Joseph Pao-Wu

Great Bloomberg op-ed on why investing in retail store leaders is good for business. I love Andrea’s callout that big investments can raise eyebrows with analysts – like increasing our average Walmart store manager salary to $128,000/year with a new bonus program that gives store managers the potential to earn up to 200% of their base salary. But in the long run, she shows how these types of investments support retention, career growth, better run stores, strong stock value, and our ability to attract a broader range of customers.   Here are a couple of studies that stood out to me in Andrea’s piece: 💠 A 2012 study by Alex Edmans, Professor of Finance at the London Business School (then at Wharton School), found that firms on Fortune’s list of “100 Best Companies to Work for in America,” which have superior employee satisfaction scores on factors including pay and benefits, outperformed peers by 2.3-3.8% per year from 1984 through 2011. 💠 A follow-up study by Hamid Boustanifar, associate professor at the EDHEC Business School, and Young Dae Kang of the Bank of Korea found that the relationship still held: companies on the publication’s list earned an excess return of 2-2.7% per year through 2020, with particular outperformance during tough times.   At the end of the day, these investments also support the ability to build a pipeline of strong talent that stays and grows with a company. We want Walmart to be seen as an employer of choice and pay plays a big part in how we attract and retain talented people. #Compensation #TeamWalmart https://lnkd.in/gPVdAYG4

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Our team talked through the differences in physical retail vs. digital this week. Cole Walker presented some great insight in the differences in Instacart behaviors and typical store patterns. The big underlying theme? Visibility means something entirely different when you’re talking digital vs. physical in retail. One of my favorite things to do in store is tidy up the shelf (most CPG folks I’ve found do this 😆). The physical shelf requires price tags, inventory, some decent packaging, and merchandising to look good. It also is seen by the human eye, which has a wide lens and can capture a lot of info at once. The digital shelf largely relies on inventory, reviews, and an algorithm paired with searches. It has a very narrow lens for viewership (1 listing per 1 inch of screen essentially) and is noisy in its own way. As the two worlds grow more intermingled, it’s imperative to remember the core ingredients that fuel each medium, and the recipe need for success.

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Kohl’s Corp. has partnered with Instacart to offer same-day delivery from all of its 1,172 U.S. stores. Customers can now receive Kohl’s merchandise in as little as an hour through Instacart, with pricing matching in-store prices and the ability to accumulate Kohl’s Rewards. Kohl’s is categorized as an Apparel & Accessories retailer by Digital Commerce 360 and offers a variety of products, including home decor, skin care, and pet items, all available through Instacart. Kohl’s is No. 23 in the Top 1000. The database is Digital Commerce 360’s ranking of the largest North American online retailers Kohl’s Corp. reported net sales declined in both its fourth quarter and fiscal 2023 ended Feb. 3, 2024. Q4 net sales declined 1.1% to $5.7 billion, despite an extra week of trading this year compared to Q4 2022. Kohl’s saw growth in net income. Online sales declined 10% in the quarter but improved as the quarter progressed, with December and January sales only down "mid-single digits" year over year. Instacart's partnership with Kohl’s is part of a series of agreements with retailers, including Hy-Vee and Associated Wholesale Grocers, Inc. (AWG), to offer same-day delivery and expand delivery capacity. Additionally, Instacart announced a partnership with Uber to deliver Uber Eats orders to Instacart customers. #kohl's #instacart #samedaydelivery

