Latest / Bloomberg Intelligence / BI Weekend: Delta Earnings, Google-Apple Deal, Lululemon Outlook

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BI Weekend: Delta Earnings, Google-Apple Deal, Lululemon Outlook · Bloomberg Intelligence

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Speaker 5: I'm Scarlettfoo and I'm Alexandra Semenova fill in for Paul Sweeney.
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Speaker 2: On today's Bloomberg Intelligence Show. We dig inside the big
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Speaker 5: Each and every week, we provide in depth research and
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Speaker 5: data on some of the two thousand companies and one
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Speaker 5: hundred and thirty industries are analysts cover worldwide.
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Speaker 2: Today, we'll look why the athletic apparel company Lulu Lemon
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Speaker 2: sees signs of a rebound in the fourth quarter.
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Speaker 5: Plus a look at why the tech giant Meta is
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Speaker 5: beginning to cut more jobs at its reality Labs division.
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Speaker 2: But first we begin with the aerospace industry.
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Speaker 5: This week, Delta Airlines reported fourth quarter earnings that missed
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Speaker 5: Wall Street's expectations. The company also said it will be
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Speaker 5: taking a more cautious view for twenty twenty six.
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Speaker 2: For more, Alex and I were joined by George ferguson
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Speaker 2: Bloomberg Intelligence Senior Aerospace, Defense and Airlines analyst.
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Speaker 5: We first asked George for his take on Delta's recent earnings.
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Speaker 6: Really, what we saw here from Delta was a continuation
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Speaker 6: of the you know, the premium and the loyalty revenue
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Speaker 6: are rolling in strongly, rolling in I think sort of
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Speaker 6: five to seven percent if I recall correctly, you know
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Speaker 6: above sort of GDP growth rates.
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Speaker 4: But the back of the airplane, you know.
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Speaker 6: They call it the main cabin or bas the economy
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Speaker 6: that's there was that revenue was down seven percent and
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Speaker 6: a quarter where Delta was growing a couple percent. And
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Speaker 6: so I think we still see this premium trend, and
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Speaker 6: I think we're going to see a lot of growth in.
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Speaker 4: Premium seats this year.
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Speaker 6: We've got Southwest converting to some you know, to more
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Speaker 6: of a full service carriers premium. Delta plans to go premium,
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Speaker 6: United plans to go premium. Alaska Jet Blue, everyone wants
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Speaker 6: to go premium. So I think there's probably some concern
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Speaker 6: in the marketplace that maybe premium gets crowded and pushes
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Speaker 6: closer to that main cabin kind of kind of fair
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Speaker 6: rather than main cabin coming up.
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Speaker 5: Delta said they're bracing for risk to their forecast, noting
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Speaker 5: the geopolitical environment, whether it's international or domestic POLICI ge
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Speaker 5: or is this unusual for them to issue this kind
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Speaker 5: of morning Well, I mean.
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Speaker 6: Again, I think we're at the beginning of the year,
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Speaker 6: and management teams like the caveat things right, and so
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Speaker 6: I guess what I would say is we had plenty
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Speaker 6: of geopolitical challenges in twenty twenty five. You know, we
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Speaker 6: were watching transit demand closely because you've got a war
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Speaker 6: raging in Ukraine's been doing that for a bunch of
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Speaker 6: years now. Didn't seem to slow down that demand. That
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Speaker 6: demand seemed to do okay some days. I wonder if
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Speaker 6: there maybe there's more risk domestically, right. One of the
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Speaker 6: other things we're watching is the President wants to cap
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Speaker 6: interest rates for the credit card companies at ten percent.
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Speaker 6: Loyalty through the MX program brings a lot of money
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Speaker 6: in for Delta, definitely a source of their competitive advantage.
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Speaker 6: And I think if you're capping interest rates, I think
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Speaker 6: some of those credit card programs have to change and
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Speaker 6: that would hurt some of those loyalty programs. So there's
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Speaker 6: I mean, there's risk all over the place all the time. Again,
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Speaker 6: the geopolitical didn't seem to hurt demand as much as
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Speaker 6: we would expect it in twenty twenty five.
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Speaker 2: Right, It kind of always threatens to hurt demand, but
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Speaker 2: in the end, people still prioritize traveling and paying for traveling.
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Speaker 2: One of the comments from Delta was that the airline
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Speaker 2: industry could see consolidation in twenty twenty six. Which players
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Speaker 2: would that most likely involved.
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Speaker 6: Yeah, so we're already starting to see some of that, right.
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Speaker 6: We had an announcement the other day that Allegiance and
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Speaker 6: Sun Country are going to put themselves together. They're two
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Speaker 6: smaller low cost airlines, some of them pretty quickly growing there,
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Speaker 6: quickly growing, so they'll consolidate. Uh, you know, we've heard
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Speaker 6: discussion about Frontier potentially buying Spirit Airlines. We still have
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Speaker 6: to see, you know, the ultimate outcome for Spirit yuring
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Speaker 6: Chapter eleven. We're trying to figure out what their structuring
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Speaker 6: looks like the second time they've been there.
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Speaker 4: So you can see on the edges.
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Speaker 6: Especially where in that low cost marketplace, you can see
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Speaker 6: consolidation beginning.
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Speaker 4: It takes a long.
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Speaker 6: Time and that's the challenge, but you can see some
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Speaker 6: of that consolidation already begin. We don't see the big
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Speaker 6: players getting consolidated, but you're not You're not going to
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Speaker 6: put together. I think you're not going to see sort
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Speaker 6: of a united to Delta and America and the Southwest.
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Speaker 6: They're not going to We're not gonna put an any
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Speaker 6: of those together. I think that's too much, but I
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Speaker 6: think a lot of other stuff is potentially in play.
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Speaker 4: George.
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Speaker 5: We also got news that Delta is ordering thirty Boeing
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Speaker 5: seven eighty seven Dreamliner jets, aiming to boost the company.
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Speaker 5: How much do you expect this purchase to impact its
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Speaker 5: bottom line?
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Speaker 6: Yeah, so they're not going to see these airplanes until
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Speaker 6: twenty thirty, so it's a bit of a ways away.
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Speaker 6: They're replacing seven six sevens, which are old airplanes. We
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Speaker 6: have an average age of them about twenty seven years
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Speaker 6: right now, you know the seven eight is going to
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Speaker 6: be a lot more efficient. Delta gave some numbers they
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Speaker 6: fifteen ish plus percent more efficient, so I think that
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Speaker 6: really helps the bottom line. Also very interesting to us
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Speaker 6: is that Delta is traditionally more of an air bus shop.
