Fast Five Shorts | Amazon Names Whole Foods CEO Jason Buechel Head Of Worldwide Grocery

Summary

Omni Talk Retail Podcast Summary

Episode: Fast Five Shorts | Amazon Names Whole Foods CEO Jason Buechel Head Of Worldwide Grocery
Release Date: January 30, 2025
Hosts: Chris Walton and Anne Mezzenga

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Introduction to Walmart’s In-Home User Test Program

In this episode of Omni Talk Retail, hosts Chris Walton (A) and Anne Mezzenga (B) delve into Walmart’s newly launched in-home user test program. According to the transcript, Walmart has initiated a program allowing suppliers to send products directly to verified customers’ homes for testing and feedback. This initiative is part of Walmart’s rebranded Insights platform, now named Scintilla.

A [00:00]: "Walmart will now let suppliers test products in its customers' homes. [...] the retailer recently renamed Scintilla."

Program Mechanics and Objectives

The program targets suppliers who subscribe to Scintilla, enabling them to conduct in-home tests with members of Walmart's exclusive Customer Spark community. Starting in early February, Walmart researchers will assist brands in designing surveys to gather detailed customer feedback on both new and existing products.

A [00:00]: "Walmart will offer the test to customers from Walmart's Customer Spark community, an invitation-only group of Walmart shoppers."

Host Discussion: Benefits of Direct Consumer Feedback

Chris Walton highlights the advantages of investing in consumer research and direct usage testing. He emphasizes that such strategies can lead to the creation of more consumer-friendly products with a higher likelihood of market success.

A [00:57]: "Investing in consumer research and direct usage testing is always a positive, always a positive towards building more consumer-friendly products with higher probability of success."

Potential Downsides and Concerns

Anne Mezzenga raises a critical question regarding the potential downsides of conducting consumer testing through Walmart as opposed to third-party research agencies. She points out the increased risk of product delisting if initial consumer feedback is poor.

A [00:57]: "Is there a downside to CPGs doing this through Walmart versus third party research agencies such as increased risk of delisting if consumer feedback is initially poor?"

Chris responds by acknowledging that while Walmart's platform offers verified shoppers, there’s a risk that products tailored specifically for Walmart may not perform equally well in other retail environments.

B [01:26]: "If you're building it for Walmart, it's hard not to do because it's a massive retailer, you're building it for America."

Balancing Data Utilization Across Retailers

Chris emphasizes the importance of ensuring that products developed with Walmart’s feedback are adaptable to other retailers like Target or Sprouts. He believes that Walmart's customer base provides valuable insights but cautions against solely focusing on Walmart-specific data.

B [01:45]: "You can't just focus on the Walmart represent or the Walmart feedback that you're getting from these."

Skepticism Towards Walmart’s Motives

Anne expresses skepticism about Walmart’s intentions, suggesting that the program might be a strategy to extract more revenue from their vendor community. She questions why CPGs would need Walmart's assistance in designing tests when accessing Walmart shoppers independently isn’t challenging.

A [03:15]: "This just feels like a way to squeeze more incremental money out of your vendor community."

Moreover, Anne voices concerns about Walmart potentially leveraging the feedback data to enhance their private label offerings, which could undermine the CPGs’ competitive advantage.

A [04:20]: "I don't want Walmart to get insight into the data that I'm collecting on what's working and not working with my new product development because then they could go and take that and put that into their own private label development."

Opportunities and Further Considerations

Despite the concerns, Anne acknowledges that Walmart’s extensive customer data could offer significant opportunities for CPGs to better understand and cater to different consumer segments, particularly upper-income demographics.

B [05:18]: "There's so much more opportunity to capture like that upper income demographic and I do think there's so much more data exchange that could be happening."

Chris adds that while there might be hidden incentives behind the program, the potential benefits warrant further exploration. He remains optimistic about the program’s prospects, especially with Walmart’s rebranding efforts.

B [05:58]: "I think it's worth exploring. I would like to see, I guess I just, it's something I want to follow and see."

Conclusion: A Cautious Optimism

The hosts conclude the discussion with a blend of cautious optimism and skepticism. While recognizing the potential advantages of Walmart’s in-home user test program in providing reliable consumer insights, they remain wary of the underlying motives and possible long-term implications for CPGs.

A [06:21]: "Yeah, yeah. My, my bet. If I was a betting man I would say, I would say we'll never hear about this headline again. That's what I think."

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Key Takeaways

• Walmart's Scintilla Platform: Offers suppliers the ability to conduct in-home product testing with verified Walmart shoppers.
• Benefits: Direct consumer feedback can lead to more successful, consumer-friendly products.
• Concerns: Potential over-reliance on Walmart-specific data, risks of data sharing leading to private label competition, and the possibility of increased costs for suppliers.
• Opportunities: Enhanced understanding of diverse consumer demographics through Walmart’s extensive customer base.
• Final Outlook: The program presents both significant opportunities and notable risks, requiring CPGs to carefully weigh their participation.

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This detailed summary encapsulates the critical discussions between Chris Walton and Anne Mezzenga, providing valuable insights into Walmart’s strategic move and its implications for the retail and consumer packaged goods (CPG) industries.

