Walmart’s Agentic Welcome, Membership Bundles & David’s Bridal Says I Do to AI Spin-Off | Fast Five

Hello, I am Chris Walton and welcome to this week's OMNITALK Retail Fast 5, brought to you by the Omnitalk retail podcast network.

This week, AI shows up everywhere.

And by everywhere, I really do mean everywhere.

Every freaking where, in the shopping cart, in the hiring process and even walking down the aisle.

Walmart is opening the door to AI shopping agents in direct opposition to Amazon.

Gap is letting an AI recruiter handle the holiday hiring rush.

And David's Bridal wants to spin its AI wedding platform out as a public company.

And I for one, kind of like the idea.

Joining me to sort through it all is guest host Martin Bailey, a veteran retail operator who has run stores at Lidl Primark and Tesco, and also, I might add, has one hell of an Irish accent.

This is the omnitalk retail fast 5.

The greater good is winning the entire basket at any time, any place, anywhere, with any customer.

The best example for me is where would Gap be today without Old Navy?

I think it's an upsell,.

It's a bold bet,.

No fluff answer.

Walmart isn't selling a membership, it's buying the household.

I'm thinking about my relationship that way.

I have to think that other people are thinking about it that way too.

It isn't an AI spinoff, it's a brand spin off with an AI label on it.

I'm watching this, but I'm not necessarily following this.

I am 100% behind the store managers winning all day long.

Martin Bailey.

My gosh, is there anything you haven't done in retail, my friend?

Anything at all?

There's a lot to learn, as you know, but up until now, I would say probably not, no.

But the future of retail is changing vastly.

You got to keep your finger on the pulse then, between you and I. I think we do brilliantly.

Yeah.

You've got one of the most well rounded backgrounds I've ever seen.

When did you first get the retail bug?

Like, when was the first retail job for you?

I was a student, so I left Belfast and went to university in Edinburgh and my dad told me, it's over to you now.

You gotta stand on your own two feet.

So I had a job within four days of being in the country and I got the bug purely because of people.

Still today.

I know we talk a lot of technology and advancements, but it's still a people run business for people, for customers, for colleagues.

So I got the bug very quickly, within 18 months of being a student, sitting on a till or doing the trolleys or sitting on the customer Service desk.

I was a part time section manager.

So I was earning, Jesus, 22,000 sterling back in 1996.

Had my own flat, had my own flat, had my own car.

So I was a rich student because of retail.

So it's always looked after me and I think I've always looked after it.

Got it.

So was that in grocery then, Martin?

Is that where you grocery?

Tesco's.

I started on the Tesco shop floor on Broughton Road, Edinburgh.

For anybody that's Scottish.

Rockton Road, Edinburgh.

That's crazy.

And I remember too when I first met you.

I want you to share this story.

We got a couple minutes here at the outset.

I think it's important too, when I first met you, you told me the story about what happened to you during COVID Can you share that with the audience?

Because I think it gives a good insight into just the depths of the battles you have been involved in when it comes to running retail operations.

I've pretty much been an ops all my life.

But my last role was CEO for Tesco's and Tata, the joint venture in India, Mumbai.

And I went over in 2019.

Actually you can see, maybe you can see the family behind me in certain photographs.

And they were due to follow me in 2020 in the new school year for obvious reasons.

Covid hit and the world turned upside down in March.

And I went and led the Indian team through COVID wave 1, 2 and 3.

I saw the family three times in three years during my contract.

We went through some really tough times.

I know it was tough for everybody, but the food retailers were 10, 10x busier.

But if you can imagine the complexity of India, which is extremely complex, normal, throw in some Covid, mom and pop is still 90% consumption of India and 10% is modern trade.

But during pretty much 2020, the 10% of modern trade had to service 100% of 1.4 billion people.

So it was crazy.

I've got so many amazing stories and the Tata family during a crisis is an unbelievable company.

Wow.

Baptism by fire.

Wow.

Yeah.

It's just wild to hear too that, you know, you couldn't see your family for that period of time too.

It was.

Nobody's fault.

It was nobody's fault.

And we had to do the right.

We had to do the right thing.

And again, being in India, it's very unique.

It's the largest nation in the world and we'll continue to do so.

So Covid was tough for everybody but India, definitely tough.

And again, feeding the nation was a priority for all retailers.

Globally.

In this case, it was 1.4 billion people.

Yeah.

Wow.

Wow.

All right, well.

Well, for those listening, Martin and I have talked about doing this for a while.

Martin's been on Ben Biller's Grocery Talk podcast, and he and I have been talking about doing this for quite a bit.

And I'm excited to bring this to everyone, to our audience, because I think it's going to be a great show.

And, Martin, I think.

I think you and I both hit the lottery here on the headlines this week, too, because some weeks, some weeks, the headlines aren't that.

You know, I'm not gonna lie.

Some weeks are better than others.

But this week, all five of them are just absolute bangers.

So should we get to the show?

We should indeed.

Yeah.

And bangers is the right word.

Bangers, right?

Yep.

Bangers.

Maybe a little mash in here, too.

We'll throw a little mash in here, too.

All right, let's get to this week's Fast 5, which is of course brought to you with the help and support of the A and M consumer and retail Group, Miracle Corso, Ocapa Capital, Valak and Smart Scout.

In this week's Fast 5, we've got news on Walmart bundling Walmart plus and Sam's Club plus into a single $120 membership.

Albertsons cutting the price of its paid subscription to $39, Gap using AI in its hiring processes, and David's Bridal planning to spin off its AI platform, Pearl as a publicly traded company.

And Jennifer Shago from FMI also joins us for five insightful minutes to discuss the state of technology adoption across all levels of US Grocery, from the biggest all the way down to the smallest of regional operators.