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🚀 Big News Alert: Saks Buys Neiman Marcus with a Boost from Amazon! 🚀 Hey everyone! Just had to share this HUGE update in the luxury retail world. Saks Fifth Avenue’s parent company is dropping $2.65 billion to scoop up Neiman Marcus, and guess what? Amazon’s in on the action, bringing their tech and logistics game. 🛍️✨ Here’s the Tea: • Power Move: Merging two luxury legends to create a mega retail powerhouse. • Tech Boost: With Amazon on board, expect next-level tech integration for a seamless shopping experience, both online and offline. • Big Bucks: Financed by top-tier investors like Rhône Capital and the Abu Dhabi Investment Council, plus $1.15 billion in debt from Apollo Global Management. • Market Shakeup: The new combo will hit around $10 billion in annual sales, giving them major leverage with suppliers and streamlining costs. Why It’s a Big Deal: This merger shows how vital tech and partnerships are in today’s retail scene. It’s proof that luxury retail is evolving and adapting, even when times are tough. For investors, this move is a clear sign of confidence in the luxury sector’s future and the potential for new opportunities. Big things are coming, and I am excited to be part of this evolving industry. Stay tuned for more updates as we keep pushing the boundaries in luxury retail!

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You have to give credit to Walmart. Many large companies have struggled to keep up with market change. Sears, with their legacy catalog, was uniquely positioned to transition to the e-commerce space but failed to adapt. Blockbuster, once the king of home entertainment, couldn't pivot fast enough in the face of Netflix's streaming revolution. Many companies are too entrenched in their legacy operations to embrace the speed of change. Walmart, on the other hand, has not only recognized these shifts but is actively leaning into them. From expanding their Marketplace to building out Walmart Fulfillment Services (WFS), they are rewriting what it means to be a big-box retailer in a digital-first world. Bringing in top talent from Amazon—arguably the leading pioneer in e-commerce and supply chain innovation—demonstrates a clear commitment to accelerating this shift and a willingness to change. While there’s still work to be done to catch up in areas like last-mile delivery and seamless omni-channel experiences, Walmart’s recent results show they are doing something that few companies of their size can: evolving their business model to stay ahead of the curve. It will be fascinating to see how this leadership change will accelerate Walmart’s journey into advertising.

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As a consumer insights professional, you have to accept you will never understand all of your consumers' behaviors all of the time. For example, there is NEVER ANY REASON TO REACH OVER THE SNEEZE GUARD AT CHIPOTLE. EVER! Even if you are Barack Obama, I can assure you that the worker knows what "pico" or "no corn" or "yes, I know guac is extra" means without your grubby hands reaching into the food area. There is no data or research or analysis that will ever make this understandable or acceptable. #ConsumerInsights #MRX #MarketResearch #Chipotle

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Target's shares increased by over 15% following a positive earnings report, indicating a reversal of a sales slump. The company reported a 2% rise in comparable sales for the second quarter, marking its first increase in over a year. Store traffic grew by 3%, compensating for a 0.9% decline in average transaction spending, attributed to lower prices. CEO Brian Cornell highlighted consumer resilience despite ongoing economic challenges. The earnings report reflects broader consumer spending trends, with other retailers like Walmart and Costco also reporting strong sales growth. Target's sales of discretionary goods, particularly in apparel and beauty, showed improvement, aided by new product launches. The company implemented price reductions on 5,000 items, contributing to increased customer traffic. Target's revenue reached $25.5 billion, exceeding expectations, with a net profit of $1.2 billion, a 43% year-on-year increase. The operating profit margin improved to 6.4%, surpassing the company's long-term goal of 6%. Target raised its earnings forecast for the fiscal year, reflecting confidence in sustained sales growth. #target #usretail #usconsumer #retailsales

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Amazon reported weaker-than-expected revenue for the second quarter and issued a disappointing forecast for the current period, causing shares to drop by 6% in extended trading. The company's earnings per share were $1.26, slightly higher than the expected $1.03 per share. Revenue was $147.98 billion, missing the expected $148.56 billion. Amazon's key numbers included Amazon Web Services revenue of $26.3 billion and advertising revenue of $12.8 billion, both slightly below expectations. The company forecasted revenue for the current quarter to be between $154 billion and $158.5 billion, with a mid-point below analyst estimates. The core retail business of Amazon faced sluggish growth due to competition from discount sites like Temu and Shein. Sales in online stores grew by 5% year over year, while third-party seller services revenue increased by 12%. Amazon attributed the revenue miss to consumers opting for cheaper products, leading to lower average selling prices. The company plans to launch a discount store featuring unbranded items priced below $20. In the cloud sector, AWS grew by 19%, falling behind competitors Microsoft and Google. Amazon's advertising revenue increased by 20% to $12.77 billion, with most sales coming from sponsored product listings. Net income at Amazon doubled from the previous year, reaching $13.5 billion. The company cited consumer distraction due to world events like the Olympics and the attempted assassination of Donald Trump as factors affecting guidance. #amazon #q2results #retailsales