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Speaker 6: They buy a lot of Airbus product. The recent wide
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Speaker 6: bodies they've bought. Our airbus is a three fifty and
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Speaker 6: air buses a three thirty. Again, the Boeing wide bodies
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Speaker 6: told you twenty eight ish years old. Interesting to see
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Speaker 6: them come in for the seven eighty seven. That's really,
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Speaker 6: I think, been a category leader in that small narrow
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Speaker 6: body world. Boeing has over one thousand orders for that airplane.
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Speaker 6: We see rates continued to rise, which to improve profitability at.
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Speaker 4: Boeing as they put more through put in that seven eight.
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Speaker 6: I thought it was a bit of an endorsement for
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Speaker 6: seven eight, even though Delta is not going to say that.
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Speaker 2: Probably our thanks to George Ferguson, our senior Aerospace, Defense
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Speaker 2: and Airlines analyst.
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Speaker 5: This week we focused on a Bloomberg Big Take story
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Speaker 5: titled the CEO Playbook to Navigating Trump. You can find
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Speaker 5: it on Bloomberg dot Com and the Terminal.
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Speaker 2: So the story looks at how public feuds and protectionist
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Speaker 2: threats have turned CEO's dealings with the White House into
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Speaker 2: a high stakes game of loyalty and leverage.
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Speaker 5: And for the story, Bloomberg News recently spoke to experts
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Speaker 5: and business leaders on how CEOs should navigate Trump's second term.
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Speaker 2: For more on all of this, we were joined by
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Speaker 2: one of the Big Takes authors, Matthew Boyle, Bloomberg Senior
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Speaker 2: Management reporter.
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Speaker 5: We first asked Matt to break down some of the
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Speaker 5: challenges faced while interviewing CEOs for the story.
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Speaker 7: I mean the usual sort of voices of Corporate America,
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Speaker 7: the Chamber of Commerce, the Business Roundtable. We're just like,
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Speaker 7: you know, we're going to take a pass on this one,
7:16
Speaker 7: and just about every CEO under the sun, you know,
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Speaker 7: just they just don't want to go there. It's like
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Speaker 7: the third rail. So it was challenging to report, but
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Speaker 7: we had a lot of great conversations, let's say, on background,
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Speaker 7: with those who are advising CEOs, and that led to
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Speaker 7: our playbook. Here the five rules for dealing with the
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Speaker 7: Trump Madness.
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Speaker 5: Matt We've seen a growing number of business leaders recently
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Speaker 5: kind of push back more than usual on some of
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Speaker 5: President Trump's policy proposals. We had City CFO this morning
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Speaker 5: pushing back on the credit card cap. X On Mobile
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Speaker 5: CEO calling Venezuela an investable. Is this unusual in what
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Speaker 5: might be the consequences for them?
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Speaker 7: Yeah, it takes a certain CEO to push back. It
7:54
Speaker 7: takes a Jamie Diamond or the CEO of ex On Mobile,
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Speaker 7: who have the clout and the authority and the industry
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Speaker 7: backing to say no, you know, this is actually not
8:02
Speaker 7: perhaps a good idea. But most of the time, as
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Speaker 7: we saw with tariffs, it was happening behind the scenes.
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Speaker 7: You remember, this is going back aways. But when Trump
8:11
Speaker 7: told the Walmart CEO, Doug McMillan to eat the tariffs,
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Speaker 7: Walmart said nothing, and that was probably pretty wise. There
8:18
Speaker 7: was no reason to get into a public spat on
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Speaker 7: true social with Trump. So but now maybe it's because
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Speaker 7: Trump is in a different position twelve months later, or
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Speaker 7: it's the issues involved. You know, banking CEOs are very
8:30
Speaker 7: happy to go out against interest ratecaps, but we are
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Speaker 7: seeing in certain cases some CEOs pushed back.
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Speaker 2: Yes, and direct engagement does seem to pay off if
8:39
Speaker 2: you can find your way to the President's mobile phone,
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Speaker 2: which apparently he pans out the number pretty willingly to
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Speaker 2: certain top CEOs. You talk about in videos Jensen Huang
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Speaker 2: having a direct line to the president. Also Lipboon tam
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Speaker 2: of Intel being able to do that as well.
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Speaker 4: Exactly.
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Speaker 7: I mean Jensen in video ceo one on Joe in
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Speaker 7: December and said, you know, Trump is extraordinarily accessible. The
9:04
Speaker 7: United Airline ceo said the same thing to us. I mean,
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Speaker 7: you can call this man up. He does answer his
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Speaker 7: cell phone, as we've seen sometimes at four thirty in
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Speaker 7: the morning he will pick up his cell phone. But
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Speaker 7: not everybody has Trump on speed dials. So a point
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Speaker 7: of our story was that you have to find a
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Speaker 7: way in, whether that's Susie Wiles, a chief of staff,
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Speaker 7: whether it's Scott Besson, Treasury or Commerce, Howard Lutnick, or
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Speaker 7: one of the sort of lower level aids. Also, I
9:28
Speaker 7: mean we found that, you know, the director of the
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Speaker 7: White House Office of Public Liaison is somebody you can
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Speaker 7: you can go to also, So the point is to
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Speaker 7: find a way in, no matter how you do it.
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Speaker 5: Matt, what are some of the differences in how President
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Speaker 5: and Trump deals with business leaders in his second term
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Speaker 5: from his first term.
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Speaker 7: Well, the second term, he's a little bit more unshackled.
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Speaker 7: Let's say, in the first term, you had a few
9:51
Speaker 7: more traditional Republican voices. You know, you had Rex Tillerson
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Speaker 7: in there and other folks who you know, were able
9:58
Speaker 7: to maybe play a little defense. They were able to
10:00
Speaker 7: slow walk some of Trump's more outrageous policy proposals. Now
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Speaker 7: it's just all true believers. So he's sort of unfettered.
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Speaker 7: He's unshackled, and there's really not many checks. So what
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Speaker 7: this means for CEOs is, yeah, they really can't hide.
10:15
Speaker 7: They can't just say well, we'll let our industry association
10:18
Speaker 7: take care of this or don't worry. I mean, look
10:20
Speaker 7: at just the past week, what's been going on. CEOs
10:23
Speaker 7: really need to be on watch.
10:25
Speaker 5: Yeah, shackles is a fantastic word, a free range Trump right,
10:28
Speaker 5: here we go, There we go.
10:30
Speaker 2: The other thing that you could do, if you're trying
10:32
Speaker 2: to get his attention or curry favor, is to give
10:34
Speaker 2: him a made up award.
