Sylvain Perrier: Ladies and gentlemen, welcome to Digital Grocer, the Mercatus podcast. I’m your host, Sylvain Perrier, President and CEO of Mercatus Technologies. This is episode 24, I think.
Mark Fairhurst: Yes.
Sylvain Perrier: It’s the beginning of season three.
Mark Fairhurst: First show of season three. That’s right.
Sylvain Perrier: You’re hearing him right now, talking. It’s my co-host Mark Fairhurst, our Senior Director of Marketing and we are live.
Mark Fairhurst: Yes, we are.
Sylvain Perrier: As live as we can be, considering this as a podcast. At NRF 2020 in New York City.
Mark Fairhurst: Just opened, 10:00 AM. Sunday.
Sylvain Perrier: The show just opened, and it’s Sunday. I got to tell you, the weather is just phenomenal here.
Mark Fairhurst: It’s like summer for a Canadian. It’s unbelievable.
Sylvain Perrier: I was walking around in shorts.
Mark Fairhurst: Yeah. Yeah.
Sylvain Perrier: Yesterday I wasn’t, but I would have being Canadian. Because it is tropical.
Mark Fairhurst: Yeah. I think got up to 18 degrees, Celsius. What is that in Fahrenheit?
Sylvain Perrier: Well, you double it and add 30.
Mark Fairhurst: Okay.
Sylvain Perrier: 56, 60. Something like that.
Mark Fairhurst: Okay. 65.
Sylvain Perrier: Yeah, that’s not bad, right? You know the metric system is the devil’s tool.
Mark Fairhurst: It is and we’ve been bewitched for the last generation and a half.
Sylvain Perrier: Well, that’s nothing new for Canadians, is it? Mark, what do you think we’re going to see at NRF?
Mark Fairhurst: I think we’re going to see a lot of people, a lot of crowds, a lot of innovative technology. I think we’re going to get a lot of news coming out of this show. I think last year it was all AI. I think this year, it should be about AI in action.
Sylvain Perrier: Right.
Mark Fairhurst: That’s definitely what we’re messaging at the show. We’re demoing our personalization solution-
Sylvain Perrier: We are.
Mark Fairhurst: AisleOne.
Sylvain Perrier: We just made a huge announcement, not long ago.
Mark Fairhurst: Yes, yes. Just this past week. Brookshire’s Grocery and Weiss Markets, our first clients to fully implement AisleOne.
Sylvain Perrier: Right. Across mobile and across web.
Mark Fairhurst: Exactly, yeah. It’s fantastic news. I’m more excited for our retail partners, because of the benefit it’s going to bring to their shoppers, and the shopper’s experience.
Sylvain Perrier: Just before the show opened, I did a quick run around downstairs where we are, and I went upstairs. I’m not seeing any clear theme emerge yet at NRF. I’m not sure if we’re going to see a rehashing. I think you’re right about AI. NRF has always been predominantly about POS and hardware, for some reason. I think this is still a dominant show in the space.
Mark Fairhurst: Yeah, that would be true.
Sylvain Perrier: I think we’ll see those core themes emerge in the next little while. But I think the one thing that we’re seeing in the space. I talk about this at great length is, I think there’s a generation of retailers now that are fundamentally awake. Woke. Hashtag woke, I guess. That know what they’re working on, know the space that they should be in, and are actually thinking very strategically. If that makes sense.
Mark Fairhurst: I think they understand the value the AI brings, or the promise of AI. Now it’s really about, show me the proof.
Sylvain Perrier: Exactly. Now we’re not the experts at this. I mean, we always talk about this. That’s why we do this podcast, it’s about bringing really smart people to the show that can actually talk to our audience and be able to share with them their wisdom. We have two people that are experts in this space. Joining us today in our booth is Phil Lempert, he’s a visionary extraordinaire. I would equate him to the Oracle of Omaha, but he doesn’t live in Omaha.
Sylvain Perrier: For the listeners who don’t know Phil, he’s a television and radio news reporter, newspaper columnist, he’s an author, consumerologist and a food marketing expert. He is by far one of America’s leading analysts in what’s happening in this space, specifically. Not just with trends but what’s really shaping the industry. Phil, welcome to the show.