But we begin today with Walmart rolling out the welcome mat for AI agents.

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 experience, tools and operator like pragmatism to help retailers and consumer products companies be on the right side of disruption.

Here we go.

Headline number one.

While Amazon has blocked AI shopping agents at every turn, Walmart is rolling out the welcome mat with a new Agent Gateway that lets approved AI agents search its inventory and buy on a shopper's behalf.

According to TechCrunch, Walmart CEO John Furnor unveiled Agent Gateway on October 21st at the Masters of Scale Summit.

In San Francisco.

Martin, did you attend the Masters of Scale summit?

You seem like a guy who knows a thing or two about scale, maybe being even a master yourself.

Yeah, no, but I would love to have been there because this is an amazing topic with huge pluses and a few risks as well.

But I'm sure we'll get into that.

I know, I can't believe, I can't believe there's actually a conference called the Masters of Scale.

I mean, is that seriously a real thing?

But anyway, anyway, Agent Gateway is a new mcp, which stands for Model Context Protocol.

It's a new MCP server that lets approved AI agents connect to Walmart, search its online inventory and make purchases for shoppers.

And it covers Sam's Club too.

In November, Walmart will also roll out agent profiles where each agent gets its own profile inside the customer's account so it purchases so its purchases show up separately.

Shoppers can require approval for every transaction or set spending limits that let the agent buy automatically.

All right, Martin, here's my first question for you.

To start us off today.

Amazon is essentially building a wall and Walmart is building a gate to AI.

Whose strategy do you actually like better?

I would definitely go with.

Walmart is right, I think in this one as well.

And I would probably keep it simple.

We'll get into the detail, but I keep it simple.

I think Amazon is protecting the shelf and protecting its ad spend.

Let's be honest with you.

And Walmart is already betting that the shelf is going away, which is reality.

So I'm going with.

Walmart definitely has got it right and we can get into the details.

Yeah, okay, good.

Okay.

I was gonna, I was, this is, I was curious, where are you gonna go with this?

Because I was like, oh man, are we gonna get into a big debate right out of the get go on this one?

But no, I'm, I'm a hundred percent solidly with you and I'll say why.

And then I'd love for you to expand on, you know, and, and throw your thoughts in here too in terms of what you agree with and what you disagree with.

But there are three reasons I like this move and two of which I think are something that Amazon could do, but one of which Amazon can't touch.

The first one is I've talked about on this show that I think marketplaces are going to be a tremendous advantage in the future here as agentic AI comes online and also Walmart by way of Sparky is learning how to code things and attribute things to show up in an LLM type of environment and people want selection.

So the LLMs are going to move in that direction.

I think we can bet on that.

And Martin, I see you kind of nodding in agreement there in the background.

The second piece is Walmart and Amazon does to an extent too has the perception of being the lowest price and if you look at it, it almost always is.

So as price gets brought into the LLM considerations, Walmart is going to win.

But the third part I like most is that the LLMs, as you look to the future, are going to help people decide how they want to shop.

And by how they want to shop that also means how they want to get their products.

They want them delivered, do they want them picked up, do they want them express delivery in 30 minutes or less?

And Walmart has all of those capabilities and because of its stores, Amazon can't touch that.

So that's why I love it.

I think it's just an incredible offensive move from Walmart.

I would agree with you.

And it doesn't come without risk because you said let's debate it a wee bit and you thought this would be the one that we would debate the quickest.

And I think there's risks on both sides.

But if I use this simply they're smart, Walmart is smart because again this is about each is approved, each has a spend limit and you even if the agent gets it wrong, they're going to give a refund.

And if you think of that last point, that's probably the biggest trust index taken away.

So again, smart from day one, do the right thing right for the customer and this is definitely the right thing for the customer.

However, no agent will look at NCAPs so that impulse buy maybe no sponsors, sponsor list and so that ad spend I spoke about, there is no eye level placement with an agent for obvious reasons.

So shoppers now become a machine which compares price, availability and delivery.

And if you think about it, this will favor the price leaders.

Now Walmart is a price leader, but I'm going to bring in Aldi and I'm going to bring in Lidl at the same time.

And again, me being ex Lidl, I know that this also helps in terms of the branding or the indirect branding on behalf of the price leaders, which are Aldi and which are Lidl.

Aldi being obviously bigger and the shoppers do go towards this rationale when it's quite clearly in front of them.

So Walmart is the biggest discounter by far.

Aldi and Lidl will also play a part here.

And this also helps the scenario of building the basket and building it fast and building again in a genetic fashion.

So I think there's a risk there with upselling.

But again, I think as we get used to it as consumers, I think this is on obviously the right direction and the data is gold when it comes to the behavior of us, as in consumers as well.

There is a worry for Amazon and this is the reason why they're blocking.

I think they're blocking and that's that ad spend.

They're hugely reliant on ad spend.

So sponsorship of product is dependent on humans scrolling like you and I through the app and through the results page.

And if you skip that, that becomes a problem.

And that also applies to this being Walmart.

There is a risk to the positives at the same time, but Walmart itself is doing the bold call and knowing that there is a risk to the ad spend.

But again, the greater good is winning the entire basket at any time, any place, anywhere, with any customer.

And that's obviously the biggest thing.

And Walmart being the biggest retailer in the world, there is a risk to Walmart as well.

Does Walmart become nearly the warehouse behind somebody else's front door?

Meta OpenAI Muse, as you've just mentioned, and this is where obviously Amazon is coming, that actually we want to be the full conversation, not part conversation.

So the relationship within the ecosystem that Walmart is building with power and huge investment is making sure that they don't become just the warehouse of somebody else's front door.

And I think that's important to call out as a risk.

