Walmart Drones, Taco Bell Voice AI & Wayfair's Big Bet | Fast Five

Hello and welcome to this week's Omnitalk Retail Fast 5.

I'm Chris Walton.

I'm Shelley Hough.

And I am Chris Neeson.

And together, the three of us are going to break down all the top stories you need to know in retail from the past week.

Producer Ella.

Let's roll.

This week's episode.

The consumer desire for immediate delivery is only headed in one direction, and it's not slower.

The challenge isn't proving that robotics can pick groceries at this point.

It's proving that retailers can actually make money doing this.

I actually cannot go to a Dr. That doesn't use this anymore.

You can't just bolt on a new system to a bunch of existing processes and assume it's going to work.

I have not changed my mind.

I think it is like a perfect application for AI.

We've been overrun by rabbits Quarter of the show.

Quarter of the show.

Chris, Shelley Huff, you're back.

How have you been?

How are things at the interval?

Give us the four.

One one.

Doing well, Chris.

Enjoying summer, as I'm sure you are as well.

Things at the interval are great.

We're continuing to meet INCRED executives that are exploring what they want to do next.

And.

And it's been absolutely fulfilling and wonderful and all things are good.

Yeah.

And you travel as much as I do, too.

Are you back home in Arizona this week?

I'm actually spending my summer in La Jolla, so paddleboarding and hiking and enjoying some cooler temperatures than Scottsdale.

Oh, my God.

You got.

You're like 45 minutes away from me.

I'm sitting in Laguna beach looking out at the ocean after just getting done with the National Confectioners association meeting.

That's so random.

I didn't know that we could have.

Done that, this in person together if we could have.

Although it's really early.

It's really early.

All right.

And Chris Neeson, former executive at Target, Party City and Whole Foods, now heads up Peloton One Consulting and also brings you Real retail in Real time.

The retail in Real Time substack.

How are you doing, Chris?

I've been really good.

I've been watching a ton of World Cup.

Just got back from out east for a college orientation, so some big things in the future and got to spend a lot of time in stores out there, and I'm just glad to be here.

Yeah, yeah.

No fun fact for all you omnitok listeners out there.

Chris and I were reminiscing before we got the show started with producer Ella and Shelley.

Chris and I have known each other about as long as anyone professionally, like I remember.

I'll.

I'll tell the story.

I was at the Gap, I think it was like around 2,000, right, Chris?

2,000.

And, and I used to get these calls.

I was a distribution analyst for denim, and I'd get these calls on the phone and they'd be, they'd be these great messages and it'd say, hi, this is Chris Neeson from Mall of America.

I need some more easy fit antique jeans.

Can you send me 50 pairs?

And so he'd leave me these messages and I'd call him every once in a while.

We'd talk on the phone, catch up.

And then one day I happened to walk into a meeting at Target and this guy says, hey, I'm Chris Newson.

And I hear his voice, I'm like, oh, my God, that's Chris.

And it turns out, yep, it was him.

And we've been friends ever since.

And Chris, it's really cool to see you doing some, some amazing things.

What is the point of retail in real time too?

What was the origin of that, Chris?

Yeah, the origin for me has been, you know, there's a lot of stories in retail, but there's not that many from a point of view of someone that's actually on the sales floor.

Right.

So for me, I spend a ton of time walking stores.

I say I've walked thousands of stores in the last year alone and I'm not bumping up those numbers in any single way.

I truly spend time in stores almost every single day.

And it's bringing that perspective in a way that you don't see all that often.

Yeah, right, Right.

Yeah.

That's why, that's why I love having you on the show for the first time, you know, kind of, you know, breaking you in here because you've got the store management experience, you've got the space planning experience across multiple companies.

You're definitely a go to for me and also a very experienced retail operator.

All right, well, Shelley and Chris, I think we should get this show started.

And of course, this week's episode is brought to you with the help and support of the A and M consumer and retail group, Miracle Corso, Ocampo Capital and Valak.

In this week's Fast5, we've got news on Albertsons working to scale a new AI powered merchandise intelligence platform.

Walmart building out its drone delivery capabilities across Houston.

Taco bell scaling voice AI drive thru ordering to almost 900 stores.

Wayfair betting big on massive physical stores.

And Caitlin Allen, the SVP of Market at Simbi or also stops by for five insightful minutes to discuss the range of heretofore unavailable insights.

And now available from On Shelf availability data.

You're going to want to stick around and hear that one, but we begin today with big news on the E Groceries front.

Headline number one is of course brought to you with the help and support of the A and M Consumer and Retail Group.

The A and M Consumer and Retail Group is a management consulting firm that tackles the most complex challenges and advances its clients, people and communities toward their maximum potential.

CRG brings the experienced tools and operator like pragmatism to help retailers and consumer products companies be on the right side of disruption.

All right, Chris Shelley, here we go.

Number one.

According to multiple sources, Ocado co founder and CEO Tim Steiner announced he will step down at the start of the company's 2028 financial year, capping a boardroom tussle over the future of the automated grocery fulfillment pioneer.

Ocado announced July 6 that Steiner, who co founded the company in 2000, will remain CEO through the 2020 year and into the succession process, which is expected to wrap up by the start of fiscal year 2028.

Wow.

He'll then move into a quote founder advisory role through 2029.

Reports indicate chair Adam Warby and board member Jorn Rousing pushed to accelerate Steiner's exit.

Yeah, I can imagine.

Following a prolonged share price slump, triggering pushback from other shareholders who wanted more continuity.

Ocado shares are down nearly 25% year to date and more than 90% off their pandemic era peak as its core business of licensing giant automated fulfillment centers to grocers has lost momentum.

Shelley, gonna start with you.

What do you think Steiner's exit says, if anything, about the future of automated grocery delivery?

Well, this is a big one and I like the fact that the board has a long off ramp for you do Tim Steiner.

He's an incredible founder and a visionary and an abrupt transition could create unnecessary risk, obviously.

