Omni Talk Retail Fast Five: Target's ChatGPT Gamble, Kroger's $2.6B Pivot & Gap's Viral Comeback

Episode Date: November 26, 2025
Hosts: Anne Mezzenga & Chris Walton
Special Guest: Daniele Stropa, AWS

Episode Overview

This episode explores major shifts in retail, focusing on:

• Target's foray into ChatGPT-enabled commerce
• Kroger’s massive fulfillment pivot and $2.6B write-off
• Gap’s viral marketing comeback
• Bath & Body Works’ launch on Amazon
• The latest innovative retail tech startup
  The hosts also review recent earnings results across top retail brands, engaging in spirited debate over whether efforts like Target’s AI shopping will truly move the needle.

Key Topics & Insights

1. Retail Earnings Roundup (04:32–08:08)

Discussion Points

• Home Depot cuts forecast, Target also lowers outlook.
• Walmart, TJX, Ross, and Best Buy raise financial outlooks.
• Target stands out for negative 4-year growth; the only major retailer in the group to post negative growth over Q3 compared to 4 years ago.

Chris Walton (05:05):
"Target was the real turkey of the past week, without a doubt. Sales were quite honestly atrocious... the Q3 stack over four years is negative. That means Target hasn't grown a stitch in the last four years."

• Anne offers defense, noting leadership transition and layoffs. Suggests expectations should stay tempered during a turnaround.

Anne Mezzenga (05:53):
"I think they've got a turnaround that they've got on their hands... Yes, they've got a new CEO coming in. Hopefully that will be working on that."

2. Target's ChatGPT Shopping Launch (08:08–15:50)

Summary

Target enables shopping through a Target-powered GPT inside ChatGPT, letting users search and buy via conversational AI. The launch is in beta, just before Thanksgiving and Black Friday.

Anne's Take – Optimistic (08:54, 10:26)

• Buys into the move, regardless of retailer.
• Sees it as Target showing action and willingness to innovate.
• Notes it's in beta and actual customer adoption will be slow.
• Applauds Target for “talking about it in the industry” more than usual.

Anne Mezzenga:
"Every retailer everywhere needs to be thinking about how they're going to go first into LLM-enabled commerce. ... What I think is the biggest news is that Target's actually talking about this." (08:54)

Chris's Take – Skeptical (11:16–13:32)

• Calls the launch "a big nothing burger"; believes it's a publicity stunt given its timing (just before Black Friday, during a weak earnings report).
• Argues the ChatGPT store experience is just a rehash of the existing Target app.
• Criticizes Target for jumping to ChatGPT before fully optimizing natural language search on its own site.
• Points to Walmart’s deliberate approach as a better model.

Chris Walton:
"I think this experience actually shows just how desperate Target is to sound like they're doing something innovative... the experience is kind of lame." (11:16)
"First... you gotta figure out natural language search on your own site first. Then you have to decide if you want to integrate with ChatGPT at all." (12:43)

Notable Exchange

Anne (13:32): “I think you're making an assumption that Target is not, the products are not ready for LLM search when they, they have to be testing this... it's beta, Chris. It's beta during the highest traffic time of the season.”

Chris (15:02): “My only retort is... Why do it over Black Friday? Why put your engineering team through the hell of trying to make this thing work over Black Friday?... What’s the big deal of doing that experimentation in November versus January?”

3. Kroger’s $2.6B Online Fulfillment Pivot (15:50–19:52)

Headline

Kroger shutters three large automated fulfillment centers (CFCs), incurring a massive $2.6B impairment, hoping to boost ecomm profitability by $400M by 2026.

Discussion Highlights

• Both hosts agree site-by-site evaluation is sensible.
• The selected CFC closures are unsurprising given their markets (e.g., Maryland and Florida, where Kroger lacks a strong presence).
• Debate on whether this signals the decline of large CFCs.

Chris Walton:
"A site by site evaluation seems like it makes sense... but $2.6 billion write off to close three facilities, that seems like a hell of a lot of money." (16:34)

• Anne wonders how changes in product mix (demand for fresh vs. shelf-stable) affect automation ROI.

Chris’ Analogy

"The industry just needs to find the right cocktail mix..." (17:51)

4. Retail Tech Startup of the Month: Symfony AI (21:17–26:16)

Featured Guest: Daniele Stropa, AWS

Company Spotlight

• Symfony AI uses computer vision with existing store cameras to monitor on-shelf availability and issue prioritized, actionable restocking/work orders (not just dashboards).
• Claims: Up to 25% productivity increase, 5–7% better availability, and 20% lower infrastructure costs for large clients.

