Latest / GrocerTalk / “Surveillance Pricing,” AI Hype Rapidly Becoming Reality, and the Realities of Rapid Delivery | GrocerTalk

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“Surveillance Pricing,” AI Hype Rapidly Becoming Reality, and the Realities of Rapid Delivery | GrocerTalk · GrocerTalk

• 0:00
  This week Seattle approved its fair and transparent pricing policy.
• 0:05
  Citywide legislation against so called surveillance pricing.
• 0:09
  If you've not been paid attention to this, then now is the time because legislation is now active in New Jersey, Maryland, Connecticut as well as Seattle that limit what grocers can do with dynamic pricing.
• 0:24
  Now one person who is paying close attention to this is Walmart CEO John Furner.
• 0:30
  His letter on Friday established the three principles wall multiple use to guide its use of AI pricing.
• 0:39
  But has Ferna been too conservative with a capital C here?
• 0:45
  Is the perceived problem even real to start with and does it even matter?
• 0:49
  In the court of public opinion we explore all of this, plus AI hype rapidly becoming reality and and the realities of rapid delivery, plus a whole lot more.
• 1:01
  Welcome to grocertalk.
• 1:05
  AI will transform grocery more than any technology that's come before it.
• 1:11
  No grocery CEO would do dynamic pricing based on individuals in a physical store.
• 1:19
  What's not debatable is that this is a moment of clarity, Ben.
• 1:22
  ESLs are here to stay.
• 1:25
  Central to the relationship between any grocer and his customers is trust.
• 1:30
  As an omnichannel operator, your store associates are your armed forces.
• 1:36
  I think it comes back to one of our universal rules of retail that no good ever comes if you surrender ownership of the customer.
• 1:42
  Hello everyone, I'm your host Ben Miller and this week I'm delighted to be joined on the podcast by founder and CEO of retail consultancy Tomorrow, Jordan Burke.
• 1:53
  A very warm welcome to grocertalk, Jordan, and thank you.
• 1:57
  Good to see you.
• 1:58
  Welcome home after.
• 1:59
  I know a very busy week last week.
• 2:02
  Yeah, likewise.
• 2:03
  I think we've both been on the road.
• 2:04
  But look, Jordan, before we get into that, this is your first time with us on Grocer Talk, so for those that don't know you, please can you share a bit about your background, your retail experience and then tell
• 2:15
  us what Tomorrow does.
• 2:17
  Absolutely.
• 2:18
  So thank you so much.
• 2:19
  I am a 15 year retail executive.
• 2:22
  I spent those 15 years at Walmart and my role at Walmart during that time was leading digital and Omnichannel for Sam's Club and Walmart, primarily in China.
• 2:32
  So I was based in the China market but also chairman of Walmart's Global Omnichannel Forum which meant overseeing our strategy and big bets from media to marketplace to membership across our Omnichannel portfolio globally.
• 2:45
  But eight years ago I founded Tomorrow and we are a global digital retail advisory firm and so we focus on helping retailers accelerate growth and profitability.
• 2:55
  And we are all former digital retail leaders and operators.
• 2:58
  So our differentiation is that we have been there, we have walked in the future shoes of the world's best retailers and figuring out what it takes to break through and that's what we do globally.
• 3:09
  Amazing.
• 3:09
  There is so much experience that I get to tap into today.
• 3:12
  I'm really looking forward to this conversation.
• 3:14
  But John, just to give us an example, can you tell us of maybe one or two kind of public domain projects that you've worked on just to just so our audience understand the sort of the retailers and the
• 3:25
  sort of topics that you cover it tomorrow?
• 3:28
  Great question.
• 3:28
  Yeah, we, we work with typically the leading retailer in a market or in a segment.
• 3:33
  And so one of our proudest accomplishments was being asked to help shape Walmart plus at Walmart so early days 2019, helping to shape what that proposition looked like around the world.
• 3:45
  In Australia, Kohl's with a C has been a client.
• 3:48
  We're helping to shape their Omni Grocery proposition and accelerating that growth has been incredible.
• 3:53
  As has in Europe.
• 3:54
  Migros, Turkey's leading grocer and one of the most innovative retailers in the world, working with the team to really optimize their data and media monetization strategy.
• 4:04
  So around the world, elite retailers looking to break through.
• 4:08
  That is where tomorrow is most trusted.
• 4:10
  Okay.
• 4:11
  And John, you are going to help us think through some really meaty topics today.
• 4:14
  So let's, let's get into it because this week's Grocer Talk, which is of course brought to you by with the help and support of Instacart Enterprise, Portager Vusion and Sifter.
• 4:28
  And in this week's Grocer Talk, we've got news on Tesco staff complaining about the impact on store operations from recently signed delivery partnerships.
• 4:39
  Instacart CEO's claim about the impact on grocery of AI and Sam's Club giving its members an increased role in product development.
• 4:49
  But we start today with retail news out of the wonderful Pacific Northwest.
• 4:53
  And for a change, it's not about Amazon.