Phil Lempert: Thank you, it’s always a pleasure.
Sylvain Perrier: Joining us also is Markus Stripf, Co-Founder and Co-CEO of Spoon Guru straight from the UK. I suspect he just recently landed. If you guys don’t know Spoon Guru, it’s really amazing tech. It’s a world leading end to end AI solution to help people find the right foods for their individual health and wellness needs. Markus has been on the show before.
Mark Fairhurst: He was one of our first live podcasts-
Sylvain Perrier: Outside of our studio.
Mark Fairhurst: Exactly, yeah.
Sylvain Perrier: He was so passionate about Spoon Guru and he told us the story of how it was just basically an idea that came over, from over the fence with his neighbor.
Mark Fairhurst: That’s right.
Sylvain Perrier: I remember, it was a great story. Markus, welcome to the show.
Markus Stripf: Good morning.
Sylvain Perrier: Markus, can you refresh our listeners about the story of Spoon Guru. What you guys … and I know you guys, I think, work with Tesco in the UK.
Markus Stripf: Well, thanks for the invitation. It’s great to meet you again. Our mission is to take the hassle out of finding the right food. We use AI to help retailers provide highly personalized and relevant and accurate shopping experiences, based on shopper’s individual dietary requirements. That’s the problem we set out to solve. We know people have specific dietary needs or health objectives. We also know that there’s a fantastic wealth of products out there. What seems to be missing is the bit in between. People can’t find what it is they’re looking for. That’s what we’re solving for the application of AI. We’ve developed a health and wellness platform. Which has been licensed by retailers around the world, including Tesco and Woolworth’s in Australia.
Sylvain Perrier: Amazing, that is amazing. Now, Phil, 2019, crazy year for retail.
Phil Lempert: I think 2019 not only was a crazy year for retail, but a crazy year for consumers. When I really take a look at what 2020 is going to bring us, to your point. I don’t think that retailers have actually woken up. I think that retailers have actually died. Now what they’ve done is, they have a new rebirth of a new retailer, who really is focused on the consumer. Versus, if you take a look … who ever thought that Barneys would go out of business? It’s because Barney’s buyers were saying, “Okay, we’re going to curate the best fashion for our customers. We’re just going to put it out there. We’re going to display it nicely and people are going to buy it.”
Phil Lempert: Well, that’s not today’s world. Amazon and Jeff Bezos has taught us that. I think what we’re seeing, especially in grocery, is space that Spoon Guru and Mercatus plays in. Is consumers no longer just want to walk in a store and see 40,000 products. They want to see 15,000 products that are curated for them. Whether it’s online. Back to Markus’ point, finding the products that worked for you. I really think that 2020 is going to build on what we learned in 2019, having AI robotics and so on. Finally, we’re going to see these put with the consumer, so there’s going to be a consumer advantage.
Sylvain Perrier: Any sense, for the both of you, what you think may materialize as a key trend here at NRF?
Phil Lempert: I unfortunately think that there’s too much attention being given to robotics. What I’m seeing and I’m hearing is, everybody’s focused on these robotics that can pick products and deliver them to your car. Walmart announced their test last week, 15 seconds a robot can go in the back room, pull it out and so on. That’s not what a consumer wants. Yes, we’ve got higher labor costs than ever before. Yes, we want to be able to deliver in 30 minutes. But it’s not about robotics. That’s a tool. What we really need to do is focus on the consumer and that’s what I’m looking for. To see what are those consumer aided offerings that can really change the life of a consumer. Versus the back room.
Sylvain Perrier: Right. Markus, from your perspective, I mean you’re coming in from Europe. Different mindset. What do you think is going to emerge as a trend, potentially out of NRF?
Markus Stripf: You’ve alluded to the fact that personalization has been talked about for years now. But I really think it’s becoming a broad use case now. We’re seeing personalization, curation, entering areas like CRM, loyalty programs, recommendation engines. Where people expect a highly tailored experience. We see this already with the likes of YouTube and Spotify, Netflix. Why don’t we get that within retail? I happen to be a vegan, why do I still see a Christmas turkey-
Mark Fairhurst: Exactly.
Markus Stripf: Every time before Christmas. It’s such a waste of real estate, of marketing real estate. It’s a very frustrating experience. I think we’re seeing more and more retailers now showcasing how they’re using personalization in real world examples.