Daniele Stropa:
"For me, the difference [is]... between knowing there is a problem and knowing what to do to address it and how to solve it." (21:50)

Broader Implications (23:28)

• Envisions shift from reactive store management to predictive, AI-driven operations.

Notable Quote: "Not just an incremental improvement, but it's really a transformational change that can reimagine, that can transform physical retail operations." (24:23)

5. Gap’s Viral Comeback (26:16–29:59)

Headline: Gap’s Q3 comp sales +5% (its best holiday quarter since 2017), powered by viral denim campaign featuring K-Pop group Cat’s Eye and strong influencer partnerships.

Discussion

• Both see signs of turnaround under new CEO Richard Dixon and praise the entertainment approach to marketing.
• Question remains: Is it sustainable? Will customers return after the viral marketing?

Anne:
"It’s piquing a lot of curiosity. But... will that mean getting butts in Gap denim? That’s the question." (27:25)

Chris:
"Marketing can spur you to buy once, but can it spur you to buy it that second time?" (29:18)

6. Bath & Body Works’ Amazon Launch (31:17–36:14)

Headline: Bath & Body Works to sell select products via Amazon to “test and learn” and counteract $60–$80M in annual gray market (unauthorized) sales.

Chris’ Position – Critical (31:17)

• Cautions against ceding brand control to Amazon in an age where direct-to-consumer and AI-driven search/discovery may soon diminish Amazon's influence.
• Suggests brands should focus on perfecting LLM (large language model) capabilities on their own sites first.

Chris Walton:
"If you start selling on Amazon, why start selling on Amazon now? Wait a few years, ...get everything right, and then decide what you want to do." (32:24)

Anne’s Position – Supportive (33:02)

• Strongly supports “meeting customers where they are.”
• Sees value in giving customers easy, risk-free purchase experience (e.g., leveraging Prime shipping/returns).
• Believes LLM-based search will require brands to be available across all platforms.

Anne Mezzenga:
"I actually think because of LLM Search, I think you have to be on as many platforms as you can... it’s what’s going to drive purchase." (33:02)

Notable Quotes & Memorable Moments

• Chris: "Target was the real turkey of the past week..." (05:05)
• Anne: "Every retailer everywhere needs to be thinking about how they're going to go first into LLM enabled commerce." (08:54)
• Chris: “Why would I want an app inside of another app?” (11:38)
• Anne: “It’s not going to hit customers very strongly. It's still very much in the trade media.” (09:48)
• Daniele Stropa (AWS): "For me the difference [with Symfony AI]...is really that actionable work list." (25:35)
• Anne (on Gap’s comeback): "First, you have to tell people you exist again." (27:25)

Important Timestamps

• Earnings Roundup: 04:32–08:08
• Target/ChatGPT Debate: 08:08–15:50
• Kroger’s CFC Write-off: 15:50–19:52
• AWS Startup of the Month (Symfony AI): 21:17–26:16
• Gap’s Viral Brand Reboot: 26:16–29:59
• Bath & Body Works/Amazon: 31:17–36:14

Lightning Round Highlights (37:45+)

• Food debates (gravy love/hate, best shelf-stable Thanksgiving sides):
  • Chris: “Gravy’s just good. But...instant mashed potatoes are disgusting.” (37:57)
• Thanksgiving/Black Friday shopping plans (local pop-ups, Banana Republic tradition).
• Bianca Sensori's fashion line with Kanye’s funding (“not ironic at all,” Anne says).

Closing & Gen Z Segment

Producer Ella and Anne discuss Gap’s viral marketing effectiveness:

• “The virality definitely made me go check out the brand. But would I say that it made me buy the jeans? No.” — Producer Ella (42:20)
• Both Anne and Ella note the resurgence in interest but also the barrier of diminished store locations and the need for more than just viral content.

Tone

• Conversational, occasionally sparring, deeply opinionated but analytical, with Anne and Chris frequently disagreeing—especially on Target’s ChatGPT launch.
• Real-world, practical framing from their backgrounds as retail executives.

Takeaways

• The retail landscape is being dramatically shaped by both AI investment (Target, LLM commerce) and by pragmatic operational shifts (Kroger fulfillment).
• Viral marketing (Gap) can win attention but needs product and store experience to back it up.
• Debate continues on whether brands should join Amazon or double down on proprietary, AI-optimized platforms.
• Real-time, actionable insights (like those from Symfony AI) are the next evolution in retail operations.

For retail executives and enthusiasts, this episode is a masterclass in current and future strategies, with sharp, actionable takes on each headline.