At the same time, boards have relatively few levers when the business isn't performing and so replacing a CEO is one of them.

So I think that there's obviously some things happening within this business that has prompted this transition.

But I want to decouple that from what's happening with automated grocery fulfillment.

I think it's we're actually having two different conversations here.

So I think automation is absolutely part of grocery future.

It's one lever and I think the industry is learning there's not one fulfillment model that actually works.

It's a combination of them.

And I think Ocado solved a huge engineering problem.

I think whether that technology can translate into an economic position for its retail partners is the big question.

So I think a few key customers pulling back like Kroger doesn't necessarily mean the technology failed, but it does mean there's an economic question that's happening and potentially that Ocado was really early where there's not necessarily the density to support the business.

When you have huge investments in facilities like this that may be operating at 60% capacity, for instance, that's an economic drain and an economic killer.

And so I think, you know, automated fulfillment, again, I think, has a future.

I think it's what is the size of the facility, what is the density of population, the use case?

All of those things, you know, come into the conversation when we talk about these things.

But I absolutely think it has a place.

So the challenge isn't proving that robotics can pick groceries at this point.

It's proving that retailers can actually make money doing this.

Yeah.

And that they have the demand to utilize the capital to the extent that is required, too.

Right.

That.

Which.

That being a key piece of the, of the, of the Kroger situation, too, from my understanding.

Shelly, I want to go back to something you said at the beginning, though.

You said you.

You like the long off ramp.

Is that because Tim Steiner is.

I mean, he's been there 26 years, give or take.

I think that's the right math.

But is that because, you know, he's such a.

Such an important piece of that organization culturally, that it's going to be hard to replace it so quickly?

Is that why you like the lengthy succession plan here?

I do.

I think it shows a level of thoughtfulness with the board because basically it's giving him an off ramp that says, here's how long we'd like you to stay in the business.

And he probably was part of this conversation, obviously, in terms of what his willingnesses.

And it also ensures some continuity within the organization.

And Tim is a visionary leader.

It's.

It's going to be very difficult to replace somebody like that culturally.

He's built this business, and so I think it gives them time to potentially find somebody who is operationally the person to take the business to the next level and, you know, is a commercial leader that could potentially come in and build, you know, bigger relationships, bigger B2B relationships.

But I absolutely think that that shows some.

Some patience and some thoughtfulness into how this organization has transitioned and gives them time to, to really do a proper search globally for the right person to come in and lead this business.

Yeah, it's going to be a tough task for whoever comes in to replace them.

You know, I almost wondered too, Shelly, as you're talking, like, do we get into like a Steve Jobsian situation here too, where we see Tim start, you know, come back at some point in time because yeah, maybe they just need a change in leadership right now.

But you never know.

You know where things are going to go.

Particularly as you described and discussed the evolution of automation in grocery too.

Because I think, I mean, I know you and I believe, and I think Chris thinks.

I'm curious to see what Chris thinks too.

It's not like that conversation is really dead.

It's going to happen at some time.

We just got to get everything right and figure it out.

But Chris, what's your take on this situation?

So I'm starting with a story from a visit that I had last week to Boston.

Okay.

Walking the streets of Boston and I saw a food delivery robot on a busy sidewalk.

Okay.

And most people were navigating it incredibly fine until I saw an old man on his phone almost fall to the ground.

The point that I start with is that this is genuinely hard.

First mile to last mile, real time inventory, logistics, you name it.

On top of that, yeah, there's a huge investment here.

And I think what we're starting to learn is that the store network is beginning to prove itself in a way that the large fulfillment centers have not yet done.

From a volume perspective, you think about speed, density and the built in labor, there's a lot of things there that are hard to beat.

And we're talking about an environment right now where organizations are really thinking about where they place their bets from an investment standpoint, AI is there, but there's also a lot of sure bets when it comes to return on investment things like store remodels and other things.

So what I would say is we're a lot further away from automated grocery delivering at the at scale than we've been told for years.

Okay, interesting.

What makes you say that?

Like why?

Just because it's harder than we think?

Yeah, I think it's not only harder, but I think it's a huge expense.

Right.

And so when organizations are thinking about where do I get the most return on my investment?

And right now it's not in these large fulfillment centers.

Right.

Stores are underutilized when it comes to delivering grocery.

Yeah, right.

That and that I, I think you're hitting on something too, which is if you had to, if you had to place your bets in terms of the, the timeline by which this rolls out, particularly here in the United States, you're gonna see more people go to the store fulfilled model.

They're gonna optimize their pick rates in the store first before they start investing in the technology.

But meanwhile though, I think we have to keep in mind Amazon is on the other side of this equation where they're going in the opposite direction because they don't have the stores and they're putting those micro fulfillment centers and they're putting automation into them.

So the last thing I'll say here before we move on, this has been a great discussion.

Wow, what a great discussion.

To start out the show, I've interviewed Tim twice in the last year.

I've been lucky enough to interview him twice.

Once at Grocery shop, once at wrc.

And every time I sit and listen to him, I just think, my God, I'm talking to an icon.

This guy knows so much about things and he always leaves me with something that I had never thought about before.

And the one point I just want to mention to everyone because it kind of goes into what both Chris and Shelley have both been saying is I asked him on stage at Grocery Shop, I said, what's your one prediction for the industry in the next 10 years?

And he said, he predicts there will be a day in the future in which E Groceries is the most profitable way to run a grocery operation.

It'll be more profitable than stores.

And so if he's right, a lot of people thought he was crazy.

Like people in the audience were like, you're nuts.

But if he's right, what's it going to take to get there and what does that mean for the industry?

So that's something I just love thinking about.

All right, let's keep rolling.

Headline number two.

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Headline number two.

Albertsons is working to scale a new AI powered merchandise intelligence platform built on databricks with a goal of fully deploying it to merchants by the end of 2026.

Chris, get ready for this because I'm going to you first on this one.

No doub.