And you mentioned obviously around Amazon, around walled gardens, Amazon is betting the shoppers will use Rufus and Alexa and not third party because they're closing the third party.

I think they're also closing opportunity at the same time.

So I think by far Walmart is right, but it doesn't come without risk.

Yeah, I think I'm glad you brought up that point at the end because that's where my head was going to the point about being kind of the back end infrastructure for the LLMs, which I think is okay, because at the end of the day, the LLMs can't ever do what Walmart and even Amazon does in terms of the warehousing, the logistics, the placement of the stores that exist throughout the country.

That's really hard to supplant.

That's a pretty big moat.

So you can get into a nice symbiotic relationships with the LLMs.

I think, unless I'm missing something.

But the other Point I make too is, and we've been talking a lot about TikTok shop on this show in terms of like, and we had Scott Needham from Smart Scout on talking about the symbiotic relationship between TikTok Shop and Amazon being kind of the backend fulfillment for TikTok Shop.

And so if I'm Walmart and I'm listening to this conversation, I want to make sure that I get into that space too because if I do, then I'm starting to squeeze, I'm starting to squeeze Amazon out here in the long run.

I know Walmart listens to the show as we'll talk about in the next headline for sure.

But you know, if Walmart can become the place that TikTok shop lands their, you know, inspired, inspired shoppers to purchase the product, that's a big get.

And so Amazon, I'm not liking the perch atop which Amazon sits, but Martin, you get the last word here.

So again, Amazon is protecting the shelf and Walmart is being forward thinking, realizing the shelf will go away.

However, the ability to grow into E commerce, it's roughly after H1 in America, it's around 25% growth, hovering around the 20% Walmart is higher.

If they're going to take on Amazon, this is where they take it on and they're doing the right thing.

Yep, 100%.

All right, let's keep going.

This is great already, Matt.

I knew this show is going to be a good one.

All right.

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Headline number two.

Walmart again.

Big, big week for Walmart.

Walmart is now selling Walmart plus and Sam's Club plus together for $120 a year, which equates to $10 a month, which is nearly $100 less than buying the two memberships separately.

According to CNBC, the joint membership launched October 20th and it is the first time Walmart and Sam's Club have offered a single membership.

And because, because, Martin, I am keeping score at home, it is something for which I have been advocating loudly for the past six years.

Put you on the spot, Martin.

This week this is the A and M. Put you on the spot question.

Is Walmart making a brilliant bet to capture more of the customer's total wallet or is it Risking membership revenue and cross banner cannibalization between Walmart and Sam's Club without actually growing the pie.

What do you think?

No fluff answer.

Walmart isn't selling a membership, it's buying the household.

Definitely.

And I'll tell you the reasons why Sam's Club members Sam's Club plus members in particular the highest value in the whole of America.

So straight away you're playing into your strengths and then handing them free delivery from Walmart pushes them towards the weekly top up which wouldn't necessarily be a mission for the Sam Club plus so it's going to add to that and why would you want the top up to be somewhere else?

Why would you not want it in Sam's Club and or in Walmart?

So you're now being clever.

The other thing that is clever for me and again I'm smiling at the same time being a retailer and thinking about this board having this is they are doing annual billing not membership, not monthly annual billing straight up front.

So first of all cash in the bank.

Cash in the bank first of all and Walmart a lot of cash and second of all that's already got the stickiness for the entire year so why wouldn't you use it?

So again I think it's clever.

Is there cannibalization?

The answer could be but Walmart have very been upfront to say we know there could be but in reality we're going to win the entire basket.

So the top up mission, the convenience mission, the quick mission or indeed the weekly stroke monthly mission.

So they're going after my entire wallet as you mentioned earlier on is there cannibalization?

Slight is the biggest growth around taking America to the next level with Walmart 100% and growing the pie if I'm honest with you they have to put themselves under the pressure in the next two quarters.

Do they see the KPIs of the new Sam's household not upgrades the new Sam households that are now on board plus penetration of what they're trying to do and the renewal rate in particular are they going to have members that will keep coming back?

Those three things answered makes all of this a brilliant move.

Yep, yep.

And we didn't even talk about the retail media angle too of combining those two retail media systems into here.

I, I 100 agree with you Martin.

I think no surprise because I've been advocating for this for so long.

The cannibalization question to me it doesn't scare me at all.

I1 I think, I think flat out, I think they're two different trip types as well.

Especially when you factor in the digital.

The digital interactions that Walmart can have across these two banners too, which I think makes it very interesting to me and compelling.

But second, I think you said this too.

I'd rather cannibalize myself than be taken out by someone else.

I mean, I just always would.

I mean, look at, look at, the best example for me is where would Gap be today without Old Navy?

If it hadn't done that, Gap probably might not even exist at this point.

So I think that's proof in the pudding right there.

And the other point I mentioned, this program got me, it got me like I'm 10.

I'm, as Mickey Drexler used to say from the gap, I have 10,000 people.

I'm going to Sam's Club now for gas.

I'm doing my bulk buys via digital, whichever one has the best option for me.

And whenever I need a speedy delivery, this is key because Walmart is winning this for me.

Now, I've talked about it on the show.

Whenever I need a speedy delivery in 30 minutes or less, I'm going to Walmart and I'm using my Walmart plus subscription to that end.

So that's how I'm thinking about my relationship with Walmart now.

And if I'm thinking about my relationship that way, I have to think, I have to think, Martin, that other people are thinking about it that way too.

I mean, you've been in retail a long time.

That's kind of the merchant intuition here, right?

100%.

And you brought up something I didn't bring up and you're completely right.

It's the bundle effect, it's the fuel reduction price.

And again, fuel at the moment is haphazard to say the least in America at this moment.

But no matter what, very expensive.