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Speaker 7: Yes, he does respond to these types of trinkets and trophies,
10:41
Speaker 7: as we've seen with the Apple CEO, Tim Cook was
10:44
Speaker 7: able to give him this sort of glass you know,
10:46
Speaker 7: trophy with a twenty four carrot gold base or something,
10:49
Speaker 7: you know, with the Apple logo on it. And you know,
10:51
Speaker 7: guess what, you know, it was over tariffs and Cook
10:54
Speaker 7: Apple we're looking for some relief on foreign microchip tariffs.
10:58
Speaker 7: So and you know that helped. It also helped though
11:01
Speaker 7: that Cook had really put in the work though, talking
11:03
Speaker 7: to Trump for years now, going back to the first administration,
11:06
Speaker 7: so you can't just you know, sort of throw a
11:08
Speaker 7: trophy at him. But it does take some groundwork as well.
11:11
Speaker 7: But look at the Swiss business executives also giving him
11:13
Speaker 7: a you know, a gold rolex and you know, so
11:16
Speaker 7: these things do tend to have an impact. As we say,
11:19
Speaker 7: everything is a transaction with this president.
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Speaker 5: Matt, you mentioned it's been difficult getting people to speak
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Speaker 5: to you for this story. Did any of the business
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Speaker 5: leaders you spoke to give you reasoning for why they
11:30
Speaker 5: might be afraid to talk or did they kind of
11:32
Speaker 5: just brush you off?
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Speaker 7: It's I mean, many brush us off through their gatekeepers.
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Speaker 7: They just the thing is, they just don't see much upside.
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Speaker 7: They don't want to be the one CEO talking to
11:41
Speaker 7: any reporter on the record. But as we've seen now,
11:44
Speaker 7: maybe we might see some more come out of the
11:45
Speaker 7: woodwork now that Diamond and others are talking about, you know,
11:49
Speaker 7: the interest rates. The defense companies also might have something
11:53
Speaker 7: to say about Trump pressuring them to, you know, to
11:55
Speaker 7: up their game.
11:57
Speaker 4: So we'll see.
11:58
Speaker 7: But it's that you know, CEO is a yea, and
12:00
Speaker 7: that they might be speaking out on certain issues, but
12:02
Speaker 7: when it comes to Trump again, they just fail to
12:05
Speaker 7: see the upside. But at this point, as we say,
12:08
Speaker 7: or it was a Yale School of Management person wrote
12:11
Speaker 7: in Bloomberg Opinion, the chaos is not just no longer
12:14
Speaker 7: in the background. The chaos is baked in. It's in
12:17
Speaker 7: the system. It's coming for them. So they might want
12:20
Speaker 7: us talk.
12:20
Speaker 2: Yeah, it's front and center, and it feels in many
12:22
Speaker 2: ways like those who know how to navigate governments and
12:25
Speaker 2: emerging markets might be better positioned.
12:27
Speaker 8: Yea.
12:27
Speaker 7: So you have that experience exactly, you know, of that
12:30
Speaker 7: sort of slightly more chaotic, slightly more free wheeling environments,
12:33
Speaker 7: and many of these big multinationals, of course, do operate
12:36
Speaker 7: in those areas.
12:37
Speaker 2: Our thanks to Matthew Boyle Bloomberg senior management reporter, coming
12:41
Speaker 2: up a look at why the tech giant Nvidia and
12:43
Speaker 2: the pharmaceutical company Eli Lilly are partnering up. You're listening
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Speaker 2: to Bloomberg Intelligence on Bloomberg Radio, providing in depth research
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Speaker 2: and data on two thousand companies and one hundred thirty industries.
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Speaker 5: You can access Bloomberg Intelligence via Big on the terminal.
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Speaker 5: I'm Alexandra Semenova.
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Speaker 2: And I'm Scarlett Foo is Bloomberg.
13:05
Speaker 1: This is Bloomberg Intelligence with Scarlet Foo and Paul Sweeney
13:09
Speaker 1: on Bloomberg Radio.
13:12
Speaker 5: I'm Scarlettfou and I'm Alexandra Semenova filling in for Paul Sweeney.
13:15
Speaker 2: We moved to some news in big tech this week.
13:18
Speaker 5: Alphabet's Google confirmed that it has entered a multi year
13:21
Speaker 5: deal with Apple.
13:22
Speaker 2: This will allow Alphabet to power the iPhone maker's artificial
13:25
Speaker 2: intelligence technology, including the Serie voice assistant.
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Speaker 5: We reported late last year that the two companies were
13:31
Speaker 5: finalizing such a deal, with Apple planning to pay about
13:34
Speaker 5: one billion dollars a year.
13:35
Speaker 2: For more on this, we're joined by Ano Agrana, Bloomberg
13:37
Speaker 2: Intelligence technology analyst.
13:39
Speaker 5: We first asked Ana rog about the specific advantages Google
13:43
Speaker 5: brings to Apple with its Gemini models.
13:45
Speaker 9: Now we go back in history. Apple doesn't have that
13:49
Speaker 9: big of their own foundational model on which it's running
13:53
Speaker 9: or it's supposed to run some of these technologies. But
13:56
Speaker 9: Apple and Google go back long way. They have a
13:59
Speaker 9: very very good agreement on search, which pays Apple billions
14:04
Speaker 9: of dollars. So you know, there was some legal issue
14:07
Speaker 9: around it. So we always knew that once that legal
14:10
Speaker 9: issue goes away, Apple may be working closely with Google
14:13
Speaker 9: to basically outsource a lot of their foundational models into
14:17
Speaker 9: the technology that they have.
14:18
Speaker 4: They have.
14:19
Speaker 9: Now it's possible that the next CD upgrade, which is
14:22
Speaker 9: most likely going to be in the March April timeframe,
14:26
Speaker 9: could be that one big moment that we are all
14:28
Speaker 9: looking for Apple to finally come out and say that, okay,
14:31
Speaker 9: you know we are not a laggard in AI, that
14:33
Speaker 9: they also have a product that's pretty good.
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Speaker 5: Ana rag I saw a tweet actually from the official
14:38
Speaker 5: Google account announcing this deal, and Elon Musk replied. He
14:42
Speaker 5: said that this seems like an unreasonable concentration of power
14:46
Speaker 5: for Google obviously has a vested interest here, given you know,
14:51
Speaker 5: his participation in XAI, but does he have a point,
14:54
Speaker 5: what are the regulatory risks around this deal?