• 4:56
  Headline number one is sponsored by Portager, a groundbreaking purpose built AI platform for retail negotiations and joint business planning, helping merchants prepare smarter, negotiate stronger and maximize value.
• 5:11
  Visit Portager AI to learn more.
• 5:14
  All right, let's get into this.
• 5:15
  Headline number one comes from Progressive Grocer which reports that the city of Seattle has approved the fair and transparent pricing policy.
• 5:27
  It's a measure designed to stop grocery retailers from using personal data to set different prices for different customers.
• 5:35
  The legislation prevents large online and brick and mortar grocery retailers from using sensitive personal information including race, gender, or even social media activity and chatbot conversations to determine pricing offered.
• 5:51
  Traditional coupons and transparent discounts for groups such as seniors and veterans remain fully protected.
• 6:00
  This is the latest so called surveillance pricing legislation which is currently gathering momentum in the US After New Jersey became the first state that to legislative back only in July.
• 6:13
  Now that bill also controversially included a one year moratorium on further use of electronic shellfish labels in grocery stores across the state.
• 6:22
  Right.
• 6:23
  All this led to Walmart President and CEO John Furner to publish a blog post on LinkedIn on Friday where he set out three commitments.
• 6:35
  I'm going to share this.
• 6:36
  I think this is useful context, Jordan.
• 6:37
  They were firstly the Walmart one won't set different prices based on who a shopper is or the time of day and that they won't use shopping tools to be able to differentiate.
• 6:52
  So here he's talking about Sparky.
• 6:54
  So saying Sparky anything put into that won't be used to change prices personally and that Walmart will continue to use personal information, responsible and respect individual choices.
• 7:05
  Okay, a lot there because this is a real meaty topic.
• 7:08
  Jordan, say look, I'd love to know what you think.
• 7:11
  Firstly tell us about personalized pricing in grocery stores, whether you think this is a concern worth actually legislating against.
• 7:19
  And then I'd love to talk about John Furner and do you think he has drawn the red lines for Walmart in the right places?
• 7:26
  Well, John's done an amazing job in the moment and I'll explain why there.
• 7:30
  But back to your first question, a topic worth legislating against.
• 7:36
  We could debate that.
• 7:37
  But I think what's not debatable is that this is a moment of clarity, Ben.
• 7:41
  And I think the industry can actually take a sigh of relief because what grocers and retailers more broadly have been wanting to do, they can still do.
• 7:52
  Over the last four years we've talked to publicly listed retail CEOs, private retail CEOs.
• 7:58
  None of them have had the vision of really doing personalized individual level shelf pricing because they've known that that's not going to work in as high profile an industry as retail is.
• 8:10
  And so they have been finding clarity that they are able to do loyalty program based couponing, cohort based discounting, that they can use ESLs in the ways they're intended to be used, which is in price, accuracy and efficiency.
• 8:27
  I think the industry is excited to have this clarity because now they can do the things they've wanted to do without uncertainty of what's legally acceptable or not.
• 8:37
  So I Take it as a very positive and yeah, something that probably ends up getting clarified now.
• 8:44
  All right, let's unpick a few bits of that Jordan, you talked about, and I'm paraphrasing here, no grocery CEO would do dynamic pricing based on individuals in a physical store.
• 9:00
  Have I interpreted that correctly?
• 9:02
  And if so, why?
• 9:05
  Yeah, even whether it be in the physical store or even on the app, this idea of a Ben Miller price versus a Jordan Burke price is something that, that was discussed for a minute, but is clearly not something
• 9:18
  that we've seen retail CEOs and leadership teams embracing.
• 9:22
  Now, let's face it, that is a policy that is not unusual in industries like the airlines, even in ride hailing.
• 9:30
  So it does exist, but it's one that I think our community as retailers has embraced.
• 9:35
  Doesn't make sense for our industry on a number of levels.
• 9:39
  So it hasn't been something that has been explored, pursued, and in many ways, Ben, we've heard from retail executives and boards this is off limits.
• 9:49
  So the good news for the consumer is this is not something that's been pursued or conceived as being a strategic lever for, for a long time.
• 9:58
  The good news for retailers is what they do do today and what they want to continue doing, which is to reward cohorts of customers that spend more, that shop more frequently, that have certain basket needs.
• 10:11
  They can still do that and not be concerned that they're breaking any policies.
• 10:16
  Yeah.
• 10:16
  And I think, Look, John, I think I'd go even further when I think about the grocery industry.
• 10:21
  Central to the relationship between any grocer and his customers is trust.
• 10:26
  Because what is being sold is what you put in your body.
• 10:29
  You know, the levels of care, the levels of legislation and the level of protection in the grocery industry are huge.
• 10:36
  And I think, you know, the idea of personalized prices breaks down that trust in a way that I don't think any physical grocery retailer could come back from.
• 10:47
  Which is why, Ben, I'm going to build.
• 10:49
  John Furner's response in real time was so compelling in our view, because what did is he achieved multiple goals with one fell swoop of a blog post.