And then you've got all of the other perks and not just the free delivery and the cash back, but it's immediate cashback.

But again, coming from a Tesco background and the Tesco Club Card, Walmart is now going to have a customer ID and a customer behavior across both of the formats.

And that personalization and that knowledge and that data is one of the big reasons why Tesco still stands easily.

Number one in the uk, their home market is that loyalty towards the Tesco Club and the Tesco Club Card and Tesco Club Card Plus.

And what Walmart doing is doing their own version of that.

And that is already studied, already proven, and I'm convinced also the right bet for Walmart.

I want to come back to something too that you said about income demographics as well, because I think that's another factor here that makes me less and less concerned about the cannibalization effect too because, you know, I think it's been pretty well documented now that Walmart plus has been a great way to get higher income shoppers into Walmart to interact with Walmart in new ways.

Because, you know, a lot of times they say like, you know, I want to go to, I want to interact with Walmart, sometimes I want to go in the store, sometimes I don't.

But this now gets them into Sam's Club.

So anyone in that higher income demographic that's been showing a proclivity to, you know, not want to engage is probably more likely to engage in a Sam's Club as well, are they not?

Martin?

I think it's an upsell.

I really do think it's an upsell.

And again, the whole reason the Sam's Club was invented was to know that the highest value customer in America is the Sam's Club Plus.

So again, there's, there's that affiliation to more spend, more loyalty, bigger baskets, more reasons to shop where, when high you want with Walmart.

And again, it's a proven track record.

So I'm totally with you.

There will have to be a cannibalization and it was noted in the announcement from Walmart.

But actually the, the greater, the greater good here is, is an improved P L but most importantly an improved stickiness for the Sam's Club and Walmart customer.

Right, right.

And everyone in Costco's retail media arm just said, oh God, what do we do now?

You know, that's crazy.

It's wild to think about.

All right, let's keep rolling.

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Headline number three, Albertsons is revamping its paid subscription as well as Albertsons for you plus.

No crap.

All right.

Cutting the annual fee to 39 and tying it directly to Free Albertsons for you loyalty program.

We got to come up with something different than Plus.

According to chain storage, Albertsons Free for you plus is available across all Albertson's company's banners.

A spokesperson called it the next evolution of Fresh Pass, which launched in 2021.

At $99 a year or $12.99 a month.

Members get unlimited.

This is important, everybody.

Members get unlimited free same day delivery on orders over $30, free pickup from Flash Albertson's fast digital fulfillment services, which normally cost 3.95 per order and flash delivery in as little as 30 minutes for a $2 upgrade which normally costs $11.95.

It also includes reward points that never expire, personalized deals, a birthday treat and a free item every month.

Albertsons estimates regular members will save an average of $25 a week.

Martin Albertsons Pretty much.

Pretty much Albertson just fired its own shot across the bow in the growing subscription delivery wars.

Do you think this heralds future price compression amongst all of these competitors?

The answer is yes.

And I do think this is the right.

Move,.

But I think this is the right move, but defensive obviously.

And if you look at the performance of Albertsons and you look at what they need to do to come back and to really make an impact the way they used to, I would say when you're dropping your prices by 60%, the product doesn't get any better.

It's simply the old one wasn't working.

So straight of all that's a brave statement.

I think it's the right move.

However, they're going to have to now make up a lot of money in their average basket, the frequency, because on the retail media, as you mentioned earlier on Walmart, because if they don't, there's no way $39 pays for any of the free deliveries throughout a year.

So they have to really go for it.

Hence the word defensive is right.

But I think it's the right move for them because they need to do something.

They're obviously up against the comparables against Walmart that we've just spoken about.

Walmart have the bundle effect and Albertson don't have that.

So right move, defensive and they're going to have to work extremely hard to not only get more customers for an average, big average spend and better retail media, but they are going to have to try and pay that back because this is essentially nearly below cost selling, if you want to think of it that way.

So you, but you do think this is the right move?

I think they have no option.

Back to my.

Point,.

Yeah, if you sell, if you're selling it 60% cheaper with no better product, it means your old one wasn't working.

And if your old one wasn't working and the competitors have got smarter and technically cheaper, so better value proposition, then you have to do something you can't lie over.

This is still a large retailer, 80 billion turnover in the US a 20 odd brand brands, national brands that are very proud to do nothing would be much more costly than doing something.

So right move defensive.

But it also means that the old one wasn't working.

Interesting.

Interesting.

I'm kind of, I'm kind of on a. I'm kind of with you and then I'm kind of not.

So like where I'm, where, where I'm, where I'm not is like I kind of wonder if, if it's better just holding out and waiting a little bit before you even do this.

Because I mean you look at the numbers, Martin.

I mean you kind of, you kind of said it like this is pretty compelling price wise.

You know, it's very aggressive on price.

And the other part about it in comparison to, you know, Walmart and Amazon is, you know, Albertsons only sells groceries.

So it doesn't have the margin to make this work, which is basically what you were saying.

So, so if I'm like, so go back to my question.

If I'm Walmart and Amazon, I'm watching this, but I'm not necessarily focused following this because it feels to your point about being defensive, the other point I make, it feels kind of desperate to me and it feels desperate in the sense of like all the changes that are going on at Albertsons, they've now got like one of the biggest boards in all of grocery.

They've changed over the leadership of their board as well.

Like, is this the right strategic move to make right now when you haven't really set your strategic direction?

I mean, just a week or two ago, I think it was on last week's show, we were talking about how the whole strategy's up for review.

So if the whole strategy is up for review, why are you getting this aggressive on price right now?

What do you think about that, Martin?

I'm gonna replace desperate to realistic, if I'm honest with you.

Realistic.

Okay.

All right.

I think,.