14:57
Speaker 9: Yeah, I mean he won't have a point if his
14:59
Speaker 9: model been used at that point. So I mean everybody
15:02
Speaker 9: is trying to pitch Apple to use that model. But
15:05
Speaker 9: you know, at the end of the day, Apple actually,
15:07
Speaker 9: for the first time, if you go back a year
15:10
Speaker 9: and a half ago, they used open ai. I mean
15:12
Speaker 9: you can still use open ai when you go to
15:14
Speaker 9: Syria and ask a question and it can take you
15:16
Speaker 9: out of there. But for Apple, it has to be
15:19
Speaker 9: integrated within the iOS, within the software, but they won't
15:24
Speaker 9: do it to an outside vendor where they don't control
15:27
Speaker 9: the data. So what Apple's going to do here, They're
15:30
Speaker 9: going to use the foundational models from Google, but they're
15:32
Speaker 9: going to run a lot of that either on the
15:34
Speaker 9: device or their own private, private cloud data centers, which
15:38
Speaker 9: means they will still protect the privacy of that question
15:42
Speaker 9: and not let it have you know, access to other
15:44
Speaker 9: players as well.
15:45
Speaker 2: Yeah, the privacy angle is really big for Apple. It's
15:47
Speaker 2: kind of its mark of distinction here among the big
15:50
Speaker 2: tech players.
15:51
Speaker 5: An rag.
15:52
Speaker 2: Apple has seen this exodus of talent AI talent going
15:56
Speaker 2: to other big tech companies in recent months. Does this
15:59
Speaker 2: small year deal with alphabet, with Google change any of that.
16:04
Speaker 2: Does that stanch the bleeding at all?
16:07
Speaker 4: Yeah?
16:07
Speaker 9: For me, it does only because I am now buying
16:10
Speaker 9: the model outright from somebody who's doing all the hard work.
16:13
Speaker 9: So I'm not in the business of model development. If
16:16
Speaker 9: I can use the best model that's out there into
16:18
Speaker 9: my product and I pay them some money, and the
16:21
Speaker 9: humor amount is about a billion dollars a year, which is,
16:24
Speaker 9: to be honest, nothing compared to how many billions these
16:27
Speaker 9: companies are spending to come up with their own large
16:30
Speaker 9: language model. And that's what actually Apple said in the
16:33
Speaker 9: search case and says, I'm not in the search business.
16:36
Speaker 9: If Google has the best search, I will outsource that
16:38
Speaker 9: technology into my products from them.
16:40
Speaker 2: Are thanks to Honor Agrana, bi's technology analyst.
16:43
Speaker 5: We move next to news from the athletic apparel company
16:46
Speaker 5: Lululemon Athletica.
16:48
Speaker 2: This week, Lululemon said it's fourth quarter sales would land
16:51
Speaker 2: at the higher end of its twenty twenty five guidance.
16:53
Speaker 5: It's a sign that the yoga war company is regaining
16:56
Speaker 5: some momentum following a series of disappointing results.
16:59
Speaker 2: For more, Alex and I were joined by Punam Goyel,
17:01
Speaker 2: senior US e Commerce and retail analyst.
17:04
Speaker 5: We first asked Poonam to break down how the company's
17:06
Speaker 5: turnaround is going.
17:08
Speaker 10: So, the loyalty program is not something that Lulu Lemon
17:11
Speaker 10: has had for a long long time, but it does help,
17:15
Speaker 10: just like with any other loyalty program. You know, it
17:18
Speaker 10: gives you perks. You have access to Lulu Lemon merchandise,
17:22
Speaker 10: who have access to Lulu Lemon events, etc. And it
17:25
Speaker 10: does bring the member who enjoys the lul Lemon experience
17:29
Speaker 10: to keep coming back. It's an added reward for those
17:33
Speaker 10: who have been loyal to the company. But make no mistakes,
17:37
Speaker 10: that is not what's going to drive the turnaround. Their
17:40
Speaker 10: turnaround needs a lot more than that.
17:42
Speaker 2: Yeah, I mean, loyalty programs are something that most brands
17:46
Speaker 2: have and Lula Lemon has some more structural issues when
17:49
Speaker 2: it comes to Lululemon. Separate from the loyalty program, Lulu
17:52
Speaker 2: has pre announced fourth quarter sales and it comes in
17:55
Speaker 2: at the higher end of its guidance. This is kind
17:57
Speaker 2: of surprising because Lulua Lemon has struggled to connect with
18:00
Speaker 2: choppers the last couple of quarters.
18:03
Speaker 10: Yes, you can say that it's surprising, but at the
18:05
Speaker 10: end of the day, the sales are still down. The
18:08
Speaker 10: estimate was for sales to be down negative one to
18:10
Speaker 10: three percent, so maybe you're close to minus one. That's
18:13
Speaker 10: still not where we expect Lemon to be. This doesn't
18:17
Speaker 10: tell me that the turnaround is you know, has started
18:21
Speaker 10: and is underway and things will begin to improve quarter
18:24
Speaker 10: after quarter. I think it's good, but I need a
18:27
Speaker 10: lot more to be confident that the turnaround will begin
18:30
Speaker 10: to take place.
18:32
Speaker 5: What are some of the macroeconomic trends that are driving
18:35
Speaker 5: Lululemon's customer base. Is it inflation? Is it just an
18:39
Speaker 5: overall change in discretionary spending patterns?
18:42
Speaker 2: What is it?
18:43
Speaker 10: Yeah, so the macro economy has been you know, good
18:46
Speaker 10: and bad. The luxury consumer has been doing well Lemon.
18:50
Speaker 10: You could argue SIT's in the affluent space of active wear.
18:54
Speaker 10: But that said, it's not that the customer is frushured
18:57
Speaker 10: and that's why their sales have fallen. It is that
19:00
Speaker 10: they have lacked innovation and execution has been weak. So
19:04
Speaker 10: the key here is a company specific issue that they
19:08
Speaker 10: need to resolve, and they are working towards it. We
19:11
Speaker 10: will be getting a new CEO hopefully at some point
19:13
Speaker 10: in twenty twenty six, and it'll really be then where
19:17
Speaker 10: we can see who comes in, what's the strategy, and
19:20
Speaker 10: how does lul Lemon re engage. It's for a customer
19:24
Speaker 10: that probably still loves the brand but just hasn't found
19:27
Speaker 10: enough new to keep going back and back.
19:30
Speaker 4: Yeah.
19:30
Speaker 2: Absolutely. I think about the competitors that Lulu Lemon faces
19:33
Speaker 2: in the space. It ranges from Dorry to all the
19:38
Speaker 2: other big names out there, including Nike, which offers perhaps
19:41
Speaker 2: similar at leisure wear but at a lower price point too.