• 11:02
  First, he stated that Walmart's EDLP heritage and EDLP commitment is based on trust and the idea and you'll have seen the poke in the first sentence that we don't want customers to have to think, is Tuesday a better
• 11:17
  day to shop at Walmart than Wednesday?
• 11:21
  That's a poke at the high, low retailers that Walmart has competed with for many years.
• 11:25
  And interesting for those that Read the policy out of Seattle.
• 11:29
  We'll see that Kroger was not only mentioned early in the policy, but consistently as the example of someone that has the potential to do things with pricing that might break trust.
• 11:41
  And so John was clearly making a statement that the Walmart pricing philosophy is more trust driven than what you'd find in a lot of other places, but also just the speed of response.
• 11:53
  Walmart historically has not been as forward on pr.
• 11:59
  I know for many of us in the recent industry we think they are, but historically they would be on the back foot and not want to speak on a topic.
• 12:07
  But John's leadership, I think to go out so quickly with such a clear statement and commitment is just an incredible leadership moment and is going to serve them well.
• 12:17
  So there's three principles, Jordan.
• 12:20
  So number two, we won't use shopping tools in ways to enable us to differentiate prices.
• 12:26
  So that's sparky.
• 12:27
  They're AI and I think that's really clear.
• 12:29
  That's great.
• 12:30
  Number three, we'll respect personal information.
• 12:32
  Fine.
• 12:33
  I think we'll take that as a given.
• 12:35
  I think it's number one that I want to challenge whether they've been too conservative and that's what have said.
• 12:42
  We won't set prices based on time of day as well as who the person is.
• 12:48
  Do you think by doing that they're preventing themselves using commercial levers?
• 12:53
  I mean on that principle, are they still able to, with true face, put markdowns at the end of a day to clear bakery and fresh to reduce waste?
• 13:03
  Do you think he's maybe gone too far on that one, Jordan?
• 13:07
  Good question.
• 13:09
  I think we both can be pretty confident that John and the team at Walmart and Sam's club have been thoughtful about what they can and can't do.
• 13:18
  And so things like produce markdowns over the course of the day, I would bet are nuanced out of that statement because those markdowns, they have to be, don't they?
• 13:29
  Of course, those are for all you, all customers, those are consistent.
• 13:33
  That's, I think what he has confidently said is everything we do, we would be able to open the book and show that we are not targeting an individual.
• 13:45
  We are not trying to take advantage of certain need states like during a time of day when a family might be more desperate because they need something last minute.
• 13:54
  We're not going to exploit customer relationships in pricing.
• 13:59
  We're going to do things that are transparent, are consistent, are fair.
• 14:03
  And so it's a great question, I think to be confirmed, but I would bet that there's some nuance in that first point that allows them to still do what is fairly standard.
• 14:16
  I think it all comes back to that trust thing.
• 14:17
  I think, Jordan, there's a couple of bits of clarity that I would add in having looked at the various pieces of legislation.
• 14:23
  You know, one of the eye catching things about the New Jersey legislation was the moratorium on ESLs.
• 14:29
  And lawmakers across Washington state as well as in Maryland and Connecticut, there was lobbying that pushed for that.
• 14:36
  But that hasn't actually gone through into any of those bills.
• 14:42
  I see that as a relief because if this pr, if this legislation really is about protecting pricing, you know, versus labor and you know, I think there needs to be an honest debate there.
• 14:53
  But if it is about pricing, removing the ability to use technology to take cost off the show floor, off, off the shop floor, I think removing that lever would be a very negative and regressive thing to do.
• 15:07
  So I think that's a positive.
• 15:09
  Jordan, I guess final point on this, if you've got any other thoughts on that and also practically if you're a grocer in any of the other states looking in.
• 15:20
  So what would be your recommendations of next practical steps to take in light of this movement?
• 15:25
  Yeah, I think there's two things that come out of this moment which is the clarity that consistency of these policies has provided in the sense that what is acceptable is discounting based on cohort in simple terms.
• 15:41
  So the ability to do targeted discounting based on certain behaviors, based on certain segments of your customer population, that activity continues to be fully endorsed.
• 15:53
  And so that's great.
• 15:54
  Nobody has to be concerned about doing that.
• 15:57
  I think to your final point on the value of ESLs.
• 16:01
  I think now we've seen more often than not government saying we support the use of this technology, just not when it's used for some type of targeted, again I'll use the word exploitation of customers.
• 16:15
  And so it is something that again I think is a clarity point that ESLs are here to stay.
• 16:22
  They have a role to play.
• 16:23
  They are an enhancement to the operation, to the experience and enough government decisioning that maintains that.
• 16:31
  I think that retailers should be confident that those investments can continue.
• 16:37
  Yeah.
• 16:37
  And I think it's no surprise that Walmart have been on the front foot as they have had one of the largest and most high profile rolls out of ESL technology.
• 16:46
  So I'm sure that's not coincidental.
• 16:49
  The really interesting conversation.
• 16:50
  But let's move on to headline number two which is brought to you by proud sponsor Vusion the global leader in connected retail solutions, helping grocers improve productivity, execution and the customer experience from shelf to checkout.