I think so.

Yeah, I understand there's the meaning behind it.

I understand that.

But again, if you look at the pressures in America in retailers, the growth, the big announcement from Kroger, from the board only last week, Walmart, Amazon head to head taken on all the 330 million inhabitants.

And, and Albertson is not performing in pretty much anything.

They have to do something.

The cost of doing some, the cost of doing nothing is a, is an even worse disaster.

Even worse disaster.

So I think, I think again, I, I'm Okay.

With defensive desperate, you could probably say the same.

I understand that.

But if you think about how going from paid to free and it pretty much is the case and building on the free for the you program means that they're going to have a tiered, the paid tiered and I'll go back to my Tesco example.

Tesco free, Tesco plus isn't free and that's what they're trying to do.

So there is, there is a longer play here.

I know the headline goes straight to $39 that that's it.

But there is a, I think there is a play here that will work and you got to bear in mind their local regions that they're in with their local brands.

They have great, they have great loyalty and I think this, this will drop a barrier of price which ultimately they have to do.

It will say to the existing loyalty will be better and we'll be there.

Yeah,.

I understand your point but desperate but I think it's essential and realistic.

So I'm going to give them credit but they're going to have to work extremely hard to improve the basket, to improve the loyalty to get even more money out of retail media advertising.

Otherwise we'll sit here in a year's time and I'll agree with you rather than challenge you.

Yeah, well, and I think, I think the thing will agree on too.

It's a bold bet.

So like if you're making this move like I'm, as a, as a shareholder, I'm potentially laser focused in on how is this membership performing and what are you talking about in your next few quarterly earnings calls.

Right.

Because if it's not working, holy crap, you got a problem.

Right?

Yeah.

Yeah.

I think you've just mentioned something I was going to say like there isn't full transparency.

Like Walmart have thought it through, communicated through and now we're able to judge it.

But if you give you an example of the fresh press members, whether the two flash two dollar flash fee covers the 30 minute delivery wasn't answered.

And that is a game changer at the same time because it's really not free.

You still have to play the two dollar.

Right, right, right.

All right.

Wow, great discussion.

Glad we mix it up a little bit there too.

Although I think at the end of the day we kind of agreed.

All right.

And speaking of all things related to grocery and grocery tech, let's welcome Jennifer Chago onto today's show.

Joining us now for five insightful minutes is Jennifer Chago.

Jennifer is a longtime fan of the show and is presently the senior director of Technology Strategy and Programs for fmi.

And she is here to give us her lowdown on the state of technology across the grocery industry.

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

To that point, FMI recently released the State of Technology 2026, which is your second report benchmarking the food industry's progress on technology.

The report's central theme is From Adoption to Advantage.

So my first question is, what the heck does that mean?

And then my next question is, why is the industry's technology conversation so important and how is it changing right now?

So I think that over the last 10 years, the Conversation's been a lot about what should we buy, what should we build, where should we invest or do pilots.

And now that we're seeing that there are really significant investments happening in the industry, and it's more about how do they get the value out of those investments.

And that's really the central thing we tried to focus on in this report.

I think that the investments continue to be stronger than they've been in prior years.

We see more and more in that area.

There's 71% of food retailers are going to be investing in technology in 26.

So we're happy to see that.

And the progress that's made over the last 10, 15 years.

Yeah, I mean, to that point, that was actually going to be a question I was going to ask you is like, yes, 71% say that they're going to increase their technology spending, which, you know, having followed the grocery industry for a while, that, that is, that's, that's a big number.

That's a big difference than where things stood before.

But yet, by that same token, the report also says that only 29% have a defined change management plan.

So how do you think about that gap and what's, what's so important for the grocers to think about in terms of, you know, understanding that gap too?

Yeah, I think that was one of the most interesting insights that came out of this report.

And it really does tie to the fact that we see people trying to figure out how to get the value out of the investments.

And so I think our retailers and our CPG suppliers are really seeing that they can put a tool into an environment, but getting the maximum out of it takes getting the people aligned to what the project is helping, understanding the workflows that are changing as a result of this technology being installed, and really looking at that across an organization.

So that's a huge opportunity.

And I think that we're Going to see more and more people building those plans.

You know, the 29% of people who had defined today would be compare should be compared to the 50% who are planning to build one.

So hopefully we'll see that gap close.

But that is a significant opportunity for the industry and I think it's also a significant opportunity for the technology solution providers to understand that gap and really work with the retailers or CPGs that they're partnering with to help facilitate that.

Because they see a ton of these on integrations.

They've seen ones that go well, ones that don't go so well.

And so any insight they're able to lend to the retailers that they're working with or CPGs they're working with will all the better help facilitate the successful implementation.

Yeah, that's a great point.

The technology solutions providers have the advantage of seeing their solutions deployed across many different environments, across many different retailers.

So Jen, will you all track, continue to track this going forward at FMI2 to make sure that the industry is doing what it needs to do?

Because at the end of the day, it does come down to people, process and technology, not just technology.

Yeah, absolutely.

And I think we're going to continue to expand on the research.

This was the first year that I think we kind of clicked down a couple more levels.

So not only just in the technologies, I think, you know, in the past we might have looked at a few different technologies, but.

But they're changing all the time.

So we're going to keep our benchmark, especially around this area, and then continue to develop it as new technologies emerge.

You know, think about agentic AI.

It's changing every second.

So I'm sure we're going to have a bunch more stats that we're going to want to follow there, but we're really interested in doing that in order to help people identify where we're having successes, where we have opportunities and as an industry to work together and see how we progress over time.

It's great fodder for good executive level conversations, particularly to FMI Midwinter.

That's coming up.

Absolutely.

All right, the next thing I want to ask you about is company size because the report also identified that as a major fault line, as a major separator.