19:44
Speaker 2: When it comes to this new CEO, Calvin MacDonald, the
19:46
Speaker 2: current c is set to a step down, and I
19:48
Speaker 2: know Elliott has been a big player in pushing for
19:51
Speaker 2: Jan Nielsen, the former CFO at Ralph Lauren, to replace him.
19:55
Speaker 2: What's the latest on that. Do we presume that Jane
19:58
Speaker 2: Nielsen is going to be the next CEO?
20:01
Speaker 10: I mean we don't know yet right so it's definitely
20:03
Speaker 10: one of the contenders and could be. And I think
20:06
Speaker 10: as long as they get a product led executive, which
20:09
Speaker 10: he is, Little Lemon could be in good hands to
20:12
Speaker 10: continue this turnaround.
20:14
Speaker 2: Founder Chip Wilson is also kind of involved here, that's
20:17
Speaker 2: another name that we haven't heard from in a while.
20:19
Speaker 2: He founded the company. He no longer sits on the board,
20:22
Speaker 2: but he still owns about nine percent of the stock.
20:25
Speaker 2: How much do you pay attention to what he says?
20:28
Speaker 10: We definitely look at it. Look what he said was important.
20:30
Speaker 10: He founded the company. The company was grounded on innovation,
20:34
Speaker 10: on products, and I think he makes fair points that
20:38
Speaker 10: the company needs to kind of really re engage with
20:42
Speaker 10: the customer and go back to its roots, which is,
20:45
Speaker 10: are you still ahead of the competition? Like you know
20:47
Speaker 10: you mentioned earlier, competition has increased, and it has, but
20:51
Speaker 10: competition was always there. But where is Little Lemon ahead
20:54
Speaker 10: of it? Can you get similar at leisure pants or
20:57
Speaker 10: leggings at Vory or at Aloe or at Latta? How
21:01
Speaker 10: does Little Lemons stand out today? And that's the big
21:04
Speaker 10: question that they need to answer.
21:06
Speaker 2: Our thanks to put Im Goyel, senior US e Commerce
21:08
Speaker 2: and retail analysts at Bloomberg Intelligence.
21:10
Speaker 5: We move next to the biotech space.
21:12
Speaker 2: And this week tech Giant and Nvidia announced plans to
21:15
Speaker 2: invest a billion dollars over five years in a new
21:18
Speaker 2: AI lab. And that's with the pharmaceutical company Eli Lilly
21:21
Speaker 2: for more on this.
21:22
Speaker 5: We were joined by Sam Fazzelli, Bloomberg Intelligence, Director of
21:25
Speaker 5: Research for Global Industries and senior pharmaceuticals analysts.
21:29
Speaker 2: We started off by asking Sam to break down the
21:31
Speaker 2: latest news at ELI Lilly.
21:33
Speaker 11: Well, look, I think these are the brillion dollar club
21:36
Speaker 11: getting together. A billion dollars is probably dropping the ocean
21:39
Speaker 11: for both of them. It's over five years. And what
21:43
Speaker 11: I think the aim of this, at the end of
21:45
Speaker 11: the day is to try and automate and speed up
21:48
Speaker 11: as much of the partly the drudgery of doing lab work,
21:52
Speaker 11: because lab work just like as if you were a
21:54
Speaker 11: doctor in a clinical setting, you need to take a
21:58
Speaker 11: lot of notes, a lot of detail. But at the
22:00
Speaker 11: same time, I think they're investing in what appears to
22:04
Speaker 11: be automating twenty four to seven experiments, things that human
22:08
Speaker 11: beings just can't do. And I know, having been a scientist,
22:12
Speaker 11: that sometimes your life is on hold because you have
22:14
Speaker 11: to go back and deal with your experiments, yoursells, or
22:18
Speaker 11: whatever it is that you're running. So a lot of
22:20
Speaker 11: these things I think could speed up and also make
22:22
Speaker 11: the life of the scientists a little bit easier at
22:25
Speaker 11: the end of the day, though I think the am
22:27
Speaker 11: here is to try and get scientific discoveries translated to
22:31
Speaker 11: drugs quicker and get them to market quicker.
22:34
Speaker 5: Sam, What does this mean for Eli Lilly's rivals? Do
22:37
Speaker 5: you expect that we'll see some of its competitors also
22:39
Speaker 5: ramp up their AI endeavors given its partnership with the
22:42
Speaker 5: company like Nvidia.
22:44
Speaker 11: Pretty much all pharma companies. And I just want to
22:47
Speaker 11: point you to a recent survey that EI Bloomberg Intelligence
22:50
Speaker 11: has done that looked at ten different industries, one of
22:54
Speaker 11: which being the pharmaceutical industry. Ask executives, what are you
22:58
Speaker 11: doing with this? What are you trying to get to?
23:00
Speaker 11: What is the aim? At the end? Everybody is at this.
23:03
Speaker 11: This is not something specific to Lily. And you know, Google,
23:07
Speaker 11: for example, has has through deep Mind, has created an
23:11
Speaker 11: agentic KI called Google Scientists. It's like, I think four
23:15
Speaker 11: agents or five agents who interact with each other and
23:17
Speaker 11: check each other's hypothesis. So a lot of this is
23:20
Speaker 11: going on in all companies, but of course here we
23:22
Speaker 11: have Lily, one of the richest farmer companies around in
23:26
Speaker 11: terms of the amount of cash blow that is got
23:28
Speaker 11: really being able to spend the money without really impacting it.
23:33
Speaker 11: It's balance sheet and cash flow, and I'm pretty sure
23:36
Speaker 11: everybody's at this, but clearly this is the news, doujou if.
23:40
Speaker 2: You like, absolutely, Like you said, it's a drop in
23:43
Speaker 2: the bucket for both of these companies. But when you
23:44
Speaker 2: have a number like one billion dollars and these big
23:47
Speaker 2: brand names, it gets people's attention. What also gets my attention, Sam,
23:51
Speaker 2: is Maderna. Maderna obviously one of the vaccine makers during
23:55
Speaker 2: the pandemic, but it's had a rough go at it
23:59
Speaker 2: recently because it's so dependent on these vaccines and we
24:03
Speaker 2: have an administration that is kind of anti vaccine right now.
24:06
Speaker 2: Yet madernal pre announced at the JP Morgan Healthcare conference
24:09
Speaker 2: that is the US COVID business did better than expected.
24:12
Speaker 2: Is Madernas starting to stabilize, Well.