• 17:04
  So visit fusion.com for more.
• 17:07
  Okay, headline number two comes from the Grocer magazine where technology editor George Knott has discovered Tesco store employees taken to Reddit of all places, to complain about the impact on store operations of Tesco's new UberEats and DoorDash owned
• 17:24
  Deliveroo partnerships.
• 17:27
  Among comments like ridiculous, a nightmare and genuinely destroying the store.
• 17:32
  So I'm glad to see my British brethren are keeping their chins up here.
• 17:36
  Complaints focus around the volume of orders and the associated demands of picking and replenishment, taking store colleagues away from other tasks, especially staffing checkouts.
• 17:48
  One Tesco Extra that's the large hypermarket format store managers is quoted as saying.
• 17:54
  I never see my staff as they are always picking.
• 17:57
  It's taken over the whole store operation and it's total chaos.
• 18:03
  Jordan Right.
• 18:03
  Really looking forward to your views on this one.
• 18:05
  I know Tenerio you've done a lot of work on with partners.
• 18:08
  So look, stepping back from Tesco's clear implementation challenges as we see the E Comm Fulfillment pendulum currently swinging back to store for base fulfillment, what should grossers be doing to protect the in store experience for their regular shoppers?
• 18:27
  Firstly, Ben, never a good day at the office to walk in and see your store associates on Reddit or in the media saying that something you're doing is destroying the store.
• 18:36
  So let's both have empathy for the ECOM team at Tesco and so we recognize that moment and that is hard.
• 18:46
  But if we zoom out and we think of the trajectory of grocery, we are firmly in, as you know, the on demand grocery era.
• 18:54
  And not just in the uk, US but globally.
• 18:57
  We are seeing such a transition to consumers expecting not just same day but same hour delivery or pickup on grocery.
• 19:06
  And it is such a powerful proposition when it works.
• 19:10
  And in order to make it work, the stores almost always have to play an essential role.
• 19:16
  And let's acknowledge that Amazon in the us, uk, Canada is leaning into on demand fresh with its three hour proposition and even faster with dark stores.
• 19:27
  But as an omnichannel grocer, the store has to be at the heart of your strategy to win on speed and flexibility and even economics.
• 19:35
  So it's a critical thing that stores play a key role.
• 19:39
  And I think what Tesco's situation implies is they have really sat out the on demand marketplace moment until now, right?
• 19:48
  They've had their own on demand proposition in whoosh.
• 19:51
  We know Oliver have leaned in there, but until now they've not sold on Ubereats or on Deliveroo.
• 19:58
  And so when you as a retailer add a channel, you do need to prepare that there is going to be a demand influx, a surge.
• 20:08
  And so thinking about how you prepare your stores for that and the best practice that I think we've seen at tomorrow around the world is not just be ready and sequence that volume so that your stores can ingest
• 20:20
  it, but also prepare dedicated picking space for on demand fulfillment.
• 20:26
  No, Tesco does this in many cases have your highest velocity lines in a dedicated space so that your pick team, whether it's in house colleagues or gig teams, they can pick most of that volume in that space and
• 20:38
  not need to be traversing the floor and disrupting customer experience.
• 20:42
  When that's phased in right.
• 20:44
  And scaled right, we see that up to 20%, 30% of store volume can be E Com and it's not felt by the customer in a, in a bad way.
• 20:54
  And so I think that journey of how to go from sales floor picking to dedicated space picking and evolve the store itself over time is essential to having the experience.
• 21:04
  Good for associates, good for customers, good for the P and L.
• 21:07
  Yeah.
• 21:07
  And it feels like Tesco may be going through what we saw from Target just a couple of years ago, where the amount of store pick that was going through their ecom business absolutely dented the store experience for shoppers
• 21:21
  and for Delki and the team are unraveling that at the moment.
• 21:25
  But it's been a cycle.
• 21:27
  I mean Jordan, we talk sometimes about the transition from store pick model.
• 21:34
  When you reach a certain level of scale and density, the micro fulfillment works and then when you reach a certain level of scale and density and capital costs and in labor cost, then, then kind of large automated fulfillment,
• 21:46
  it kicks in.
• 21:48
  How does that progression and that logic flow change when you suddenly throw a volume of kind of gig workers, gig pickers, gig delivery that you don't have full view over the demand and you don't, you don't control the
• 22:02
  in store teams with.
• 22:05
  You do have full visibility and control over the demand.
• 22:08
  So that the nice thing is you as Tesco or a retailer do have the ability to phase up that volume and demand.
• 22:17
  And there are a number of things you can do to make the store more functional as an on demand pick space.
• 22:24
  And I'm sure Tesco team has done a lot of this.
• 22:27
  But where the gig driver enters the store for a handover or a pick, you know where they park that vehicle to do that there's all kinds of engineering decisions that can release valve some of that dent that you
• 22:41
  described on the customer experience.
• 22:43
  But there's also a very valuable maturation and progression journey that retailers go that depending on the volume of online demand, the format through which you fulfill that demand should evolve.