According to Grocery Dive, the platform is designed to bring pricing, promotions, product and placement decisions into a single space, replacing a patchwork of tools merchants had previously relied on.

It's built on Databricks Lakehouse for clean retail data governed through Databricks Unity Catalog and AI Gateway and topped with Databricks AI Agent Genie which lets merchants query the platform in natural language.

And if you had databricks three times on your bingo card, you win today.

Karthik Iyer, Albertson's Group VP of Merchandising Transformation Nai, said the goal is training on years of clean transaction data like pricing trends between different Apple varieties to give merchants forward looking scenario based guidance like for example, how a dry summer might affect ice cream sales and shelf space.

Chris Neeson what's your prediction here?

Albertson says it's rebuilding how its merchants think using AI.

Is this the kind of AI investment that actually changes on the ground decision making, or will it ultimately become another expensive layer that sits atop the same old merchandising processes?

I think this can absolutely change decision making.

Okay, this isn't guaranteed and here's why.

Bringing pricing, promotion, product placement into one environment is absolutely the right move and sounds great.

One other thing I really liked about this article was the fact that they brought in the merchants and store operators to actually help build this versus buying something off the shelf.

Because you know that adoption is going to be a huge challenge here when it comes to how this is utilized in the organization.

The other thing I'd note though is who else was in that room?

There's a lot of other cross functional partners that come into these conversations and these decisions.

Marketing space planning, category management.

You can name cross functional partners that need to be part of this process and I'm not certain they were.

Hopefully they were.

Plus 10 more too probably that you haven't even named yet, right?

Yeah.

And so here's why I have a bit of concern as to how this actually happens.

Adoption is the first thing that I would call out.

We've all been part of organizations where there's been consolidation efforts with new systems, tools or dashboards were rolled out.

And yet what is the one thing that you probably saw in those same organizations?

There were teams or individuals that continued to use their own spreadsheets, their own processes because they work in very different ways.

And so that comes down to training and change management.

Like how does Elliburts ensure that the AI platform is used effectively and the hard work being done to rethink the entire processes around it?

Like you can't just bolt on a new system to a bunch of existing processes and assume it's going to work.

You really have to put in the hard work to rethink the entire process and embed this in a way in the organization that can seamlessly allow you to make decisions that actually make it to the floor.

Yeah, yeah, I'm, that's, that.

Yeah.

Those are really great points, Chris.

Like, I'm, I, I, I deliberately want to go to you first because I think if I was to ask anyone what they thought about this headline, I'd probably call you and be like, what do you think?

Because I think it's really hard to do this.

Like, I'm actually, I'm probably even more skeptical of it than you are in terms of how you just couch that, because, One, I think it's really hard to do.

Two, but here's the thing for me, and this is why I started Omnitalk, too.

The use cases dropped in the press release.

And, Shelly, I think you're gonna, I'm guessing you're gonna agree with me on this one, because I can see you smiling in the background already.

The use cases dropped in this press release.

How a dry summer might affect ice cream and shelf space.

That is such bs.

I mean, come on.

Ice cream is in freezers, which are the most immovable store fixtures out there.

It's also dsd, so there's, like, very little impact that you're going to have anyway, and they can, you can reallocate the shelf space as simply as possible.

So if those are really the use cases, I think it's doa.

But the one caveat I would say is I don't think those are the real use cases.

Those are not why you're doing this.

The real use cases are the use cases no one wants to talk about.

But, Shelley, what do you think?

I 100% agree.

The use case aside, did not inspire confidence that they are building this for what really, merchants need to know in terms of this.

If you're using AI in merchandising, merchants have traditionally, I'll just say this.

We're always trying to predict the future.

That is our job.

We are trying to predict the future.

So if this technology is not helping you predict the future with big, huge questions that are going to move the needle on your P and L, then you're not building the system in the right way.

So while there were several things that, like, sounded great in this press release, like, we're using data bricks and we want clean data, and we want to inform our merchants of this, it's absolutely the deployment here that I would say Is.

And are they asking even the right questions?

Are they building this so that they're asking the right questions?

At the end of the day, this should raise the floor for every merchant.

But it's going to be the great merchants that use technology like this to raise the ceiling and to really dive deeper into how they can drive their category performance.

And so for me, this comes down to the fact that the skill set of the merchant might evolve.

If this is actually, you know, technology that's going to be adopted and used by Albertsons, they're still going to need people with exceptional judgment, exceptional curiosity, because those are the folks that are going to outperform if.

If we're relying on the same type of talent and skill set to, you know, leverage this technology.

I think there's a different conversation.

So I think there's a talent conversation alongside an AI conversation.

That makes sense here.

But the press release based on the quotes that came out, it's like it all sounds good until you start talking about what you're actually imagining it to do.

And then that's where I lost confidence as well.

Yeah, right, right, yeah.

It made me think of like all those things when AI search was first coming out, like all the things you could do with AI search on your website that no one's actually going to do.

But that sound cool.

But Chris, what do you think?

Last word here.

Yeah, one last thing.

Back to your ice cream example.

The other thing that I think this potentially does is actually creates a risk of paralysis, like the types of scenarios that you described and the amount of data that could be coming their way potentially actually slow down decision making.

Yeah, yeah, that got me thinking too.

Like, Shelly, I'm curious, you know, you being the former CEO of the group too, like, not all merchants think and learn in the same way too, or process information the same way.

So.

So how do you think about that from the executive chair in terms of these tools and these technologies?

Because in some ways it almost feels like we're trying to get all merchants to do their job the same way.

And I don't know that that's the best thing either, or maybe AI helps prevent that to some degree too.

But how do you think about that question before we move on?

So, as a leader, if I were leading merchandise teams today, my one on ones with my buying team would be just asking them how they're thinking about their business and what questions they're asking about their business.

Because that's how we coach people to be more curious and ask the bigger questions of what's going on.

And so it's actually shaping thinking.

And the more that we talk about that in large groups and model the way and show that example is how you really drive that transformation.