Sylvain Perrier: Yeah. I think both of you say something really interesting because to your point about robotics and picking technology. We were recently with a Canadian retailer and they’re asking about robotics. My comment to them was, “You can actually go out and implement them, but where’s the infrastructure locally to support the technology? If something breaks down, who’s going to be trained?” I think there’s the whole effect of the shiny new thing and you lose that sense.
Sylvain Perrier: At the same time, I think that grocery retailers, and to your point, Markus is that, other technologies like Netflix, like Spotify, have fundamentally put the consumer at the center of the experience. That’s not always the case when it comes to grocery retail. Or retail in general. Because it depends who’s at the table. If you have a team that’s heavily set on operations, then the conversations are entirely different. Now Markus, what’s happening in Europe in terms of digital commerce? Because this show attracts a lot of people from around the world. We know that historically the U.S would look to Europe for the trend settings in terms of E-commerce. Has that changed with your experience? Are the Europeans re-platforming at this point? What’s going on?
Markus Stripf: There’s a lot of re-platforming taking place. The UK, I think, will lead the way when it comes to E-commerce by only just 10% when it comes to the overall revenue pile. It’s growing, it’s growing exponentially. The bulk of the revenue still generated in physical store environments. We see a lot of innovation now entering Omni channel applications and always in store. We’re also seeing a huge drive towards click and collect. Take the convenience of online ordering, but still going to physical store environment to pick up and buy more products is a huge trend.
Markus Stripf: You’re absolutely right. Most retailers, we work with them, we speak to, are in the process of re-platforming, re-engineering. In order to get ready for the future and to embrace all those big technologies we’ve been talking about. AI, robotics, IoT, big data.
Sylvain Perrier: It’s interesting, the Europeans went straight into delivery. A little bit contrary to a certain extent what we did in the U.S. We had a haphazard step of doing click and collect first. Then the pendulum swung to delivery. Now we’re not hearing anything new from Instacart or any of the delivery networks that are out there. Our conversations in both Canada as well as in the U.S. There seems to be this resurgence towards click and collect.
Phil Lempert: There’s a reason for that. Let’s not forget, whether it’s Instacart or any of the others. They’re not making money. At some point in time to have a business you’ve got to make money. The reality is that for a retailer, you have to have click and collect in order to deliver that service to people. Or charge the consumer. The consumer is not going to pay for delivery. Jeff Bezos taught us that you don’t have to pay for delivery. That’s part of the issue and I agree with you.
Phil Lempert: Also frankly in today’s environment, people are fearful of having strangers come into their homes. They don’t want to have somebody that they don’t know. That’s one of the reasons that Shipt has done so well and Target paid a half a billion dollars for Shipt. Is they want you to know your shopper, you get the same shopper all the time if possible. You start to build a relationship. I think that’s one of the reasons.
Phil Lempert: We’ve been waiting with bated breath for Instacart to do their public offering and they haven’t. But I think once we start to see the documentation and we see how much money they’re really losing. A lot of people are really going to wake up, a lot of retailers.
Phil Lempert: Also back to robotics for a second. Here in the U.S we are very much copycats. Kroger buys into Ocado and they do everything. So every retailer says, “Oh, we need robotics. Kroger’s doing it.” Back to Markus’ point where we copy what’s gone on in the EU and in particular with the UK. Same thing when it comes to health and wellness. Let’s remember, the standards for organics, the standards for fair trade and so on. Were in Europe before here. Their consumer base is much more advanced as it relates to health and wellness. Now what we’re starting to see is the U.S retailer following suit of what’s going on. Whether it’s in Australia with Woolworths or the UK with Tesco and they’re finally waking up. We are not in the U.S. My opinion in retail, we’re not innovators. We’re copycats.
Sylvain Perrier: Right, yeah. I think that’s a fair point. Would you guys, and I got to ask this question because we just spoke at the Barclays not long ago. The CEO of Walmart went up, and he’s been shadowing the employees that do delivery but delivery into the house. Where the Walmart employee goes in or the delivery partner or whoever it might be. Would you guys allow a third party to come in?