So what, what in your mind, Jen, separates the technology leaders from the laggards and what can the small food retailers, which there's a lot of them in the us what can they realistically do to close the gap?

I try to think about what's what a retailer of different size needs for their organization.

And I think that it's really important for them to understand what their operation needs.

So what a large retailer is doing is not necessarily the best fit for a small retailer.

I think that for small retailers, finding a use case to start with and then reverse engineering what technologies they might need to accomplish achievements, change in that space is probably a really good place to start versus trying to boil the ocean.

And then I think it's also interesting, the research pointed out too that the mid market regional retailers are actually really punching above their weight and in many cases even more advanced in some of their deployments than some of the larger retailers.

So it was really interesting to see that level of detail in the retail research and for us it helps point us to where we need to lean into certain communities more.

I was going to let you go on that question, but now I got to ask you a follow up.

So like if the mid market retailers are seeing success, what are one or two examples where they're, you know, seeing their technology investments pay off?

I mean is AI gets all the headlines?

Is it that or is it other things?

No, I don't think it's just a. I, I mean I think that fresh food inventory planning is definitely machine learning and AI driven for the most part.

But I think AI analytics and cyber security as well is another area that was surfaced.

But I think you know, in terms of the fresh fruit inventory planning like that use case has been in market for a while now.

That was an area that very interestingly where we early, we were early adopters well before we were really talking about AI in every single conversation we were actively using AI in that space.

So it's also just really interesting to see where the industry has leaned in and where we're really advanced for our, our industry compared to other retail spaces even.

Got it.

What's been going on on the shrink side of things in the grocery industry.

Jen, any insights you can share from the report there?

Yeah, shrink is one of the standout areas that has been most successful where people have implemented it.

So we actually saw for food retailers specifically, 85% of them think that they have a somewhat successful possible in store shrink reduction program in place.

So that was an area that was a standout for sure.

And I think data analytics is another area and they're using it for all kinds of different use cases.

So anywhere from like assortment to customer data loss prevention, even promo management.

I think that's going to be replaced more and more by AI as we continue to see these reports come out.

But I think those or good places where there's some strong foundation to build on there,.

There's some good traction there.

All right, so for those listening that maybe want to access the report, what's the best way for them to do that?

Yeah, check out the report.

It's on fmi.org and you can also use our tool research AI to get insights and ask questions too.

All right, well, thanks, Jen.

That was great stuff.

Really interesting.

Yeah.

Thank you.

Okay.

Headline number four.

Four is brought to you by Ocampo Capital.

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

You can learn more@ocampo capital.com headline number four.

Gap Inc. Is scaling Bridgit.

Yes, Bridget, which is an AI enabled virtual career guide to help manage a holiday hiring rush.

It expects to bring in roughly 200,000 seasonal job applications, according to chain storage.

Gap has been piloting Bridgit since June across more than 100 stores and six regional distribution centers.

It is built on the Paradox AI recruiting platform and integrated with workday recruiting.

During the pilot, nearly 45,000 candidates engaged with Bridget and it scheduled more than 7,000 interviews for store leaders.

Wow.

It answers candidate questions around the clock, coordinates interviews and sends reminders while store managers still run the interviews and make the hiring decisions.

Martin, you've staffed thousands of stores in your career, no doubt.

Would you greenlight a technology like Gaps AI hiring assistant Bridget within your own retail operations?

I understand the essence behind it in terms of speed.

The seasonal hiring for essentially the store managers are going to be the winner here.

So the store managers will be recruiting kind of end of August, September and October for essentially a two month, maybe two and a half month bridge.

But it could be, honestly, it could be a 1520 increase on your headcount, full stop.

So it's a lot of time, a lot of effort, and the retention is quite low, so you lose them anyway.

So anything to speed up the accuracy with good govern governance.

I'll come back to that in a second because again, it's personal.

It's got personal data I'm definitely for.

And I use the initial concern around data because back in mid-2025, McDonald's McHire system built by Paradox, ended up using a login, yes, a login password of 123456, putting up to 64 million applicants on record at risk.

So it is important to bring in AI to improve efficiencies, accuracy, good gov with good governance, and with amazing Data security, because we're talking about your and I data or our kids data.

Seasonal recruitment.

Retailers require it, but so do the students like me, back in the day when I was.

This is an important part of life, an important part of being ready at peak, an important part of our first impressions of being in an interview as a student or a temporary, a temporary recruiter.

And you don't want to mess that up.

So there is risk behind it.

Ultimately, it's probably the least sexiest story of today, if I'm honest with you, Chris.

However.

It is,.

It could be easily paid back by this Christmas.

So I am for it.

Good, like AI, good governance and amazing data security, it will definitely work.

And it's not the first of its kind.

This is a normal practice anyway.

But I find it interesting around that mid-2025 McDonald's McCire system that was built by paradox, I find that quite interesting as well.

So the answer is yes, you'll pay back no problem at all on the investment.

But those two risk points, if satisfied, then the answer is yes for me.

And again, the store managers will win.

And I am 100, 100 behind the store managers winning all day long.

Every time.

Right?

Yeah.

100.

Yeah.

Yeah.

And you learn from the steps that people take before you.

Right.

And that's, that's partly why we do this show too, is to highlight and talk about some of the potential pratfalls that, you know, could exist.

And we want to make sure executives are thinking about this if they're thinking about things, you know, inside their own organization, organizations.

I love your point about store managers.

Yeah.

The hunter.

I'm, I'm, I'm, I'm on board with this too, because that process, Martin, is so laborious, it's so time consuming.

And the other point about it too, which I'd heighten, it takes you off the sales floor.