• 22:58
  So whether it's sales lore sub 100 orders per day to dedicated pick zone from 100 to 500 orders per day to semi automated dedicated pic zone above 500 to 1000 to maybe fully automated co located micro fulfillment beyond
• 23:15
  that thousand and that progression generally holds but it does require e common ops to be fully in sync about space allocation and wage allocation.
• 23:26
  It is not easy to land that right, but it's landable.
• 23:31
  And there may be a painful reality in the short term that there needs to be just some more investment in hours to be able to cope with all the pressures and the newfound pressure in the store which which
• 23:41
  is as we said, the implementation phase.
• 23:44
  100% you as an omnichannel operator, your store associates are your armed forces.
• 23:52
  And so I feel for Tesco because to have that kind of pain point out there means that there's a bit of misalignment.
• 23:58
  I'm sure they're going to get it fixed.
• 23:59
  They probably already do.
• 24:01
  You want the stores to want the demand to be ready to see Amazon in their crosshairs and be ready to attack with you, not against you.
• 24:09
  And so I think getting that alignment and maintaining that is what elite omni operators strive for.
• 24:16
  Okay, let's move on to headline number three.
• 24:18
  Headline number three is brought to you by Instacart Enterprise, which give grocery businesses the technology to grow online and in store with one modular platform built for how grocery actually works and built to scale with you.
• 24:32
  Learn more at company.instacart.com forward/grocertalk and headline number three features Instacart CEO Chris Rogers Supermarket News reported that Rogers opened the Grocery Shop 2026 conference last week and that he, quote, didn't hold back.
• 24:53
  And when asked what impact he thought AI would have on the customer experience in grocery, he said he believed and it's another quote, AI is going to transform grocery more than any other technology shift to date and the
• 25:09
  grocery is going to be the category out of every retail category that is most transformed by AI.
• 25:18
  Okay, John.
• 25:18
  His belief was centered around the complexity of grocery and therefore the scale of the scope that AI has to simplify it for shoppers.
• 25:28
  AI agents really were the talk of the show in Vegas last week, coming at the same Time as Amazon asking Meta to remove it from the muse AI agentic experience.
• 25:40
  So look Jordan, I know you spent last week immersed in AI as well, so really keen to explore this.
• 25:46
  I guess to start off with, do you agree with, with Chris Rogers statements here or.
• 25:51
  Or is this just a sound bite provoked from a cheeky moderator?
• 25:56
  And the answer is yes.
• 25:57
  The.
• 25:58
  The boldness is great.
• 26:00
  I absolutely love Chris taking such a strong position.
• 26:03
  And I think we have to understand he's made two statements.
• 26:06
  One of them I fully believe is accurate and one of them I think the jury's still out.
• 26:11
  Meaning when he said AI will transform grocery more than any technology that's come before it, I'm a hard yes.
• 26:21
  Okay, this is an electricity level or beyond moment.
• 26:26
  Nothing that's come before it will transform the grocery industry more than AI.
• 26:31
  And that is, I firmly believe.
• 26:35
  And so that's, I think where Chris is already spot on.
• 26:39
  And I would bet that whether grocery is transformed more than consumer electronics, pharmacy and other segments of retail, I think is the open question.
• 26:52
  The reason is because of what he said.
• 26:54
  Grocery is the most complex of retail segments with the biggest baskets, the lowest net margins and the most complexity to get done.
• 27:04
  Great.
• 27:04
  And so the question of whether grocery will change more than any industry, I believe Ben, comes down to who's changing it, because you need someone who can bring together an agentic experience that gives us the selection we need
• 27:21
  as consumers, gives us the pricing we expect, the speed we need, the personalization we need, which across a 70 item basket just is harder than a gift checkout, a fashion experience and others.
• 27:35
  And so yes, Chris, you're right.
• 27:37
  Nothing will change grocery like AI.
• 27:40
  But grocery may not be changed as much as our other sectors.
• 27:45
  It'll depend on who leads it and how good of a job they do at identifying it.
• 27:51
  Interesting.
• 27:52
  So look, let's pick up those two bits.
• 27:55
  But firstly, why are you so strongly in agreement that AI will change Grocery more than any other technology that we've seen?
• 28:06
  That's a, that's a huge statement.
• 28:08
  And you're clearly all in on this, Jordan, Tell me why.
• 28:10
  I know I don't want to make it lightly.
• 28:13
  I think we have to think back over the technology that's transformed Grocery and compare it to electricity, to compare it to the upc, compare it to automation in supply chain.
• 28:25
  And I think if you look at all of those moments that have changed what it means to be a grocery retail and shop grocery, this one legitimately has more impact and part of it, and I'm Nuancing on Chris's
• 28:39
  statement is it's not only going to transform what it means to consume, but it's also going to transform what it means to buy, plan, market and operate as a grocer.
• 28:49
  So on all sides of what it means to be in grocery, it is going to transform and we're already seeing that happen.
• 28:57
  Ben in the last 18 months, Walmart as an example has changed more more than it has in its last 72 years.