24:16
Speaker 11: One would hope. So they've stuck with their aim of
24:21
Speaker 11: growing twenty twenty six point ten percent. But you know,
24:24
Speaker 11: if you look back at the beginning of the year,
24:26
Speaker 11: where the company in twenty twenty five started with guidance
24:31
Speaker 11: and where we ended up, we're a good five six
24:33
Speaker 11: hundred million dollars short of what the hope was at
24:36
Speaker 11: the beginning of the year. So everybody, I thinking knows
24:39
Speaker 11: that this is a very difficult market to call for
24:41
Speaker 11: exactly the reasons you just highlighted. There is a constant
24:44
Speaker 11: change in the way that the administration in the US,
24:47
Speaker 11: and not just the US elsewhere is also dealing with vaccination,
24:51
Speaker 11: particularly in the COVID side of things. Other vaccinations are
24:55
Speaker 11: still pretty much well settled and at least outside the US.
25:00
Speaker 11: Problem also that MODERNA is going to face or has
25:03
Speaker 11: been facing, is that there are lots of people. There's
25:06
Speaker 11: I think my patent colleagues say that at least twenty
25:09
Speaker 11: various directions of legal cases or trials going on different
25:13
Speaker 11: groups saying you're infringing my patents, so you've fringe my
25:16
Speaker 11: patents and you need to because there was billions and
25:18
Speaker 11: billions of dollars of revenues. So some of that is
25:22
Speaker 11: coming potentially in the March timeframe, very lightly against a
25:28
Speaker 11: trial coming up against our Bridges, another company that's listed
25:31
Speaker 11: in the US. So some of that is I think
25:33
Speaker 11: something that might keep people from getting too excited.
25:36
Speaker 5: Our Thanks to Sam Fazzelli, Bloomberg Intelligence Director of Research
25:40
Speaker 5: for Global Industries and senior pharmaceuticals analyst, coming up all
25:43
Speaker 5: look at how artificial intelligence is changing shopping.
25:46
Speaker 2: You're listening to Bloomberg Intelligence on Bloomberg Radio, providing in
25:49
Speaker 2: depth research and data on two thousand companies and one
25:52
Speaker 2: hundred and thirty industries.
25:54
Speaker 5: You can access Bloomberg Intelligence via big on the terminal.
25:57
Speaker 5: I'm Alexandra Semenova and I'm Scarlett Foo. This is Bloomberg.
26:09
Speaker 1: This is Bloomberg Intelligence with Scarlet Foo and Paul Sweeney
26:14
Speaker 1: on Bloomberg Radio.
26:16
Speaker 2: I'm Scarlet Foo.
26:17
Speaker 5: And I'm Alexandra Semenova filling in for Paul Sweeney.
26:20
Speaker 2: We move now to some news in the tech space.
26:22
Speaker 5: This week, we heard that the tech giant Meta Platforms
26:25
Speaker 5: is beginning to cut more than a thousand jobs from
26:27
Speaker 5: its Reality Labs division.
26:29
Speaker 2: It's part of a plan to redirect resources from virtual
26:31
Speaker 2: reality and metaverse products towards AI, wearables and phone features.
26:36
Speaker 5: For more on this and the latest tech news, we
26:37
Speaker 5: were joined by Mandeep Saying, global tech research head at
26:40
Speaker 5: Bloomberg Intelligence.
26:41
Speaker 2: We first as Ban Deep what these job cuts mean
26:44
Speaker 2: for Meta's bottom line.
26:45
Speaker 8: I mean reality Lab segment is almost losing twenty billion
26:50
Speaker 8: dollars a year and cumulatively they've lost about seventy billion
26:54
Speaker 8: dollars over the past three years, so a lot of
26:57
Speaker 8: investors questioned, you know, how long they were expected to
27:03
Speaker 8: remain patient on those kind of losses. And I think
27:06
Speaker 8: the initial rumors were about a thirty percent cut in
27:10
Speaker 8: that unit. So this is somewhat below expectations in terms
27:14
Speaker 8: of ten percent job cut, but it just goes to
27:17
Speaker 8: show that right now, the companies obviously focus more on
27:22
Speaker 8: the AI side in terms of building the infrastructure, building
27:25
Speaker 8: their own large anguid model, and it may take a
27:28
Speaker 8: while to you know, really bring it, bring that LLLM
27:33
Speaker 8: concept in that variables or the whether it's a VR
27:37
Speaker 8: headsets or the glasses. And I mean when you compare
27:43
Speaker 8: VR headsets or the glasses that they're selling to let's
27:47
Speaker 8: say AirPods, the number of units pale in comparison. We're talking,
27:51
Speaker 8: you know, ten million, maybe if they do twenty million.
27:54
Speaker 8: Apple does more than one hundred million AirPods a year,
27:57
Speaker 8: So what's the opportunity here? And I think that's where
28:01
Speaker 8: you probably will see more cuts in that business.
28:04
Speaker 2: That is a really really important contrast to make there
28:07
Speaker 2: in terms of what Meta is trying to do, because
28:09
Speaker 2: they want to be part of the mass market here,
28:12
Speaker 2: but it's not quite there yet. Mindy. As Meta pivots
28:16
Speaker 2: away from VR and the metaverse to AI, what does
28:18
Speaker 2: that mean for spending? I mean, they obviously had to
28:20
Speaker 2: spend a lot to build out the metaverse, to build
28:23
Speaker 2: out their VR offerings, and now they're going to shift
28:27
Speaker 2: everything to building out the AI offerings of large language models,
28:31
Speaker 2: these AI glasses. What do you think that the pace
28:35
Speaker 2: of spending will just kind of continue, It won't really
28:37
Speaker 2: shift all that much.
28:39
Speaker 8: Yes, On the AI side, the opportunity is huge. What
28:42
Speaker 8: everyone is chasing right now is an AI agent that
28:46
Speaker 8: can book your travel, your Uber trip, order food, you know,
28:50
Speaker 8: do shopping for you. That's the vision Google is chasing.
28:53
Speaker 8: That's what Amazon alexaplus launch was all about. So Meta
28:58
Speaker 8: has that surface area with you know, Instagram and WhatsApp,
29:01
Speaker 8: and you could argue they could in theory develop such
29:05
Speaker 8: an agent, but the hard part is integration and getting
29:09
Speaker 8: the AI to where it's you know, reliable and predictable.
29:13
Speaker 8: And that's where I mean, it's anybody's guests who is
29:17
Speaker 8: best positioned. I think the Apple Google partnership that we
29:22
Speaker 8: saw this week is probably a negative for Meta in
29:25
Speaker 8: this sense. Like, if Apple is setting up defaults in
29:29
Speaker 8: their phone, then that makes it hard for an external
29:33
Speaker 8: kind of agent to do these kind of things. So
29:37
Speaker 8: from that perspective, distribution really matters and operating system control
29:42
Speaker 8: really matters. So Meta is somewhat at a disadvantage when
29:46
Speaker 8: it comes to, you know, their distribution on Apple and
29:49
Speaker 8: Android devices.