Phil Lempert: Absolutely not. I don’t care if they’re wearing a camera or not. That for me is one step beyond. In fact, when it was first announced, I had written about how silly it was. I think that we’ve got to understand, especially when it comes to public companies in the U.S. A lot of times they will do things in order to get great publicity or impress Wall Street with what they’re doing. That they are being innovative, that they are experimenting. Versus having things that have legs to them.
Mark Fairhurst: So you think it’s more PR than it is strategic?
Phil Lempert: Absolutely. I mean if you look at Jeff Bezos on 60 minutes, what was it, three years ago showing the drone delivery. We’re still not there.
Sylvain Perrier: Correct.
Phil Lempert: But it gave him a nice boost. If we look at what’s going on with Elon Musk with Tesla. The whole idea of having the Tesla truck that somebody can throw a brick against and it actually breaks the window. Now Tesla is the most valued car company in the world ever. PR plays a big role in this.
Sylvain Perrier: Yeah. It’s like at CES where Uber announced a partnership with Hyundai and where they’re going to have these flying cars plans. I mean the FA is in so much deep trouble right now just with the Boeing scandal. I mean, how is this going to get approved? But suddenly, Uber’s like the [inaudible 00:00:15:00]. That’s really not making money.
Phil Lempert: Also let’s take a look that Uber just announced yesterday that they’re pulling out of Columbia and other countries around the country. Let’s talk about our flying Hyundai car while we’re closing operations in number of countries.
Sylvain Perrier: Now Phil, you’re speaking at this year’s NRF.
Phil Lempert: Yes.
Sylvain Perrier: What topic are you tackling?
Phil Lempert: Well, it’ll actually be Seth Goldman and myself. Seth is the chairman of Beyond Meat. We’re going to be talking about the plant based alternatives and what the future is. I know Seth, he founded Honest Tea. Sold it to Coca-Cola for a gazillion dollars, good for him, great product. Now he’s with Beyond Meat and trying to lead them in a similar direction. We’re going to be debating, if you would, the future of plant-based alternatives.
Sylvain Perrier: Wow, that’s great. Markus, what’s next for Spoon Guru? You guys are doing some amazing stuff. Where are you guys taking this?
Markus Stripf: We are launching five new products here at NRF as part of our wider health and wellness suite. Which are complimentary and modular. We are hoping to be able to change the paradigm away from search into real discovery. Really understanding what people’s propensities to specific foods. We are getting very serious about health now. Again, you asked about trends in Europe. 70% of Europeans now actively try to lead healthy lifestyles. At the same time, 76% of them admit that finding healthy foods is difficult. That’s just crazy. Why is it so difficult? We’re really exciting about show showcasing how technology consult that specific use case. We’ve got a bunch of meetings lined up with retailers around the world. Hopefully, we’ll be able to announce a few more partnerships in the future.
Sylvain Perrier: That’s amazing. That’s amazing. Markus, thank you so much for joining us on the podcast today. How can people get ahold of you?
Markus Stripf: Our website spoon.guru and we’re going to be here for the next few days in your stand.
Sylvain Perrier: Mark, that’s booth 1418?
Mark Fairhurst: 1418 level one. Door 1C.
Sylvain Perrier: Door 1C. Phil, thank you so much.
Phil Lempert: It’s always a pleasure.
Sylvain Perrier: How do people get a hold of you?
Phil Lempert: Supermarketguru.com or [email protected]
Sylvain Perrier: Excellent.
Phil Lempert: Or just call Sly and we’ll talk. We’ll talk.
Mark Fairhurst: Because he’s got the red phone on his desk, right?
Phil Lempert: Exactly.
Mark Fairhurst: Direct connection.
Phil Lempert: Exactly.
Sylvain Perrier: Ladies and gentlemen, thank you for tuning into our show. Keep an eye on for our next episode. I think we got a bunch more we’re going to be recording here.
Mark Fairhurst: That’s right. I think we’ve got about another six episodes we’re going to record.
Sylvain Perrier: I think so.
Mark Fairhurst: This one’s going to get cranked out there pretty quick.
Sylvain Perrier: Pretty quick. Mark, how do people get ahold of us?
Mark Fairhurst: Mercatus.com and all the channels that are listed at the bottom of our website.
Sylvain Perrier: Thanks guys.