So for me, I think about it in a way of like, how can I prompt my team to continue to ask bigger questions?

Because they're not going to spend half their day, half their week pulling data together anymore.

They don't have to do that.

They can actually spend that time with tools like these, really asking bigger questions about customers and geography and weather and all of these different things that impact their category.

They can spend more time on supplier relationships.

They can spend more time looking at products.

And so that's where you really drive the team forward.

It's like, how are you spending your time now?

And what kind of questions are we asking?

And those questions can get so much bigger and better about customers now if you're not spending your time on all the manual data gathering.

Right.

The other point it makes me think about too.

And then we'll move on to the third headline is like is you know it?

Also this, this headline also, when you dig, dig into it as we have also highlights the divide still between digital merchandising and in store merchandising.

And a lot of what's being talked about here are store merchandising actions.

But in reality those actions are better placed in the digital online world, which is something that Albertsons probably gets to a degree but doesn't understand as well as Amazon and AI's applicability to run everything in that way.

To react to the to do what needs to be done in terms of inventory placement and reacting in season is so much easier and so much more fluid in the online space.

But bringing that into the real world has some real issues and dependencies.

So headline number three, Headline number three is brought to you by Corso.

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All right, headline number three.

Walmart is expanding its drone delivery footprint in Greater Houston, adding eight new hubs and bringing its total to 13 nests.

That's a quote.

Nest with Wing, making the service available to more than 1 million area consumers.

Actually like that phrase nest.

That's kind of cool for a drone.

According to Chainstorage, Wing, owned by Google, parent Alphabet confirmed the expansion with Nest now located In Houston, Houston, Spring, New Caney Crosby, Katy and Kemah, Texas.

Hope I got all those pronunciations correctly.

Walmart launched drone delivery in Greater Houston in January 2026 and said it plans to expand ultra fast drone service to an additional 150 stores over the next year, building toward a network of more than 270 drone delivery locations by 2027.

Shelly, Walmart keeps adding drone hubs faster than I can say cowboy boots, particularly in Texas.

Is all the hype surrounding drone delivery real or do you think Walmart is getting ahead of itself?

You're the perfect one to answer this question.

This is just absolutely awesome.

To me.

This isn't a drone story, it's a fulfillment story.

This is, you know, Walmart is essentially answering a need for, you know, faster delivery on emergency items.

And so they're turning what used to be a 30 minute trip to Walgreens or CVS into a 5 minute decision where somebody can, you know, essentially, you know, get batteries or, you know, something for their baby super fast.

I mean, this, when you think about the use cases for this, it's like new parents are like the perfect customer for a drone delivery model.

So, so to me, this isn't a drone story, it's a fulfillment story.

It's one tool in the toolkit of Walmart.

The other thing that I would offer here is that Walmart is no longer piloting.

They are scaling.

And so that means they have all the data to essentially say this is working.

There are proven use cases for this.

We're scaling it.

It's no longer a pilot.

This is part of our Future fulfillment plan.

100%.

It's like Maverick told Goose.

I feel the need for speed because that's what it is.

It's about speed.

It's about the brick meets click data that we talked about on a recent show.

10% Of all shipped to homeowners are now ultra fast in under one hour or less.

That's what this is about to me.

But, but Chris, I'm curious, like, you kind of poo pooed the delivery robots.

What, what are your thoughts on drones here?

Like, are you thinking this is more hype than reality?

Well, I hate to disappoint you, but I'm actually going to agree wholeheartedly.

What you what with everything that you've both just said.

Wow.

Like, I don't think Walmart is getting ahead of themselves in any single way.

Like, the consumer desire for immediate delivery is only headed in one direction and it's not slower.

Like they want to have their stuff when they want to have it.

So, you know, 1 million drone deliveries by May.

Like, that's not a test anymore.

That tells me that they're in this for the long term.

Like, they continue to expand their use cases from, you know, important things that Shelley was talking about to things like missing pizza toppings for family pizza night, which is a bit interesting and maybe a bit far fetched, but at the same time, it's the reality, right?

We're all thinking about that thing that we missed on our last trip, and we're figuring out, how do we get this as quickly and as easily as possible.

What I think is interesting about this in the longer term is the actual role that this has for the physical store.

At the end of the day, this does mean fewer routine trips to stores.

And to me, that means that the stores have to work harder as a destination.

And I'm actually all for that.

You know, say more.

Why?

I'm all for that because, you know, at the end of the day, like, I see a lot of stores where the standards have dropped, the experience has dropped.

And if every retailer is fighting for those customers, it means that they have to work harder and they have to present themselves in a way that they're not today.

The one call out that I'd have that's a bit unique from the story is, you know, they talk about a lot of these packages being dropped into yards or driveways.

And so I'll be interested to see how that plays out.

And I wish I had that experience here, because if you're anything like me and in my neighborhood, we've been overrun by rabbits, and I'm a bit concerned that my packages will go missing because of those rabbits.

We're no longer talking about porch pirates.

We've been overrun by rabbits.

Quote of the show, quarter of the show, Chris.

Oh, my God, that's so great.

Yeah.

And the one caveat I have about this story is I'm shocked to hear that.

It's really great to hear that we're all aligned on this too, because.

Well, first of all, I talked about this at the NCAA meeting yesterday, and it was the one point in my speech where I was like, I don't know that the audience is buying what I'm throwing down.

So it's good to hear you guys are validating my thought process to some degree.

But the one caveat I have about it is it's still Texas, right?

Like, I want to see them talking about this more loudly outside of Texas.

Like, I think, Shelby, like, your neck of the woods, Phoenix is where it's supposedly coming very soon if isn't already in pilot, you know, stage of operation.

So maybe Shelly, we'll need to have you shoot a video for us, for all of us at Omnitok of how that works.

But, but I think this is dead, right?

I mean, I think what the, the other high level strategic thing here is what does for strategically for Walmart.

Yes, it gets their current assortment faster, but it gets them into QSR delivery like we talked about with Subway.

It gets them into the convenience store business as well.