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Walmart has reported strong earnings in the first quarter, with a 6% year-over-year improvement in sales and growing profits. The retailer has seen traction among higher-income shoppers, although it is not specifically targeting this demographic. Walmart is investing in renovating its stores and building new locations to create a more inviting shopping experience. The company is expanding its product selection, including the launch of its premium private label brand Bettergoods, and has seen a significant increase in third-party marketplace sellers. The convenience of e-commerce, particularly through delivery and curbside orders, is contributing to sales growth. Walmart's combination of nicer stores, upscale merchandise, and convenient services is making it resemble Target. Target, on the other hand, has projected a decline in sales and has faced criticism over its handling of its annual Pride celebration. Walmart's success in emulating Target is surpassing Target's success in emulating Walmart. Walmart continues to be effective in its core business while also improving its performance in areas traditionally associated with Target. #walmart #target #retail

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🚨 New Podcast Alert! 🚨 In this week’s Omni Talk Retail Fast Five, Anne Mezzenga and I dove deep into the top retail headlines shaping the future of omnichannel experiences. From Amazon’s groundbreaking move with AI-powered ads to Zara’s bold entry into the secondhand market, this episode is packed with insights you don’t want to miss! 💡🎙️ Here’s a sneak peek at what we cover: 🔸 Amazon Tests AI-Powered Ads (7:52) — What does this mean for the future of product search? Will it be revolutionary or just another evolution in digital advertising? 🔸 Costco Wholesale’s Mobile Inventory Search (12:25) — Find out how Costco is helping shoppers locate products with a new mobile feature, and whether it’s a game-changer or not. 🔸 Biden’s De Minimis Exception Changes (18:00) — The U.S. is cracking down on this trade exception. How will it impact global e-commerce and companies like Temu and SHEIN? 🔸 Marketplace vs. Dropship with Mirakl’s Alex Hase (23:15) — Get an expert breakdown on why retailers should consider both models for scaling their online assortments. 🔸 Zara’s Secondhand Launch in the U.S. (29:12) — Could Zara’s move into resale be the future of sustainable fashion? Plus, we discuss Amazon’s return-to-office mandate (35:34) and tackle a fun Lightning Round (41:07) featuring leopard print, Starbucks, and more! 🐆☕️ Watch the video below or click this link to listen to our podcast and get ahead of the retail trends! 👇 https://lnkd.in/gA637z-2 Special thanks to our partners the Alvarez & Marsal Consumer and Retail Group, Mirakl, Avalara, Ownit AI and Ocampo Capital who help to make the living our dream a reality each week! #retailnews #ecommerce #omnichannel #retailtechnology #amazon #costco #AI #secondhandfashion #marketplaces #dropshipping #futureofretail #podcast

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Target share price tumbled 21% due disappointing results. Target reported sluggish sales and declining profits in the fiscal third quarter, attributed to inflation and reduced consumer spending on non-essential items. The company's performance fell short of Wall Street expectations, leading to a disappointing outlook for the holiday season. A U.S. dockworkers' strike in October further impacted Target's results, contributing to cost pressures. In contrast, Walmart reported strong sales and optimistic projections, highlighting a significant disparity between the two retailers. Target's strategy included reducing prices on over 2,000 products for the holidays, yet it still faced challenges due to consumer sentiment favoring essential over discretionary spending. Target's reliance on discretionary items, with only 25% of sales from food and beverages, contrasts with Walmart's business model, which is heavily focused on groceries. Target's perception as a more expensive retailer persists despite price reductions, while Walmart's marketing emphasizes everyday low prices. Target's quarterly net income was $854 million, significantly below analyst expectations, with sales of $25.67 billion also falling short. Comparable sales increased by 0.3%, a decline from previous quarters, while customer traffic rose by 2.4%, indicating some positive trends. Digital sales saw a notable increase of 10.8%, driven by a 20% rise in same-day delivery services. Future challenges may arise from potential tariffs on imports, adding uncertainty to Target's operational landscape. #target #walmart