• 29:06
  It is already having that level of an effect on an organization of Walmart scale and maturity.
• 29:12
  And so no doubt this is, like I said, a once in a century or beyond technology shift.
• 29:20
  We have a firm belief that that's legit and not hyperbole.
• 29:25
  So when you say Walmart's changed more in the last 18 months, what do you mean?
• 29:30
  Give me some examples about the change that you've seen AI enable Walmart to make.
• 29:35
  I think if you speak with brand manufacturers that interact Walmart, if you look at the experience that Walmart's putting forward in its assortment, in its pricing, in its marketplace, what you'll hear and what you'll see is the average
• 29:55
  Walmart associate, particularly in the home office, is using a combination of agents and tools that allow them to do things that they were never able to do.
• 30:06
  And it is a noticeable delta and one that from John and Dave Gugina down is an absolute commitment and they call it reaching co intelligence, the ability to be co intelligent as an associate where AI and you as
• 30:23
  a team member combine to achieve things that were never possible.
• 30:27
  That is a mission and a journey that Walmart's on and at a pace that they've never been on with any of their previous transformations.
• 30:34
  So we're seeing it clearly in ways of working and we would argue from a sparky perspective, we're seeing it on the front end.
• 30:41
  They are a top three agentic commerce experience globally already, which is amazing.
• 30:50
  If you go back to the E commerce era, it took 10 years for Walmart to really get behind it and create world class experiences here.
• 30:57
  It's 10 months.
• 30:59
  Well, so on the second bit I'm going to share a few facts that came out Grocery shop last week.
• 31:05
  Jordan, I know your team was in Vegas and I know you weren't, so you might not have picked up on all of these, but there was a number of people were pushed on evidence or proof points about the
• 31:16
  impact that their AIs shopping assistants have given.
• 31:20
  So start with Kroger.
• 31:23
  We had Yale on the podcast.
• 31:25
  Yale wouldn't.
• 31:26
  Yeah.
• 31:26
  Kossad wouldn't actually give numbers.
• 31:28
  But he did say the basket size is incrementally strong across shopping assistant users and also said that they were surprised to find that adoption was relatively evenly distributed across customer segments.
• 31:44
  So we had heard that before DoorDash users said that the users of Ask DoorDash had 50% larger baskets and checked out five times quicker.
• 31:58
  And Albert Hein again, we had Albert Hein on the podcast.
• 32:00
  They said that now.
• 32:01
  So Albert Hein for people that don't know, that's our hold.
• 32:04
  Delezer's fabulous supermarket banner in the Netherlands.
• 32:08
  Market leader Netherlands said now 20% of his customers use their AI agent, which is called Stein and they spend 56% more on average than the average customer.
• 32:22
  Now the great thing is because we were able to have a conversation with SHIELD from al behind, we could probe a bit on that.
• 32:27
  And look, he acknowledged and I, I think the same maybe there with DoorDash that this is kind of correlation rather than necessarily causal because it's their biggest shoppers that are you that have adopted the technology first.
• 32:41
  So it is 50% incremental.
• 32:43
  Incrementality we've heard from a couple of people might not be solely down to the agents themselves, but I think that the common theme we were hearing from people who shared numbers and people that didn't was number one, people
• 32:57
  are spending more, not less when they use the agent because there was a concern that it would lead people to have more focus baskets and spend less.
• 33:04
  And secondly, that adoption has been universal across demographics rather than being necessarily a young or tech forward thing for people to do.
• 33:13
  John, really interested if that resonates with what you're hearing as well.
• 33:18
  It does.
• 33:19
  Thank you for sharing that Outstanding shout out to Albert Hein also, we're huge fans, incredible retailer.
• 33:25
  But also to Yale to hear Kroger talk about.
• 33:28
  I watched his session on video and the discovery that customers are actually more comfortable spending time finding items that they might not have found previously because of the AI assistance does track with what we're seeing because a good
• 33:44
  agentic layer in the experience is almost like a superhuman agent or assistant that's walking with you through the store and helping to answer questions, remove friction, find things you might not find otherwise.
• 33:59
  And so what we're finding, whether it's Omnichannel retailers or even Amazon with Alexa for shopping, that it is leading to people spending more because they're having a better experience and they're getting solutions that they might not have known
• 34:14
  were there with that retailer and might have gone to a peer.
• 34:18
  And so we Think that that will even out over time as people might not consume more just because of agentic net net but we think that share gains will probably move those that get to world class.
• 34:31
  First are we're already seeing locking in some incremental share in a way that's.
• 34:36
  Exciting and that's probably the next thing I want to touch on on this because if there was a word of the show in Vegas last week for me it was disintermediation.
• 34:47
  The number of conversations of people thinking about where will this take us if it goes too far down the agentic route are we going to see our baskets this intermediated across either marketplaces or particularly the LLMs, the super
• 35:04
  scalers.
• 35:07
  What advice are you giving to the retailers you work with about how do you where should you try to own the customer in an agency commerce world.
• 35:16
  For grocery Ben it's not just at grocery shop or retail club, it's boardrooms at retailers around the world.