Those are both that provides two outlets for Walmart.

Those are bigger businesses for Walmart that they're not currently in.

And then the second piece as well is it keeps you and this, Chris, what you were saying, it keeps you sticky with the Walmart experience.

It keeps you coming back to the app, it keeps you engaged as a Walmart plus member over and over again.

And in a world where Walmart is having the battle for consumers time with Google OpenAI, Amazon getting that foothold in there and giving some reason for people to keep coming back over and over again really, really matters.

All right, let's welcome Caitlin onto today's show.

Joining us now for five insightful minutes is Kaitlyn Allen.

Kaitlyn is the SVP of market at Simbi and Caitlin is here to discuss how shelf intelligence can give retailers a key insight into more than they would ever expect.

All right, Caitlin, let's start with this.

Simbi just released its latest edition of the Simbi Index, diving deeper into back to school shopping trends.

What is this Simbi Index, first of all?

And what are the shelves actually telling us about the season that is upon us, that being back to school?

Well, thanks for having me, Chris.

So I actually think the interesting, the most interesting part is not about back to school, but what shelves are telling.

Us about retail as a whole.

So to answer your question, the Simbi Index is essentially a real time pulse check on physical retail.

And it's built from more than 45 billion images from the shelf that are captured across retailers around the world in almost a dozen countries.

And instead of looking after the fact that what's been sold, it shows what's actually happening on the shelf while shoppers are making decisions.

And I think we could all agree that the shelf is the final delivery point of the entire retail ecosystem.

And last year what we found out was that tariff concerns pulled demand way forward.

Nearly three quarters of shoppers started earlier because they were worried about future price increases and refill rates declined.

So store stores last year were able to replenish only 30% of empty shelves in early July, compared to 46% the year before.

And as you can imagine, out of stocks climbed as the season progressed.

So this year, obviously, inflation is continuing and Amazon Prime Prime Day was pulled forward and effectively kicked the season off even earlier.

So we're starting to see that many shoppers are moving into back to school buying much earlier in July instead of waiting.

And what this tells us is that effectively, retail is becoming less driven by forecasts and is really shaped by real time reality.

And winning in that context means knowing exactly what's happening on the shelves minute by minute.

Wow.

That's, that's, that's an angle that I never have ever, ever even thought about.

I got to think the financial community is going to love that too, because what, you know, what you're saying is you can see the behavior of, of the consumers in real time and the ability of the retailer to react to that macroeconomic influence on the consumer.

So that's crazy, Caitlin.

All right, so you know, tariffs keep coming up as a factor.

You know, we hear it here, it's impacting shopper behavior all the time.

Like go into that a little bit more for us.

So where are you actually seeing the pressure show up on shelves?

It's in different places where supply chains are under the most pressure, Chris.

So last year the early signal showed up in high import categories like apparel and footwear and school supplies and outdoor recreation.

And so commodity items like pens and pencils saw out of stocks climb more than 50% and footyear footwear was up 17% year over year.

And you know, to me, the points, not so much about tariffs, macroeconomics are arguably always going to happen, whether it's tariffs, inflation, you know, what have you.

What matters is understanding where those pressure pressures are showing up on the shelf early enough so that stores can respond rather than discover that they are, you know, they've been behind weeks after the fact.

And so this year we're obviously watching things like apparel and footwear and electronics closely.

And I think, you know, the categories that will likely be the canary in the coal mine, so to speak, are, is, are the ones that are going to be impacted by another volatile back to school season that's influenced by the supply chain.

Right.

And right.

And how quickly can the retailers can actually react?

So you know, given what you just said, what does that tell our audience about where retail operations are potentially breaking down, if anywhere?

Yeah, I mean, having eyes into what's happening at the point of customer decision is what matters.

And I Said this earlier.

Every forecast, every purchase order, every distribution decision, it ultimately has to show up on the shelf.

Right.

Like when a shopper reaches for that item or orders it online.

And the problem is that despite billions that have been invested in digitizing our supply chain, the shelf's historically been the least visible part of it.

And you know, in store efficiencies, according to a new research report from Coresight show that, that about $200 billion are lost every year to these inefficiencies.

And you know, the data or the transactional data that we've done a lot to try to capture is important, but so is, and maybe even more so is the observational data that gives us a reliable view into what's actually happening on shelves and in our stores.

So, you know, talking about order fulfillment breaking down, it's, you know, it's sexy to think about like, oh my Alexa could talk to my smart fridge and order my groceries for me.

That's not going to work if Alexa and your smart fridge are ordering groceries for you, but then the things that the grocery thinks are on the shelves actually aren't there.

Right, Right.

Yeah.

And the merchant and the retailer in me too, like, thinks about, like when I'm, if I'm, if I've got this type of data and I'm looking at it longitudinally, year over year, there's actually new inventory metrics that come into play too.

Like I could actually think about like, what is my time?

How long are my outs on shelf this year relative to last year?

Like, how long did it take me to replenish or refill an out and am I getting better at that or is it getting worse?

And that should signal categorically where I have issues and direct my supply chain team to fix them.

So I'm curious, Caitlin, you mentioned the core site.

You know, they've also said that technology investments at an all time high.

So you know, why, if that's the case, like, why are we still seeing these issues then?

Yeah, it's such a good question.

And I think the siren song is that more technology automatically leads to better outcomes.

What the report effectively found is that retailers are involving or investing in the right technologies just in the wrong sequence.

Like you, you have to have shelf data as the foundation for other store technology to produce the ROI that the, that the business cases that are put together predict.

And so the Coresight report stance effectively is that the retailers that are winning with technology have flipped the sequence and they invest in shelf digitization first and then everything thereafter produces the ROI that's intended because of that initial investment.

Wow, this is, this is great stuff.

All right, so if so, let's say, let's say I'm a retailer and I get that sequencing, right?

Then what does the payoff actually look like, Caitlin, to you?

Yeah, I mean, it starts with better execution, Chris.

