, like my gold card.

That's now like, I'm not understanding the benefit of this either.

I don't know if I can side on you with the app fatigues portion of it because I think when you are frequenting certain places, like Starbucks, for example, like I use my Starbucks Apple five times a week.

No problem at all.

But I think you're bringing up an important point though that I hadn't thought about, which is like, yes, now there's all this consolidation that's happening and are you just going directly to your, your delivery apps, your Uber eats, your door dashes, Chris Creets, where do you fall?

Yeah, first of all, I'm updating Dave's contact information on my phone to double check in.

Dave?

Yes, that's how.

That's the only way we refer to him here.

Only way.

Yeah, it's gotten two years.

Yeah, I mean, I think, I think it's funny, right?

I'm, I'm like, let's be real.

I'm a.

I'm, I'd be a little self conscious to have a hot dog ordering app on my phone.

Like where, where have I got to.

In life where I have a hot dog ordering app?

So, so I don't, I mean, I don't think it's that much different than, than having an app.

It's like, you know, you still give them your information, you still sign up with your email, and to your point, it just appears like a boarding pass in your wallet.

Yeah, it's really easy to use, so I don't see any downside here.

I think the interesting part, I used it this morning, or I played with it this morning.

I lived in Chicago for 10 years, so I was interested in this.

One of the interesting things I thought was you don't earn any of their loyalty rewards or perks and a visit doesn't count unless you spend at least $10, which I thought was like a really interesting kind of basket building price point for them.

But I like the concept.

I get why people aren't going to install one more app for a restaurant that maybe isn't so core to their identity, like Starbucks.

So I like the idea.

Okay.

I think apps work if it's, if it's retail or, you know, something that's around more fashion or retail, not necessarily food.

And those food is the delivery apps, not specific restaurants.

Starbucks is different because Starbucks is a daily routine than if you go to a restaurant once every three, four weeks or maybe, maybe you get a hot dog every day.

You know, you do, you.

We don't judge, we don't judge people's, people's QSR habits on this show.

That's another whole nother podcast.

Okay, Chris Walton, I know you have some differing opinions here based on our prep discussions, but what is your thought on app fatigue and where do you fall within all of these opinions?

Yeah, I, well, first of all, an app fatigue.

I 100% disagree with David.

With all respect, like, I, I have been hearing about app fatigue since 2010.

I think it's just a baloney excuse for many people that just can't get people to find value in their app.

That is essentially why you're hearing this.

And so the second piece of this to me is, you know, what's, what's going on at Portillo's from an executive perspective.

You know, if you think digital wallets are better, like Chris seems like he liked it.

Okay, just say that.

Come out and say that.

Yeah, don't say that.

It's because people have app fatigue.

That's just, that's just baloney.

They have App fatigue.

Because you haven't been providing value to them.

So you've talked about Starbucks.

Dave, I would disagree with you here.

Chick Fil A.

Chick Fil A's got the best app out there, and so contacts matter.

So Portillo's.

But.

And here's the other thing.

Portillo sites pound, like the article says they do.

$9 million a year, and with volume like that, your customers should want to use your app.

I like Portillo's.

We have one in Minnesota.

I go there regularly.

I get more than hot dogs.

They also got nice Italian beef sandwiches, I might add.

And their app.

Their app is someone who's been in this space.

I.

I'd grade it like a 5 or a 6 at best compared to, you know, what you get from a Chick Fil A.

So.

So I think that's the real issue here.

And that based on.

On their recent performance, because they've had a down year too.

I wonder if the executive team really gets that or is just kind of fumbling in the dark for trying to find an answer to loyalty when it might actually be staring in the face.

Because getting Chris to do this is new.

It's a new consumer acclimation issue that you're creating, and you don't know what's in front of you.

Whereas if you can get your actual app to work harder for you, as other people like Chick Fil A can do, I think that's a smart move.

So I don't think it's an either or situation either at the end of the day, but I don't think you should be like, we're disavowing our app because of app fatigue.

I think that's just absolute bs.

All right, well, there you have it.

That the.

The tribe is the first time Chris.

And I have ever disagreed in this entire.

I know, right?

Yeah.

Eight times.

Did I bring you to my side, though, Dave, or what?

I don't partially.

I.

I don't need a thousand different apps.

I think I.

I think it's different if you're a loyalist and you go to Portillo's every week or every two weeks.

That's different.

Like, I still have some qsr, but there are other ones.

I'm just like, I haven't used you in a couple of months.

Like, I'm gonna get rid of it.

Yeah.

Yeah.

Right.

Cause there's no value in them for you.

Right.

So that's right.

But, yeah, I mean, I download the McDonald's app every summer again, because it seems like during the summer, that's the time that we're using it.

So I don't know, I guess to each.

To each their own.

Let's go to the lightning round and get us out of this conversation.

The first goes to you, Dave.

A recent study conducted by Dalhousie University and cattle claims that eight in 10 Canadians are willing to switch brands or stores for better deals given the current economic climate.

Dave, what's one product that you won't switch stores or brands for?

This is.

This has been my new product of, of choice.

It's.

Oh, gosh.

You're like, what's so sexy?

Olipop.

You know Olipop?

Oh, yeah.

Oh, yeah.

So prebiotic soda.

Yeah, I, so I, I didn't realize I liked soda because I just stayed away from soda, but I realized I really like soda and I.

And I think Olipop is a great alternative and I hit my fiber goals.