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Kohl's is partnering with Instacart for same day delivery. This latest initiative is part of a wider pattern at Kohl’s of doing things with third parties. Amazon returns came first. Then Sephora. Then Babies-R-Us. Now same day delivery with Instacart. The partnerships don’t hurt Kohl’s in any way and some, like Sephora, do help generate revenue. But they also don’t fix the many issues with the core business. In the case of same day delivery, I doubt it will move the dial much at all. Why? Well, from our data, among Kohl’s existing customers fast online delivery currently ranks 20th in the list of reasons why people opt to shop at Kohl’s. Kohl’s doesn’t score badly here, it’s just not that important to shoppers. This is most likely because a lot of the things Kohl’s sells are not needed urgently, and people are broadly satisfied with current delivery speeds. Among those who do not use Kohl’s, online delivery being too slow is 26th in the list of reasons people don’t shop the chain. Only 5% of non-shoppers identify it as a reason for not shopping at Kohl’s; and less than 1% say it is the main reason. In other words, faster delivery will not activate many new customers and will not drive existing ones to spend more. It's a distraction - albeit not a deeply unhelpful one - from the main problems. Thanks to Modern Retail for including my thoughts in the article linked in the comments. #retail #retailnews #fastdelivery #samedaydelivery #ecommerce

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I tried to get rid of ROAS this week. Just end it as a viable metric. In dramatic LinkedIn post fashion to get you to expand … I failed. At the Ascendant Network #retailmedia event this week in Palo Alto Andrew Lipsman and Jaiah Kamara, MBA. and I led a conversation on ROAS vs. iROAS. We polled the room and asked, “how do you feel about ROAS – 5 means you love it, 1 is you hate it and hope to never see it again.” The room was less divided than I thought. In a group of Brands, Retail Media Networks, and Tech partners, no one had higher than a 3, with most of the group at a 2. 💡 Turns out, we’re all in alignment that ROAS isn’t a great metric! 💡 We all know that it’s overly correlated to brand sales. We all know it’s easy to manipulate. We all are aware that if we try to present a ROAS that is more conservative and more transparent, we can loose out to our competitors who have a ROAS calculation which is more of a black box. So, what do we do? The obvious statement is we need to move towards #incrementality. But because #math we can’t always get to statistical significance for every campaign. I’m going to propose we think about Retail Media Measurement in a different way. What became obvious during our conversation is the power of closed-loop measurement comes when Retail Media Measurement is combined with measurement that is owned by the Brands. As Retail Media moves towards maturity, Retail Media Networks need to find ways to support Brands own internal measurement. This means providing the right data for measurement in the ways the brands want it, when they want it, and how they want it. We're moving towards what's next at Albertsons Media Collective - are you?