And like, of course it also impacts sales and margin.

But why?

What it really impacts is why retail exists in the first place, which is serving the shopper and empowering the associates.

So, you know, measurable results that we've seen across our client base.

Schnooks has reduced out of addressable out of stocks by 30%.

BJ's has improved picking efficiency by 40%.

B&R Stores has given associates up to 30 hours back a week to focus on shoppers.

But I think the bigger story is that what retailers are building is a trusted source of truth for them to work better with their partners to serve the people that they care about in their ecosystems.

Yeah, I love the inclusion of the employees in there.

That's really good stuff.

All right, well, thank you, Caitlin.

That was really insightful.

Thank you, Chris.

Always good to be with you.

Headline number four is brought to you by Ocampo Capital.

Ocampo is a venture capital firm founded by retail executives with the aim of helping early stage consumer businesses succeed through investment and operational support.

Learn more@ocampo capital.com headline number four.

Taco Bell is deepening its rollout of Omelia's voice AI platform at Drive thru locations now live at more than 890 US restaurants across 38 states, according to Chainstore Age.

Taco Bell began rolling out the Amelia Voice AI solution in 2023 and has scaled it to now nearly 900 restaurants.

The platform uses proprietary small language models tuned for the noisy, fast paced acoustics of the drive thru lane and adapts in real time to each location's menu, stock levels and limited time offers.

Taco Bell says the system can handle slang, humor, mid order changes and complex customizations without scripted menus.

Or hallucination.

Or hallucination.

I can't say hallucinations.

Hallucinations.

Thank you very much.

And it's integrated with Yum Brands proprietary posited POS system and the Taco Bell Rewards loyalty program.

Taco Bell reports drive through transaction times with Voice are on par with or faster than traditional order taking, higher employee retention at AI enabled locations and customer satisfaction complete rates at parity or better than non AI storage.

Chris Neeson, Shelly and I have talked about Voice AI ordering at the Drive Thru in the past with Dairy Queen's announcements.

And Taco Bell now says that it too is approaching 900 stores.

Is this proof that technology has crossed the chasm in QSR?

Or is nearly 900 out of tens of thousands of yum locations still a rounding air that should encourage a wait and see approach from others.

What is your take?

I caught your earlier Dairy Queen conversation.

It was clear, Chris, that you had an awesome experience.

And I remember Shelley saying that it was the perfect application of AI.

And I'd have to say that's hard to argue with.

So onto your question about crossing the chasm.

You know they had 100 stores in 13 states by mid 2024.

We're not talking about nearly 900 stores across 38 states roughly two years later.

Yeah, I read that as a methodical rollout, not a chasm crossing.

And I actually mean that as a compliment.

Yeah.

As you read this press release, you know that there are things that are working well and there are other things that they're still trying to figure out.

They talk about faster than traditional order taking sometimes.

They don't say that this happens all the time.

They do talk about higher retention rate.

They talk about things like that.

So you know that there's a foundation that they're building upon here, but they understand that there's things that they still need to improve.

So I understand that.

I look at this and I say they're working to make sure that they do this smartly, not as quickly as possible.

The thing that I'd want to focus on is what this actually means for the in store experience and why I think it's the right thing to do.

My experience has been drive thru orders often seem to take priority over that in store experience.

Even people coming in to pick up an order that they might have placed through the app seem to take a priority and it detracts from that in store experience, whether that be service, cleanliness, heck, maybe even a clean restroom.

Like I think this is the right thing to do and the right approach to take to do it at the right pace to make sure that you get it right.

Because their press release doesn't say that they're always delivering faster, they're always taking orders faster.

And so I think it's the right approach to move at the pace that they're doing.

It's going to be a win in the long run.

It's already proving to see some benefits.

But why not do it right when you do roll it out to your entire chain?

All right.

You continue to surprise me on this podcast.

So you're saying not.

We haven't crossed the chasm yet, but you like the application and the use case for its deployment.

Okay, Shelley, I'm curious, have you refined your thinking since we last talked about this with Dairy Queen?

Because I got a whole host of nasty grabs on that last one about being a proponent of AI voice ordering at the drive thru.

Yes, it's a very emotional conversation.

I have not changed my mind.

I think it is like a per.

A perfect application for AI.

I think what's interesting about this, and this is what Chris just hit on, is with Dairy Queen.

Dairy Queen, we were kind of surprised.

We were kind of like, wow, they're deploying AI like, faster than a lot of other, you know, franchises or restaurants.

What Chris is bringing up is the main point here is that yum just does things really well and when they do something, they do it really well and they're measured about it and they hire great people and they have great performance and they know their customers really well.

So when they deploy something, it's very thoughtful.

They are worried about.

This isn't about technology.

This is about customer experience, end to end.

And so I just think this is fantastic.

And I think actually they're going to leverage the technology and use the learnings to perfect this over time.

And so I think Chris's point is fantastic.

It's like, this is a really great organization, deploying technology in a really great way.

And I think that we're going to continue to learn a lot from them and from the technology.

Yes.

The word I pulled out from what Chris said was like, it's the pragmatic approach.

And it seems like it's a smart, pragmatic approach.

That's the word I'd use to encapsulate it all.

The one thing I'd add here, just in closing on this topic, would be, I actually cannot go to a drive thru that doesn't use this anymore.

I had to go to one recently.

I think it was Dave's Hot Chicken.

And the experience was so horrible because I can't.

I don't know if it's just I'm getting old or what.

I can't hear what they're saying.

And so it's like, and I won't go, I won't use it again.

I force my kids to go into the restaurant, which is, you know, probably to Chris's point, somewhat, probably a good thing, depending on how you want to look at it.

But it's more expensive to operate that in some ways too.

So, so like for me it's an innovation that can't come fast enough.

And the thing that I do love about it though too, and Shelly, you and I talked about this with the Dairy Queen story too, is they are actively talking about and Chris, you mentioned as well, they're actively talking about how it makes employees jobs better because they're not having to deal with as many angry customers at the drive through.