Transcript

[A]

Walmart will now let suppliers test products in its customers homes. According to Modern Retail, last Wednesday Walmart launched a program in which verified customers can receive products at their homes, test them and provide feedback to suppliers. The in home user test program is for suppliers that pay to subscribe to its Insights platform, Walmart Luminate, which the retailer recently renamed Scintilla. In early February, Walmart Luminate researchers will help brands design surveys to collect customer feedback on new or existing products. Walmart will offer the test to customers from Walmart's Customer Spark community, an invitation only group of Walmart shoppers. The retailer has used to conduct surveys since 2018. And this is the put you on the spot question this week I get a break finally this week. Wow.

[B]

All right, all right, let's bring it A and M. Here it is.

[A]

Quote, investing in consumer research and direct usage testing is always a positive, always a positive towards building more consumer friendly products with higher probability of success. Is there a downside to CPGs doing this through Walmart versus third party research agencies such as increased risk of delisting if consumer feedback is initially poor, End quote. And what are your thoughts on that question?

[B]

You know I think the only downside that I can think of here would be is if the product creators, the CPGs, the same thing we talk about with retail technology companies. If you're building your product for Walmart, which is hard not to do because it's a massive retailer, you're building it for America.

[A]

Yeah. Yes. It's basically what you're saying.

[B]

If you're not doing that though, with the ability to consider like okay, how do I then make sure that this product works in Target, works in Sprouts, works in all these other retailers. Like you can't just focus on the Walmart represent or the Walmart feedback that you're getting from these. But I think you just said it, Chris. I think that this is good because number one, you have confirmed Walmart shoppers. This is not people from a focus groups. I've done plenty of focus groups in my day who say yeah, I shopped at Walmart in the last six months or I think I did or I might or whatever. I, I think there's still so much ambiguity in the, in, in the consumer focus groups that I think this is somebody you know exactly is a confirmed Walmart shopper will be potentially in a place to buy this product. And I think Walmart does do a better job of representing the core of the country. So if you're going to scale this beyond the coast like Walmart's a great representation and the CPGs and Walmart are going to get a ton of data from this. So I think it's a really good move. I think it just is important that like, that's the data collection side of things. I said I still think it's important to have the art side of the merchandising here to really understand, okay, what's the data that we're getting from Walmart, from the majority of the country, and how do we delicately design that product to fit within those other retailers that are going to be in our portfolio. But you, you're the, the merchant here. So what, I mean you've done plenty of these tests too. What do you think?

[A]

Yeah, I mean I, I, I, I, I think you're drinking the Kool Aid a little bit on this one. And I, I kind of tend to side with where I think the A and M, C A M Consumer and retail group was leading us with that question, which is why would, why would the CPG sign up for this? Like, I, I don't, I don't think if I'm a cpg, I don't think I would and I honestly, I think, you know, for me this, I hate to say it, but this just, and, and fair play to Walmart for doing it and this just feels like a way to squeeze more incremental money out of your vendor community. Because if, like, if I'm a vendor, it's not hard, I mean it's not hard to find Walmart shoppers. It's really not through third party research firms, it's not, I mean, maybe, maybe there's occasionally somebody that's lying, but for the most part you can find somebody. And you know, and so like why, why, and so if that's the case, if I'm a cbg, why do I need Walmart to help me design tests for new products? And the other part I don't like about this, which, which is different than the reasons that A and M gave for not liking it or potentially not liking it, is I don't want to give, I don't want Walmart to get insight into the data that I'm collecting on what's working and not working with my new product development because then they could go and take that and put that into their own private label development. Why would I?

[B]

But they're going to do that anyway, right? I mean they're gonna get it, they're.

[A]

Not gonna have your research data, they're not gonna have your feedback on your products? No, they're just gonna know what's selling and what's not at the end of the day off the shelf and that might still spur them but like if you're, if you're doing some new recycled packaging or some new thing, you know, in terms of some, some new like label claim around like the, the Ozempic craze or whatever, they're gonna get insight into that more quickly than they would otherwise and they could put that in their private label development. So, so maybe I'm, I'm, maybe I'm missing something but I don't know. The merchant had in me is like good job Walmart. You can press them into, you know, spending more money with you but at the end of the day if I'm a cpg, I'm like treading really lightly here and I'm putting the minimum expected commitment into this program with Walmart. That's what I think. Yeah.

[B]

Oh I think there's, I think there's so much more opportunity to like I just as a Walmart plus member. Like I think there's so many more opportunities to capture like that upper income demographic and I do think, I think that there's more to knowing you have a Walmart shopper, especially in grocery and understanding what their purchasing behaviors are, what else they like, what other flavor profiles they like. Like I think there's a lot more data exchange that could be happening and you're right, I'm sure there's some hook in there. Just like with retail media like you have to be part of this program and pay us more money if you're going to be like. I'm sure there's a lot of nuance.

[A]

In there but part of the vendor summit?

[B]

Yes. I don't know. I think, I think it's worth exploring. I would like to see, I guess I just, it's something I want to follow and see. If we start to see this pick up as you know with the rebrand of the name, who knows, maybe it'll take off and what is it resilience or something there salience or something scintilla and.

[A]

Chill.

[B]

How can I forget that?

[A]

Yeah, yeah. My, my bet. If I was a betting man I would say, I would say we'll never hear hear about this headline again. That's what I think.