• 35:25
  We probably spend more time in board sessions on this topic than anything right now.
• 35:31
  And I want to clear we call it the $1 trillion question in retail because the unknown about where the labs want to be in terms of commerce, whether they want to be marketplaces at OpenAI and Google and Anthropic
• 35:47
  or do they want to be enablers of retailers commerce experience that is a significant unknown.
• 35:54
  And so the first thing that we advise is eyes wide open unvarnished perspective that there is some risk that these labs may want to enter commerce in a way that could have a disintermediating effect.
• 36:08
  Second, control what we control which is that if as a retailer we can create world class agentic experiences in our category we have a potential to be more trusted keyword that we've already talked about today.
• 36:22
  Relevant, more personalized, more capable than a broad line.
• 36:26
  Call it, you know, a horizontal agent as Andy Jassy calls it.
• 36:30
  So the ability to create a great experience like Yale and like Tony Hsu and the team are doing that is an incredibly important step right now.
• 36:39
  And then finally to figure out how do you interface with the LLMs in a way that allows you to be discovered and there in activity but not giving up your identity in a way that allows you to keep
• 36:52
  owning that customer.
• 36:53
  So that balance of interface but not compromise.
• 36:57
  And so the path is really all of those things have to be considered and you have to create optionality in a way that doesn't lock you in to one in a way where you can't pivot.
• 37:11
  Yeah, really interesting John.
• 37:13
  I think it comes back to one of our universal rules of retail that no good ever comes if you surrender ownership of the customer customer and I think planning that through just to final this one, I know we've
• 37:24
  talked quite strategic quite often today there was a wonderful session at Grocery shop where it went really practical gentleman called Caleb Carr who looks who does all the data and back end work at Snooks Market to enable their
• 37:39
  agency tool to work.
• 37:41
  Shared a couple of pieces of advice and I think the two that were really interesting for me number one is if and this is great for the supplies and CPGs listening a lot of these tools that are springing
• 37:54
  up can only access the data that you have given to them so they the retailers can build a tool that says help me create a meal that with only so many calories proportion but if you haven't provided calorific
• 38:09
  data as part of the data that you put into the ecom system, your products will not show up in that answer.
• 38:15
  So I thought that was really interesting.
• 38:16
  The second from a retailer perspective is he said they were surprised about the systems and diversity of systems they needed to connect to make it happen because they found that one of the top questions when they first launched
• 38:28
  it wasn't how do I plan a Super bowl party or how do I feed my family for under $40?
• 38:33
  It was what time does the store open and that what that system was not connected into the agent.
• 38:40
  So I thought those two we've gone really practical from being really strategic.
• 38:43
  But I thought both of those were really interesting.
• 38:46
  All right John, I'm going to take us on to headline number four, which is brought to you by Sifter.
• 38:51
  Sifter Solutions Powerful API seamlessly integrates advanced medically tailored dietary and nutritional filtering into virtually any grocery or wellness platform.
• 39:02
  Sifter makes healthy outcomes possible.
• 39:05
  So learn more@siftersolutions.com and our fourth headline this week comes from Grocery Dive and it's more news coming out of Grocery Shop last week as Sam's Club chief merchant Myron Fraser revealed in his Grocery Shop keynote that Sam's Club
• 39:22
  has developed a scaled feedback mechanic with its members called Sam's Club Members Mark Community.
• 39:31
  Already comprising more than 200,000 shoppers, the community offers customers the opportunity to share feedback on merchandising decisions and shape the private label offer of the retailer.
• 39:42
  Any Sam's Club member can join by the app and Fraser gave examples ranging from new cookie flavors to the composition of Thanksgiving meal deal where direct feedback has changed their approach.
• 39:55
  In his keynote conversation which was with OmniTalk Retail CEO Chris Walton Fraser also said that members mark community participants feedback on other parts of the Sam's Club business like checkout experience and scan and go development.
• 40:11
  So kudos to Chris for the scoop here.
• 40:13
  Okay John, do you like this mechanic from Sam's Club or do you think in any way undermines decision making ownership of Sam's Merchants?
• 40:23
  I love it and I think it's just another signal of the continuous innovation and adaptability of this business.
• 40:31
  The origin of this is interesting Ben, because many Sams or with Sam's will know when John Furner came to Sam's Club about eight years ago, he immediately brought in a member sensitivity, a focus on member feedback that is
• 40:46
  quite present in the business.
• 40:47
  He put monitors around the Sam's Club office and in offices of merchants where there's a stock ticker type feed feed of member feedback direct from the app, direct from clubs.
• 40:59
  It created this mindset in the building that we need to stay closer to our member than anyone does in retail and really sense what she needs and expects.
• 41:09
  And so this is an incredible natural innovative evolution of that.
• 41:14
  So kudos to Myron and the team for really leveraging that to make better merchandising decisions and be faster at sensing to product than their peers are.
• 41:24
  And I think it's showing up in assortment.
• 41:26
  We're seeing really, really good progress at shelf at Sam's Club and I think it's translating to results in the business.