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How can you best maintain your focus through the holidays and end-of-year? 𝗡𝗼 𝗻𝗲𝘄 𝗶𝗱𝗲𝗮𝘀. 💡   Wait ... what? I know this sounds radical, but hear me out.   Convenience Store News just published a piece on the innovation agenda for convenience retailers, citing five strategic initiatives that will never get old.   1️⃣ The Store Experience 2️⃣ Foodservice Innovation 3️⃣ Customer Engagement 4️⃣ Data-Driven Decision Making 5️⃣ Workforce Optimization   "𝘛𝘩𝘦𝘴𝘦 𝘢𝘳𝘦 𝘤𝘰𝘮𝘮𝘰𝘯 𝘮𝘪𝘭𝘦𝘱𝘰𝘴𝘵𝘴 𝘢𝘭𝘰𝘯𝘨 𝘵𝘩𝘦 𝘫𝘰𝘶𝘳𝘯𝘦𝘺 𝘵𝘰 𝘣𝘦𝘤𝘰𝘮𝘪𝘯𝘨 𝘢 𝘱𝘳𝘦𝘧𝘦𝘳𝘳𝘦𝘥 𝘥𝘦𝘴𝘵𝘪𝘯𝘢𝘵𝘪𝘰𝘯 𝘧𝘰𝘳 𝘤-𝘴𝘵𝘰𝘳𝘦 𝘴𝘩𝘰𝘱𝘱𝘦𝘳𝘴."   These are not new concepts, but rather well-known ideas put into action. Take a look at this work from Melissa Kress, Danielle (Romano) Rowan, and Tammy Mastroberte to see how the winners keep winning, even despite "no new ideas."   📕 Read on: https://lnkd.in/g5wwrenK #convenience #cstore #innovation #roadmap #digital

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Posting a client letter we sent out to our Commerce Canal clients about 2024 Prime Day reminders. One point to note: 2023 Prime Days accounted for only 1.16% of the total annual 2023 retail sales. 🤯 Don’t get caught up in the hype. Achieving long-term success on Amazon requires consistent and sustained effort every single day. Remember, Prime Day is just a small part of your overall journey to success. https://lnkd.in/eMJNY3Yp

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Walmart’s real advantage lies in its potential to tap into customers across tax brackets. Walmart is good at basics and wants to be known for more than that — and sell more than that. Walmart has experienced revenue growth and comparable sales growth in its first quarter, driven by upper-income shoppers. The company has raised its growth outlook for the year and expects increased adjusted earnings per share. Walmart's e-commerce revenue has surged, particularly through curbside pick-up and delivery orders favored by wealthier consumers. The retailer has gained market share in groceries as consumers prioritize essential purchases. Customers making over $100,000 have contributed the most to Walmart's market share takeover. Walmart has implemented strategies to appeal to wealthier consumers, including the release of a premium own-brand food line and store remodeling. The company's consistent discount efforts have helped it resonate with its consumer base. Target has shifted its focus to lower-income customers, while also launching a paid membership program to attract higher-income customers. Amazon has introduced a grocery delivery service to compete with Walmart's e-commerce success. Walmart's advertising business has grown, and the company has implemented cost-cutting measures such as reducing inventory and closing health care clinics. Walmart aims to modernize its brand and expand its appeal beyond basics. #walmart #target #amazon #modernretail

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"Not a banana." Media friends! Vertically integrated retail media networks - revenue-focused or customer-focused? This is a whole new capability for most retailers. Certainly "not a banana" as one leader stated, referring to needs well outside of their organization's core competencies. With RMN spend projected to triple of the next 4 years from $54B to $160B, should retailers stay in their lane and outsource this service? These are big revenues, not side-hustle numbers. Most brands typically focus on producing excellent solutions for their customers, leaving agencies and 3rd parties to create numerous pieces of their E2E marketing and advertising deliverables. Should these same companies be expected to pay top dollar media fees to retailers that are admittedly in their infancy of RMN, simply because they own segments of the network. I'd love to hear from brands, that need to optimize their spend to serve their customers in the best fashion. I'd also love to hear from retailers, if they feel confident they can deliver on the tall ask of standing up a new arm of their business in rapid fashion and continue to, or improve upon, how they serve their customers. Is there concern of diluting current staffing, with the customer losing out? Perhaps I'm underestimating capabilities and overestimating the lift here, but it feels like brands will be paying a premium to retailers to figure out retail media's evolution over the next few years, while delivering accretive margin, in a way that they would never do when vetting and signing an agency. #retailmedia #marketing #retail

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