Just don't tell my wife that there's caffeine in it because we have it at night.

And if so she finds out there's caffeine in it, she probably won't be, you know, having with me, with me anymore.

So you're not, you're not going to the good and gather Target brand of Olipop.

You are an Olipop loyalist.

I am an Olipop vintage cola fan and we drink a lot of those.

We don't do other types of sodas.

We don't do other probiotic brands.

We are an Olipop vintage cola.

So shout out to that one.

The other ones are good, but I love, we love that one.

So that's, that's one thing.

Prices are relevant.

Next thing you know, and Dave's gonna tell us he has the Olipop app on his phone.

All right, back to you.

You know, I'm for sale, guys.

All right, back to you, Dave.

Speaking of tariffs, President Trump yesterday said he plans to double his plan steel tariffs on Canada, which begs the question for us.

Are you more a man of steel or blue steel?

If you could only choose one.

Well, I, I'd love to say I want to be a man of steel, but since I'm not an Ambi Turner, clearly I'm, I'm a blue steel guy.

Ambiturner, you remember Zoolander can't turn left.

And I mean, you know, I've been in beauty some of the face like this.

Clearly I gotta be blue steel.

Yeah, yeah, yeah.

I picked that question just for you, my friend.

All right, Chris, you get the next one.

Best Buy announced last week in an earnings call.

That they will be opening up influencer and creator storefront capabilities on their website.

What would be the first Best Buy product on your influencer storefront?

Okay.

And I'm coming back at you with another food focused recommendation to try and build on my quest chips here.

They have something called Sauce Moto.

Now, it's an accessory for your car, and it hooks into your air conditioning vent, and it's a little holster for your Chick Fil A sauce so you can dip your nuggets in it.

Oh, my God.

That would be my primary, my first front runner.

Oh, my gosh.

Your car must smell good.

We covered, we covered, like, luxury car fragrances on one lightning round.

And now we're going in the exact opposite, opposite direction today.

Chris, thank you for enlightening us with this product.

Got you.

Yeah.

We've learned that Chris eats regularly at Portillo and Chick Fil A.

All right.

But I'm ashamed.

But I'm too ashamed to have the apps on my phone.

We won't get a discount on the product.

No, no, no.

Wants to tell thousands people that he doesn't know that's what he wants to do.

All right, Chris, back to you.

Southwest said yesterday that it will begin charging customers a check bag fee.

Hold the phone on that one.

Given this news rank order, you're now current three favorite US Airline carriers.

As a consultant, I think you probably have some great perspective on this question.

Yeah, this is like asking me what finger I want to cut off.

Like, no part of this is like an easy.

It's like they're all terrible.

It's the, the easiest is to go from the back forward, though.

Like, American dead last.

Just terrible.

I love, I actually enjoy flying Delta.

Delta and Alaska have to be my top two.

Alaska is probably number one, Delta's number two.

And American just has to be abysmally last.

Clearly, you're not going to be working with American anytime soon.

Or maybe you will.

Maybe they're in the last place and they need the most support.

The answer is clear.

It's Delta, Delta, and then Delta.

I'm in a deeply captive market here in Charlotte, and an American knows it and just, it's not a good experience.

We, and I ride or die with Delta, too.

Alaska is a good.

Is a good.

It's a good grab, though.

I, I, I, I, I can't remember the last time I flew Alaska.

It just doesn't hit the routes that Ed and I frequent all that often.

But, yeah, you gotta be out on the west coast for that one.

The Minnesota Delta Terminal's nice.

Yeah.

Oh, they put a golf simulator in there.

That's.

That's really cool.

I had not heard that.

Ann.

I'm sure that.

I'm sure you probably were aware of that.

No, Anne wasn't aware of that either.

Wow.

No golf simulations.

All right, well, have to check out the Minnesota airport again, which I will do in a couple weeks on our way to Shop Talk.

All right, that concludes today's show.

Happy birthday today to Titus Welliver, Liza Minnelli, and to the man who will always be known as Jonesy.

To me from the Hunt from for Red October, the vastly underappreciated Courtney B.

Vance.

And remember, if you can only read or listen to one retail blog in the business, Make It Omn, the only retail media outlet run by two former executives from a current top 10 US retailer.

Our Fast Five podcast is the quickest, fastest rundown of all the week's top news.

And our daily newsletter, the Retail Daily Minute, tells you all you need to know each day to stay on top of your game as a retail executive and also regularly features special content that is exclusive to Ann and myself and that Ann and I take a heck of a lot of pride in doing just for you.

Thanks as as always, for listening in, please remember to like and leave us a review wherever you happen to listen to your podcast or on YouTube.

You can follow us today by simply going to YouTube.com omnitalkretail Dave, if people want to get in touch with you, you know, argue with you about app fatigue, pick the brains of your fellow A and M consumer and retail group consultants.

What's the best way for them to do that?

I will give you Chris's personal cell phone number.

No, I'm just kidding.

So the two best ways would be our website, Alvarez and alvarezmourasol-crg.com we are actively looking at emails and.

And our inbox there and then our LinkedIn page.

It's Alvarez and Marsal, Consumer and retail Group.

Those two would be the best places.

And if you want to reach out to Chris or I just.

Just say attention, Chris and David.

We'll get back to you immediately.

All right, wonderful.

Well, thank you both of you for joining us today.

And on behalf of all of us on Omnitok Retail, Anne and I will be back next week.

And until then, be careful out there.