Right.

And it's and that's important.

I think that's an important factor here that oftentimes gets over, that gets overlooked in these stories.

Although they're probably having to deal with people to get frustrated with the AI too.

So who knows.

All right, headline number five.

Headline number five is brought to you by Veloc.

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They unite proprietary software with right size automation to make same day delivery profitable.

To learn more, visit Veloc.com that's V E L O Q.com all right, I saved the best one for last.

Potentially.

Wayfair, a company that built its entire business online, is making a big bet on massive physical stores, planning a large showroom in Denver by year end, followed by Cincinnati, Yonkers, Fort Lauderdale and Princeton in 2027, according to a big write up in Bloomberg this last week, which is why we're covering this story.

Wayfair CFO Kate Gulver said the furniture category is cyclical and Wayfair wants to quote meat shoppers wherever they are, end quote once spending rebounds.

And even as high mortgage rates and weak home improvement spending have hit furniture sales broadly, the new locations add to existing flagship stores in Chicago, Atlanta and Columbus, Ohio, and follow the company's first large format store in Wilmette, Illinois in 2024.

Unlike most retailers, Wayfair stacks its showroom floors with inventory still owned by its 20,000 global suppliers, a model that reduces upfront inventory risk and makes the store expansion more capital flexible.

Roughly 75% of home furnishings transactions still happen in physical retail industry wide and Wayfair's own data shows markets with stores outperforming national growth rates.

Shelley, as the former Serta Simmons CEO, what's your take on Wayfair getting into larger physical stores?

Are you long or short on this being a successful strategy?

I think this is a really smart move for Wayfair and something that they've also been very measured about.

I remember competing against them when I led home for Walmart.com and really studying how they went to market.

And the furniture business is tough right now.

And it's a high consideration category.

Folks think a lot about it before, you know, they make a purchase.

There's a famous quote that's like, if you buy a good piece of furniture, you only cry once.

So, you know, this is a high consideration set category.

And so I think physical stores help consumers in so many ways because you get overwhelmed with the assortment.

Online stores help narrow that assortment into key items that are probably, you know, really transitional from a taste level standpoint and fit into most people's homes.

You know, Wayfair has experimented a long time like they were doing pop ups in Natick like 10 years ago.

They experimented with like different retail formats over time.

And I think they're kind of hitting their stride there in terms of being really thoughtful in big markets and really measured in terms of the approach.

I think the inventory model is excellent.

They're not spending a ton of money on inventory to stock these stores.

And so I think that this is an omnichannel retail story.

I think the store showrooming helps make online more productive.

The customer acquisition costs are probably lower.

And I think this makes Wayfair more profitable over time and also helps their brand reach ultimately with consumers.

Right, right, right.

So do you like the fact that the stores are bigger too?

Like, do you think that they're large showrooms?

Does that impact your assessment of this, of this headline at all?

It is.

I like the fact that they're bigger.

But when you think about the Wayfair assortment, it's still like the tip of the speaker in terms of what they offer.

And so we can say they're.

I, I think when you're shopping for furniture, you want to see a lot because you want to feel like you see a lot.

If you think about the, the psychology about it, it.

Right.

It's like I want to know that I saw everything and I picked the perfect thing for me because I'm spending a lot of money on it.

And so, and so I, I think with.

Within the Wayfair environment, it's still very tip of the spear in terms of this is their absolute best assortment.

But it's, but it's almost a requirement when you're shopping for home furnishings in a physical location.

You want to see assortment.

That's why the Natick mall thing never really, you know, wedded my whistle.

And I told, I told the CEO that in 2017, I was like, you got to go big.

And he laughed in my face, which I've told that story 100 times on this show.

But now here he is going big.

So I think I've talked about this.

I like this strategy a lot.

And Shelley, I forgot that we were dueling competitors between Target and Walmart two at a time.

That's crazy.

All right, Chris, what, what, what's your take here?

Do you like this because you've been in more, like you said at the outset, you've been in more stores.

Kudos to you than anyone I know.

And I'm curious what you think here.

Do you think Wafer's got a whole.

Got it in here?

The stores themselves are fantastic.

Like, they're done well, they're marketed well, they're easy to navigate.

And to jelly's point, like they present product to a customer that potentially is not familiar with their product.

Like 75% of home furnishings still happening.

Those purchases happening in person is not something to sneeze at.

And so there's a need for them to have a physical presence.

I think Shelley used a really good word when she was talking about this and that was the word measured.

I still have concerns about the financial Runway here and the risk that this presents in the near term.

You know, the article itself talks about that.

There's no real clarity on when consumers are actually going to begin to be comfortable making these types of purchases again at the rate that they had in the past.

And so, yes, Wayfair needs to meet them where they are.

I agree that physical stores is the way to do that.

I just say that they have to be as measured and disciplined as possible in how they do that because we don't know if customers are going to be prepared to buy those big ticket items for their house six months from now, two years from now, longer than that.

And so you don't want to necessarily put that financial risk out there so far in advance of when the need is actually there.

I'd suggest that this is the right direction, but pace is everything to me.

Yep, yep.

Yeah.

And the one, the one thing I can say, the one saving grace with, with Wayfair too, is they're the most left brain run retail organization I've ever seen.

So they are probably pacing this out very judiciously.

It would be my hunch.

So I'm curious, I want to get your last take on this point too.

The other thing is when you think about large stores, they're going up against Ikea.

And so the one thing I've always posited is the great thing about Wayfair, like you said, it's just the Tip of the spear, their assortment when you have a large store like this.

And also it enables you to show a breadth of aesthetics and different items relative to what is the typical IKEA aesthetic.

Do you think that's also a factor here?

I think it's an advantage of Wayfair.

I think IKEA is one thing to people, and they've been tried and true in terms of what that is, and it works for them.

I think Wayfair has a lot more style than ikea.

I think they have, you know, they can reach different consumer esthetics, they can change it more easily.