• 41:33
  But like he said it's not just products, it's the scan and go product has benefited from continuous feedback.
• 41:39
  The E commerce team.
• 41:40
  It's really an org wide culture of sensing member needs and reacting to them in a thoughtful way that I don't think dilutes decision making I think enhances.
• 41:51
  Oh fascinating and really interesting to hear about the screens in store.
• 41:55
  You know merchandising club stores fascinates me because every SKU has to work so hard when you only have such a limited number that is doing such volume and and you know, and ultimately Jordan, it's another core rule of
• 42:08
  retail that no bad thing will ever happen if you listen to your customers.
• 42:13
  Okay, we this has been such an interesting conversation but before we let you go we're going to do our grocer talk grab and go.
• 42:21
  So this is where we both get to share a couple of stories that have caught our eye in the world of retail in this week and beyond the big headlines of the week.
• 42:28
  But things that we think people listening should pay attention to.
• 42:31
  Are we going to do them fast?
• 42:33
  So rapid fire.
• 42:34
  Jordan, what's the first story you think we should be paying attention to and why?
• 42:38
  I would click into Yale's announcement at Grocery Shop about Kroger's AI strategy.
• 42:44
  It's really the first time a four fully articulated AI strategies come forth from Kroger.
• 42:49
  The phrase that caught our attention is grocery as a managed service.
• 42:54
  The idea that customers can decide how involved they want to be in a grocery shop.
• 43:00
  And Yale and team will provide agentic experiences that can augment that in a way.
• 43:05
  So click into that.
• 43:06
  It's worth a read.
• 43:06
  But second out of India leaked news that Amazon's putting $3 billion into its quick Commerce business in India.
• 43:15
  We know that Quick commerce had its first era and that didn't end so well.
• 43:20
  And we're now in era 2.0 and India really is the tip of the spear.
• 43:24
  And we think what Amazon does in India ends up in Ohio, ends up in London.
• 43:29
  They really are figuring out quick commerce there.
• 43:32
  So watch that battle that they're in with Flipkart and the others there and what they can take from there to export.
• 43:38
  Oh, two really interesting stories.
• 43:40
  Thank you, Jordan.
• 43:41
  And if, if you haven't, there is our interview 10 minutes with Yale where he took the costet from Kroger where he discusses it is on the Grocer Talk feed.
• 43:49
  Now look, I'm going to throw two back at you.
• 43:52
  Firstly, there was a whole series of announcements from Instacart last week about new marketplace partners.
• 44:00
  There was an innovative North America wide deal with Airbnb to bring groceries to holiday makers which is a lot of flight fun.
• 44:08
  There's an interesting deal with Gopuff which brings them as well as onto the Marketplace but onto the Carrot Ads retail media platform.
• 44:16
  But the one that I found really striking is the news that Dollar General Nationwide will join Instacart's marketplace and it's doing this with no price markups.
• 44:28
  So going back to our earlier conversation about agentic and about price transparency, I think for all other grocers operating catchments, I think that's one to pay attention to.
• 44:38
  The other one for me it's a story that I've been tracking, Jordan.
• 44:42
  It's about it's the sale of Tesco Central European operations.
• 44:47
  So that's exiting from Hungary, Slovakia and the Czech Republic.
• 44:52
  This week we had reporting from Supermarket News that there are three interested parties, all of which I find intriguing.
• 44:59
  So the first is Ajo Delez, so he's got a great business in Czechia with Albert.
• 45:04
  But the other two, Geographies would be New Lidl, which is also present already in the region, and the third is Bedronka.
• 45:12
  Now Beadronka is a fantastic Polish discount chain owned by Giorno Martin, the the Portuguese group.
• 45:21
  Now to date almost the entirety of the Be Drunk cooperation has been focused on Poland.
• 45:25
  They have a couple of stores now in Slovakia, but this would be significant geographic expansion.
• 45:32
  So that is one that I am going to keep a very close eye on.
• 45:37
  And that brings us to the close Today's podcast was produced with the help and support of LSA and is brought to you exclusively as part of the Omnitalk Podcast Network.
• 45:48
  Omnitalk exists to highlight the trends, technologies and innovations shaping retail and Grocertalk now does this specifically for the global grocery and CPG industry.
• 45:59
  Thanks as always for listening in and please remember to like and leave us a review wherever you happen to listen to your podcast or on YouTube.
• 46:07
  And you can follow us today simply by going to YouTube.com omntalkretail Jordan if people listening have enjoyed your input, I'm sure they will have done and want to get in touch with you.
• 46:20
  What's the best way for them to find you and to contact Ben thank you.
• 46:24
  TomorrowRetail.com is a great place to go.
• 46:27
  Me and tomorrow on LinkedIn is a great place to follow and we are like you typically out and about.
• 46:33
  So any event that you're at, look for us.
• 46:35
  We'd love to connect.
• 46:37
  Fantastic.
• 46:38
  So until next week, on behalf of all of us at Grocertalk and Omnitalk Retail, thanks for tuning in.