You know, it takes your entire team off the sales floor as you're getting ready for the holiday, which is quite frankly the time when you don't want people off the sales floor because you want them getting the store ready for holidays.

So, you know, anything that happens to speed that along procedurally, particularly since they're still doing the interviews, you know, and provided like, you know, like you said, if you can make sure the governance is in place, which I think if you're smart about it, you can make that happen.

Yeah, I think it's an A plus in my book, so.

And a utopia, a utopia is, is also the part time work, seasonal workers coming back for the next season.

So from Christmas to half term to Easter to summer that's where the retention when stickiness you you now have a flexible workforce that actually is earning its money.

But when you bring people in in a bad way incorrectly then they leave.

It's extremely costly.

Not just store managers time but your P and L as well.

So all for it again good governance and amazing data security.

That's a great point too.

The investment relative to the longevity risk is really interesting.

All right well headline number five is brought to you by Veloc.

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I have no idea which way your head is going to go on this one Martin.

I can't wait to talk about it.

David's Bridal plans to spin off Pearl, it's AI powered wedding planning and vendor marketplace platform into a publicly traded company through a SPAC deal.

According to CNBC, David's Bridal signed a 9A non binding letter of intent with KNF Growth Acquisition Corp. 2A SPAC.

The deal values Pearl at a pro forma enterprise value of about 350 million dollars and includes a 75 million dollar pipe which stands for private investment in public equity.

I had to look that up with a proposed $25 million anchor investment from Scion David Bridle's largest shareholder.

Under the deal, Pearl gets the David's Bridal brand and intellectual property.

David's Bridal keeps its physical stores and a material stake in Pearl and the two expect to sign long term commercial agreements.

CEO Kelly Cook would also become Pearl's CEO and the deal is expected to close in the first half of 2027.

Pearl, it should be noted, also says that it projects EBITDA margins above 30% in 2026 and revenue growth of more than 100% in 2027 to over $85 million.

It also says about 90% of US brides engage with its ecosystem.

Martin, Point blank, are you pro or con?

David's Bridal spinning off its AI wedding planning software?

Pearl.

I sit on the skeptical.

You do?

I figured you would.

Do it very, very much on the skeptical.

So this isn't it isn't an AI spin off.

This is a brand spin off with an AI label.

There's a slight difference there and that's okay.

At the end of the day you take the story.

I understand the point around brides because it's such an, they don't just buy a dress, they buy the ensemble and the loyalty.

They're very similar to, I don't know, new parents with their first baby nappies and, and so forth.

So there's a, there's an element of that as well.

So I understand the point.

I'm unsure if it is going to do everything that they say will happen.

Essentially, Pearl gets the name and the ip, so the stores become the operator, relying on the brand that somebody else owns.

So it's a kind of opco propco split with the brand as the property.

So whoever owns the brand owns the value.

And this is the, the skeptical part that I'm going to leave it in.

So I put it down is it isn't an AI spinoff, it's a brand spin off with an AI label on it.

Okay, well, it's funny.

I interviewed Kelly Cook and Alina Verk at Shop Duck Fall recently and I got to talk to them about their whole aisle to algorithm theory and they're probably going to listen to this and want to come back on the show.

In fact, we talked about having them on the show at some point, but I'm buying this.

You know, we talk a lot on this show about, you know, situations like this arise where you hear about sorts of things like this.

And for me, I think this is actually where the split up creates more value.

And the reason I say that, Martin, is when you think about a platform for coordinating a wedding that, that, I mean, it doesn't exist in the U.S. you know, at a nationally branded scale.

Like where do I go to when I want to coordinate my wedding?

So that is an idea in and of itself that potentially deserves funding.

Now is David's bridal requirement to make that work?

Not necessarily.

So, like, I think there is some value to splitting it off and allowing the capital to chase where the opportunity is as you're, as you're kind of shouldering the load and making the operations approve on David's bridal.

Because that, that idea should not be encumbered by legacy.

So this is one time, and this is the only time I think in the history of this show where I'm buying this SPAC approach to what they're trying to do.

You kind of shook your head there like, huh, maybe he's got a point.

What do you think?

Yeah, no, I think you have a point.

And if you, if you cast your mind back, I said whoever owns a brand owns the value.

And I think the value in this play back to your One platform, the data.

Yeah,.

You're right.

Yeah.

So from a value proposition or a future value proposition, the data in itself is an asset to any investor.

And I do believe this example will promote more like it and then it'll get to your utopia that you're talking about.

So I am still skeptical, but I understand your point around whoever owns the brand owns the value.

In this case, it's.

It's the data.

And I think it'll be open more examples and therefore getting married hopefully gets cheaper, gets even better and so forth.

So I'm still skeptical, but I understand your point.

But data would be the reason why the value really is an asset for any investor.

So I'm with you.

You're maybe less skeptical than when you start.

Yeah.

The interesting point too that I'll highlight is when I was, when I was talking to them on stage, Kelly brought up the fact that there are a lot of small mom and pop bridal boutiques in this experience that need a place to plug in too.

And I think by separating this off and creating its own business to go after that again takes away the legacy of, hey, we're David's Bridal.

We gotta do everything through David's Bridal.

And it allows you to plug into that marketplace of services that are potentially out there that people want to tap into.

So, yeah.

All right, man.

Such a great show.

This is fun.

All right, well, let's go to the Lightning Round.

Martin, today's Lightning round is brought to you with the help and support of Smart Scout.

Smart Scout is Amazon and TikTok Shop intelligence.

Most tools show you your own account.

Smart Scout shows you the market, brand, revenue, category, share and who really owns it.

To learn more, visit smartscout.com omnitalk all right, Martin, if you could pick only one.

I'm going full on Irish here.

If you could pick only one.