29:51
Speaker 5: Mandy. We also got new Airbnb hired Meta's head of
29:54
Speaker 5: General AI, which is really interesting because wasn't it not
29:58
Speaker 5: too long ago that they declined work with open AI.
30:01
Speaker 5: What does this all mean for its artificial intelligence endeavors.
30:04
Speaker 8: Yeah, I think Brian Chesky has been quite vocal about
30:08
Speaker 8: using open source llms as opposed to you know, proprietary
30:13
Speaker 8: llms like open AI and Gemini, and so his thing is,
30:17
Speaker 8: I've got a direct customer traffic coming to my website.
30:21
Speaker 8: If I give away you know, my bookings interface to
30:26
Speaker 8: these llms, then I'm losing that customer direct customer touch.
30:30
Speaker 8: And he doesn't want to do that. He instead wants
30:33
Speaker 8: to build his own LLM based on an open source
30:36
Speaker 8: model that's already out there, and that's where you know,
30:39
Speaker 8: Meta has open source their model in the past, so
30:42
Speaker 8: it makes sense to have somebody from Meta come in
30:45
Speaker 8: and do something along those lines. AB and B has
30:49
Speaker 8: been open to using Chinese open source models and building
30:52
Speaker 8: on top of that. So from that perspective, it's an
30:54
Speaker 8: interesting strategy that they are going ahead with in terms
30:58
Speaker 8: of using all kinds of open source and not just
31:01
Speaker 8: you know, the US based model.
31:02
Speaker 2: Who in the tech world is winning the talent war
31:04
Speaker 2: because it felt like for a long time open AI
31:08
Speaker 2: and traffic they were, you know, picking up a lot
31:10
Speaker 2: of talent. Is that still the case?
31:13
Speaker 8: I mean right now, the talent is going to where
31:15
Speaker 8: the compute is. If you don't have the compute, you
31:19
Speaker 8: just cannot attract the talent because these models need a
31:22
Speaker 8: lot of compute for training. And you may be the
31:25
Speaker 8: smartest person, but if you don't have the computer, you
31:28
Speaker 8: can't test your idea. So from that perspective, infrastructure build
31:32
Speaker 8: really matters, which is why in Nvidia, even though they
31:34
Speaker 8: are the chip provider, now they launch their own foundational
31:38
Speaker 8: model in autos self driving that just goes to show
31:42
Speaker 8: what compute can do, you know, and Vidia is definitely
31:45
Speaker 8: moving up the stax. It will be interesting to see
31:47
Speaker 8: how many areas where they compete in with their own
31:50
Speaker 8: foundational model man Deep.
31:52
Speaker 5: We're early into the earning season, but big tech results
31:55
Speaker 5: will be here before we know it. And obviously the
31:57
Speaker 5: bar is really high when it comes to what these
31:59
Speaker 5: companies are saying about how they're monetizing their heavy AI investments.
32:03
Speaker 5: Do you think that they'll live up to the expectations.
32:06
Speaker 8: I think right now you have to focus on where
32:08
Speaker 8: you will see positive earnings revisions, and given the kapex
32:13
Speaker 8: investments are going up for this year, it's going to
32:16
Speaker 8: be hard to show, you know, positive revisions when it
32:19
Speaker 8: comes to earnings, except for someone like Alphabet that really
32:24
Speaker 8: has seen a big shift in sentiment because one everyone
32:28
Speaker 8: realizes that their models have caught up, and they also
32:31
Speaker 8: are the most efficient when it comes to their stack,
32:34
Speaker 8: the use of TPUs and low cost inferencing. So from
32:37
Speaker 8: that perspective, I think Alphabet clearly is best position to
32:41
Speaker 8: deliver positive surprises. But for someone like Meta, I mean,
32:44
Speaker 8: if you're hearing job cuts, then you know probably it's
32:48
Speaker 8: going to be hard for them to you know, show
32:49
Speaker 8: positive revisions this year.
32:51
Speaker 5: Our thanks to man Deep sing Global Tech Research had
32:54
Speaker 5: at Bloomberg Intelligence this week.
32:56
Speaker 2: We also looked at the e commerce platform Commerce which
32:59
Speaker 2: provides a driven tools for brands and retaillers. This company
33:03
Speaker 2: trades on the NAZAC under the ticker CMRC.
33:06
Speaker 5: We were joined by the company's CEO, Travis Hess, who
33:09
Speaker 5: discussed how AI is changing shopping and this came on
33:12
Speaker 5: the heels of Google launching its Universal Commerce Protocol or UCP.
33:17
Speaker 2: Commerce is an active partner in UCP, which enables buying
33:20
Speaker 2: directly across Google's AI surfaces. We first asked Travis to
33:24
Speaker 2: break down Google's UCP and just how exactly this makes
33:28
Speaker 2: shopping easier.
33:30
Speaker 3: Given the extent of which Google plays in all of
33:32
Speaker 3: our lives and how people think of them, It's essentially
33:36
Speaker 3: setting the foundation and the standard for brands and retailers
33:40
Speaker 3: and other organizations to be able to scale agent to
33:42
Speaker 3: commerce across all of the surfaces that Google AI would hit.
33:46
Speaker 3: So think of the contextualized conversations everyone's having through answer
33:50
Speaker 3: engines today. Those conversations are then dynamically recommending not only
33:55
Speaker 3: experiences and facts, but certainly shopping and brands based on
33:58
Speaker 3: the enrichment of data against those surfaces, and Google is
34:01
Speaker 3: enabling a standard by which consumers would be able to
34:04
Speaker 3: buy in a standardized, safe secure way. As it serves
34:08
Speaker 3: up discovery, you'll be able to buy seamlessly across those surfaces.
34:12
Speaker 5: Travis, can you walk us through how AI will change
34:14
Speaker 5: the shopping experience in practical terms? Let's say I'm looking
34:18
Speaker 5: for a bag? How do I go about using your platform?
34:21
Speaker 3: The consumer behavior has changed more than anything, So the
34:24
Speaker 3: amount of eyeballs and behavior going to the answer engines
34:27
Speaker 3: is probably the fastest adopting technology we've seen. So because
34:30
Speaker 3: the consumers are going there and they're having these conversations,
34:33
Speaker 3: brands and retailers are having to respond in kind, and
34:36
Speaker 3: they tend to have a fair amount of brand ethos,
34:39
Speaker 3: so they're very concerned about where they show up, how
34:41
Speaker 3: they show up, and who they show up next to.