And I think in a lot of cases, they can, you know, expose consumers to a broader assortment, even when they're shopping in stores.

So I think it's an advantage.

I think Wayfair actually hits a sweet spot here because they're also more favorable from a price standpoint than most big furniture stores.

And so there is this place for Wayfair where it's like, I don't want to buy furniture from Walmart, Target, IKEA is not near me, but I don't want to spend as much as going to an Ashley Furniture or even something like that.

And so I think that there, there's a sweet spot here for them where I think that they actually have, you know, a good market position.

But I, I agree with what Chris said.

It's like they're, they're rolling it out at a good pace where they can still learn and grow in a really smart way.

Yep.

Yep.

100.

Yeah.

And the other point you guys got me thinking about too, is like, you know, with their, with their drop ship marketplace model, you know, you could have the vendors participating in the store, showroom aspect of the furniture in a way that, you know, is not really potentially done across retail.

You know, really anywhere, you know, when you think about it.

So there's, there's a lot of cool angles to this story.

It's great to hear that we're all kind of pro Wayfairs store ambitions.

All right, let's go to the lightning round.

Chris Neeson Hasbro has launched Bloom looms by Play D'oh.

Yes.

A line of Play Doh geared specifically towards adults.

Chris, if you were to buy an adult Play Doh set, what would you most want to build?

I'm always going to be reaching for something a bit less messy.

Probably says a lot about how I ended up where I am in my career.

So give me the nearly 3 and a half foot replica Eiffel Tower I just saw at Roll Life.

Okay, awesome.

All Right.

Good call.

Good call.

Good, good.

Safe answer.

All right.

56% Of U.S. consumers recently surveyed by coupon follow say they have impulsively bought items on Amazon during late night hours.

Shelley, what was the last thing you remember purchasing late at night while doom scrolling?

I love this headline because I'd love to see all the data on what people.

Crazy, right?

For me, I.

Let's see, a few weeks ago, I bought five racerback tank tops and all different colors that arrived.

And when they arrived, I'm like, did I. I really need five different colors in this tank top?

But.

But those are the things.

But I like my late night shopping bills from Amazon way more than my Nordstrom ones.

So do you.

Okay.

All right, nice.

So are you a frequent late night shopper?

I sometimes get.

I'm a really good sleeper, so no, but occasionally I.

Occasionally I. I dabble.

You dabble.

You dabble.

You try it.

You try it out.

All right, Chris.

An outbreak of the parasite Cyclospora has risen to more than 3,000 cases in Michigan and Ohio, and the ongoing investigation suggests lettuce or salad greens may be the source.

Chris, have you curbed your fresh veg and produce intake at all in recent weeks in light of the news?

So maybe the lettuce gets an extra rinse.

But the outbreak concerns me a little less than it probably should.

Best buy dates have always been my thing really runs out and it's gone.

No second guessing.

So you're not drinking the milk after the day?

No doubt.

No doubt.

Never.

I'm the same way.

My wife's always like, it's fine.

I'm like, no, no, no, no, no, no, no.

We're not doing that.

We're not going there.

That will never happen for me.

Not in your household.

All right.

MLB All Star Game is in Philadelphia this week, doubling as the 250th birthday bash for the country.

Shelley, what's your pick for the best Americana food to eat at a ballpark?

Well, this is in Philly, so hopefully they have a cheesesteak around.

You know, you can't get much more American than a Philly cheesesteak.

That's right.

Great answer.

I was.

I couldn't get my head off the hot dog.

I was like, where are you gonna go with this one?

I was like, should I even ask that question?

But that guy.

That's a great answer.

All right, today's podcast was produced with the help and support, of course, of producer Ella.

Ella Siri.

Ella, come on in here.

Tell us which headline won the week for you.

This was, this was such a great show.

God, this is one of my favorite shows of recent times.

Times.

Ella, what'd you think?

Yeah, I agree, Chris.

Great show.

This one's a no brainer for me.

And I wish we had Jen Hahn on to talk about Taco Bell.

Taco Bell wins this week.

I feel like we've talked about voice AI, obviously Shelly with Dairy Queen, but also just in general and I don't find this all that novel anymore.

I mean, we talked to Siri, we talked to ChatGPT.

We, we talked to so many things.

So for me, if this is going to make it a better experience and I don't have to redo my question, that's my main thing.

I don't want to like, re say something.

And my other point is if I want to get in contact with a human, is that going to be easy?

That's such a great point, Ella.

Like, I never thought about that.

Like, yes, we have a lot of experience talking to these types of, these in these types of scenarios.

Like, I never, I didn't even enter our discussion before and you know, it comes on the heels too of just this.

This morning, literally, literally, I saw an announcement that OpenAI is going to create like what sounds effectively like an Alexa type device for the home to do exactly, exactly what you're saying.

So.

Wow, that's great perspective.

All right, well, let's wrap it up.

Happy birthday today to Forest Whitaker, Jim Rash, and to the last woman to play Helen of Troy, Diane Kruger.

And remember, if you can only read or listen to one retail blog in the business, make it Omnitoc.

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Thanks as always for listening in.

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Wherever you happen to listen to your podcast or on YouTube, you can follow us today by simply going to YouTube.com omnitalkretail Shelley if people, people want to get in touch with you after listening to this episode, what's the best way for them to do that?

Shelley S H E L L E y@the intervalcommunity.com LinkedIn hellyhuff or @instagram Huff.

Shelley awesome.

Awesome.

Chris, same question to you.

LinkedIn is the easiest.

Chris Neeson.

Look me up.

Yes.

And it's N, I, E S E N. I have to look that up.

Even.

Even though I've known him for 26 years, I always have to look that up.

Make sure I'm doing it right.

Well, thank you both so much.

This was such a wonderful episode.

I really appreciate you taking the time out of your busy schedules to do this with us and to share your insights with our audience.

And so, until next week, on behalf of all of us at Omnitalk Retail, on behalf of producer Ella and myself, as always, be careful out there.