So there's probably like 5% of our audience that's going to be interested in your answer this question.

But I'm doing it anyway.

I'm doing anyway.

This one's for me.

Martin, if you can only pick one Gaelic football or hurling, which one are you riding and dying with?

I'll go.

So, by the way, ga.

It's called the ga.

So the GA is an amazing institution here in Ireland, the largest unpro sport in the world that has a finals day of an attendance of 92,000 on finals day for both the foot ga football and the GA hurling.

So it's called the football and the.

The hurling.

I would push towards football because my Kids.

I would.

My kids play.

But yeah, an unbelievable institution here in Ireland and it is a global night.

There's teams, there's GAD teams in New York and, and Boston, etc.

So it's, it's getting around the world and I see why.

It's unbelievable.

It truly is unbelievable for a, for a non professional sport.

Unbelievable.

Yeah.

One of my greatest days of my life.

It was in the early 2000s when I watched.

I got up at like 6 in the morning and watched Galway play Carrie in the Gaylord football final.

And it was just one of the most memorable days I've ever had.

So.

Okay, well, bear in mind, it's Halloween this weekend.

I think it's probably important for a Halloween question.

So which retailer would you be dressed up as in Halloween and why?

Oh, my God.

Well, the scariest costume I could think of off the top of my head would be to go as a Target executive, particularly in my neighborhood.

I think it would freak out, freak out all the existing Target executives.

It definitely would freak out their PR team if I went and posed as a Target executive for the night.

That would be amazing.

I love.

I would love to do that too, Bart.

Oh, my God, man.

Maybe I may have to change my costume plan ideas.

All right, next one.

What is the scariest Halloween movie of all time in your mind, Martin?

Or even the best Halloween scary movie horror movie of all time?

I think you can't get away from Freddy, if I'm honest with you.

Really?

Yeah.

Really?

Yeah.

I don't know if it's just this side of the pond, but it was a huge splash.

And again, maybe my age at the same time, but it was a huge, huge.

I understand there's much scarier movies since then, etc.

But you've asked me the one that resonates, so it needs to resonate from my generation.

So I would say the Freddy's one.

Very unique, very mass market at the time and very scary.

So I'm gonna go with the Freddy's, but that could.

Be a reflection.

Of my generation.

Yeah, no, definitely, definitely.

Nightman.

Elm Street.

That's a grab.

That's a grab.

I think that's your generation and where you reside to my friend.

So again, stick to Halloween.

Okay, worked.

You've worked in retail.

Tell me the scariest time in retail.

And it doesn't need to be specific to Halloween, but it is a Halloween themed.

Tell me the scariest thing you've done or had done in retail.

Oh, my God.

I think I've shared this, but it's been a while.

The scariest thing that I've ever done inside of a retail store was work.

Black Friday crowd control in Cheyenne, Wyoming.

I, I was the district manager.

I showed.

We were going around all our stores just to make sure everything was okay.

And I show up and let's just say things weren't going well.

So me and a couple other folks on the leadership team, we decided to pitch in and I had to get the crowd like wrangled, you know, for the line that was starting to form.

And let's just say I was not doing a good job of it.

And.

And fortunately this cop comes in and saves me and he's like, man, good thing I was here.

I was like, yes, it was, sir.

Yes.

It was like he got everybody in line step, you know, because they're going to listen to him versus me.

It just red, red shirt, khaki pants, no matter what I was doing.

And he saved my life to this day.

That was, I was like, actually legitimately, like scared of how this was going to go at that point in time.

The reason why I asked this question and I'm.

Going.

To give you my.

I'm going to give.

You.

Which will make it, make it more funny is I still remember it was Halloween weekend.

It wasn't Halloween.

It was the night before Halloween.

And in Lidl, and this is olden days, so caveat and legal disclaimer.

This is olden days, but Lidl area managers used to do a late check.

So they would sit outside the.

Yes, they would sit outside the store and wait until the store staff come out and then they would come in and then do a check.

Off the merchandising.

Did they close the store correctly?

Yeah.

Yeah.

So again, this is all.

It's all okay.

It doesn't happen anymore.

Just for.

The.

Audience.

Doesn't happen anymore.

And I was the training area manager, but running a store.

So I was the one that was closing the store.

And the area manager was obviously outside.

I didn't know he was obviously outside waiting but because we were.

Knew each other very well.

He was a trainee area manager six months before me and my area manager and I was a trainee area manager.

So he had me under his wing.

We all come out.

There's four of us that come out, including me as a trainee.

And he jumps out with the mask on and the three others bolted up the car park because again, it was probably about 10:30 at night.

Close the store at.

8.

Oh my God,.

10:30 At night, pitch black.

And he put the mask on for a bit of fun.

And thankfully he shouted that my name as they bolted.

So I stayed.

So.

But yeah, that was the reminder of the good old late check, which doesn't exist anymore, just to be clear.

And the fact that it was a bit of a Halloween scare.

But certainly I remember training.

Oh, my God, as we're trained stories here, you know, at the end of the show, like, the other thing, the other thing I thought about as you asked me that question was it wasn't the scariest moment for me, but the scariest moment for my team was when I was learning how to drive a forklift and I literally ran the forklift into the, into the, you know, the racks in the back room, almost collapsing the entire back room.

So, like me and heavy machinery.

Martin, from that day forward, if you know, you're not touching it, you're not touching it.

So.

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

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Probably the easiest way.

Everything's on there from a contact point of view.

So my LinkedIn MartinMei Bailey B A I L I E Martin Bailey on LinkedIn.

All right, Martin, well, thank you so much for doing this.

It's an absolute pleasure.

Thanks to everyone that helps bring us these episodes together every week.

And on behalf of all of us at Omnitalk Retail, as always, be careful out there.