34:42
Speaker 3: So trust is at the cornerstone of this. So a
34:44
Speaker 3: lot of the foundational stuff you're hearing about now is
34:47
Speaker 3: to set up that trust. So when you're shopping for
34:48
Speaker 3: that bag, it's giving you a response that you can
34:52
Speaker 3: objectively trust. It's not serving up who paid the most
34:55
Speaker 3: to be listed or injected in that conversation. The thesis
34:58
Speaker 3: behind this is based on your own behavior within those
35:01
Speaker 3: answer engines, and of course other behavior within Google. Whether
35:04
Speaker 3: that's through Chrome or through other Google products. They have
35:07
Speaker 3: a unique advantage there because of the amount of surfaces
35:10
Speaker 3: an individual might use to synthesize that in a hyper
35:14
Speaker 3: personalized way. So think of it as not only shopping either,
35:17
Speaker 3: but think of going into your favorite store and someone
35:20
Speaker 3: as you walk in can scan a code and immediately
35:22
Speaker 3: knows what you own, what you like, where you're going,
35:25
Speaker 3: what you're looking for, so they could curate something for
35:27
Speaker 3: you immediately. Where that friction is removed through the process.
35:30
Speaker 3: Think of that virtually in this particular capacity. That's the
35:33
Speaker 3: future state.
35:34
Speaker 2: So all the information that Google has on me, they
35:36
Speaker 2: are also selling who are they selling it to?
35:38
Speaker 3: Oh that's not for me, that's that's top.
35:42
Speaker 2: I mean. The reason I ask is because it depends
35:44
Speaker 2: on me logging into Google for them to give me
35:46
Speaker 2: those personalized recommendations. If I don't choose to log in,
35:49
Speaker 2: then I end up with the equivalent of a Google
35:51
Speaker 2: search on a public computer.
35:53
Speaker 8: You do.
35:53
Speaker 3: I think the models are changing. Certainly the old model
35:56
Speaker 3: was you're searching for terms, and certainly organizations are optimizing
36:00
Speaker 3: through SEO to be listed organically at the top, or
36:02
Speaker 3: they're through paid search, but listed that still exists today
36:06
Speaker 3: certainly in this behavior that drives that, but where this
36:08
Speaker 3: is evolving to is called GEO, so generative optimization, which
36:12
Speaker 3: is really going to be a combination of structured data,
36:15
Speaker 3: which is like product catalog data, skew, color size, all
36:18
Speaker 3: those dynamics dimensions coupled with unstructured data, which are brand guidelines,
36:23
Speaker 3: call center, transcripts, blogs, articles, all the things that would
36:27
Speaker 3: contextualize that brand and that product, if you will. That's
36:32
Speaker 3: being enriched oftentimes by us on the petonomic side, which
36:35
Speaker 3: is part of our portfolio, and then syndicated across these
36:37
Speaker 3: different surfaces, be that Google or Open AI or Microsoft
36:42
Speaker 3: or whomever. And it's going to continue to expand as
36:44
Speaker 3: the channels have expanded over the last several years.
36:46
Speaker 5: What kind of AI trends and retail trends have you
36:49
Speaker 5: been monitoring.
36:50
Speaker 3: It's all about AI this year. That's what's hot exactly
36:53
Speaker 3: this right, I think there's two sides of the spectrum.
36:55
Speaker 3: There's a lot of buzz, which is exciting, but at
36:58
Speaker 3: the same time, it's confusing a lot of people. Is
37:00
Speaker 3: everyone is doing everything and it's hard to kind of reconcile,
37:04
Speaker 3: like what's meaningful to the business I think for larger
37:06
Speaker 3: organizations that we work with, brand manufacturers and retailers, trust,
37:11
Speaker 3: brand ethos, and security are top of mind. So for them,
37:14
Speaker 3: it's less about the sizzle, it's more about the stake
37:16
Speaker 3: and the foundational elements. I think the importance of the
37:19
Speaker 3: Google announcement is they are taking a very pragmatic approach
37:22
Speaker 3: to this to lay the tracks so this can scale
37:25
Speaker 3: and scale properly with trust, with security, and most importantly
37:28
Speaker 3: with a frictionless experience for customers. Because the brands don't
37:32
Speaker 3: want to lose that customer data. They still want to
37:33
Speaker 3: maintain that experience, even though they're not fully controlling the
37:37
Speaker 3: surface by which they're showing up against. It's not like
37:39
Speaker 3: they're showing up against their own websites, so they're in
37:42
Speaker 3: a surface they don't completely control. They're controlling part of
37:45
Speaker 3: it through the data enrichment in syndication, but they're not
37:47
Speaker 3: controlling all of it. So they're very, very concerned that
37:51
Speaker 3: that experience is a positive one and a frictional list one.
37:54
Speaker 3: Otherwise it has ramifications, It drives cost up and call centers,
37:57
Speaker 3: it drives maybe negative customer experience, it drives back things
38:00
Speaker 3: exactly we're in turns bad things on the back end.
38:03
Speaker 3: So that's the reconciliation people are trying to have. But yes,
38:06
Speaker 3: that EI has sucked all the oxygen out of the
38:09
Speaker 3: room at Javis.
38:09
Speaker 4: And it's a big rule.
38:10
Speaker 2: What will AI not change for shoppers?
38:15
Speaker 3: But will it not change for shoppers? I think the
38:20
Speaker 3: behavior and the surfaces by which they're going to they're
38:23
Speaker 3: still going to go to. Right. I think new ones
38:25
Speaker 3: are showing up. I think the expectation personalization has been
38:29
Speaker 3: promised for a long time. I think there's some hesitancy
38:33
Speaker 3: there around the trust, So I think overcoming the trust
38:36
Speaker 3: aspect of this and having that reinforced through continued behavior.
38:40
Speaker 3: The shopping is very new. There was a big rush
38:42
Speaker 3: to do this in holiday and the experiences weren't great,
38:45
Speaker 3: so I think there's a little bit of hesitation. I
38:47
Speaker 3: think you'll see a much more robust offering this holiday season.
38:50
Speaker 5: Our thanks to Commerce CEO Travis Hess.
38:53
Speaker 2: That is this week's edition of Bloomberg Intelligence on Bloomberg Radio,
38:56
Speaker 2: providing in depth research and data on two thousand companies
38:59
Speaker 2: and one hundred the industries.
39:01
Speaker 5: And remember you can access Bloomberg Intelligence via bi go
39:04
Speaker 5: on the terminal I'm Alexandra Samonova and.
39:06
Speaker 2: I'm Scarlet Foo. Stay with us. Today's top stories and
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