Retail 2025: Unlocking Competitive Advantage with Smart Store Design, Pricing, and Real-Time Data

The episode dives into the evolving retail landscape as we approach 2025, highlighting the alarming trend of mediocrity in customer service and how retail can evolve. Key discussions center around leveraging data, understanding consumer behavior in pricing, and the unyielding importance of maintaining a strong brand identity in an increasingly competitive market.

• Mediocrity in retail and its effects on consumer expectations 
• The relationship between pricing strategies and consumer affordability 
• Importance of actionable insights from gathered data 
• Navigating the complexities of online versus in-store brand presence 
• The evolving role of AI in retail operations

Transcript

Phil Lempert (00:00)

Welcome to today's webinar, Retail 2025, Unlocking Your Competitive Advantage. As we look towards 2025, retail is undergoing transformative shifts, opportunities and challenges that demand a fresh approach to your strategies. From innovative store layouts and game-changing pricing tactics and technologies to power of real-time, on-the-ground insights, both retailers and brands must adapt quickly to stay competitive.

To provide you with the tools and strategies you need to thrive in the evolving retail landscape, I've invited Jake Blondin to join me. Jake joined RD Solutions, formerly Retail Data, in 2015, initially leading the company's strategic initiatives as vice president. He was promoted to chief operating officer in 2019 and became CEO and president in 2020. With a career focused on optimization and innovation,

Jake brings deep experience from technology-driven industries. Jake has played a key role in expanding RD Solutions field operations across both the US and Canada, leading the company's transformation into a technology-driven leader in retail competitive intelligence. Under his leadership, RD Solutions has enhanced its ability to deliver actionable insights on pricing, promotions, and assortment differences between in-store and online channels.

Today's webinar is sponsored by RD Solutions, who equips retailers and brands with actionable insights to optimize every customer touch point, both online and in store. Through advanced global web scraping and unmatched national field coverage, RD Solutions help businesses enhance customer experiences, boost loyalty, and drive measurable growth in near real time. With RD Solutions, you get much more than just data.

you get intelligence to make faster, smarter decisions that directly impact your bottom line. Let's get started. So Jake, I've heard you say that mediocre has become the new norm at retail. Explain.

Jake Blondin (02:04)

Yeah, unfortunately, we've recently been on the market and we've just seen doing a good job is kind of not the norm. I think we've spent a lot of energy over the last two years building up our services, leveraging our experience and really going to a point where we really just focus on doing a good job pace, a resolution, responsiveness. These cores that I think have been fundamental to industry, I thought for years, it seems like there's a trend certainly since the early

since the 20s, where people are just accepting of a moderate quality level and we're just out there doing as best we can to do a good job.

Phil Lempert (02:37)

Is that because of the pandemic? Is it because people are just don't have their heart and soul into what they're doing anymore? What caused this?

Jake Blondin (02:46)

You know, I think it's simply a little bit of all of it, actually. I think we've generally gone to a mediocre level service everywhere that we go. You go to a restaurant, there's a frustration with the quality of service that we're getting. Almost anywhere we go, we've just accepted that we're gonna do it ourselves. It's gonna be a little bit lesser quality than it used to be. But I don't know that that's the service that people really want. It's just the service that's progressed into the world that we have. And I think there's a progressive shift back.

everywhere that we trend in a day to really care about the quality of service. You know, our whole discussion that we have often over the years that we've been in services where we're not the right service for everybody, but do care about quality and more so just the relationship that we try to build. We're a good partner for that.

Phil Lempert (03:30)

Is it also partly because of people not getting as much money at pay that they expect to get?

Jake Blondin (03:38)

Well, I think we've seen, at least in our business, which is pretty heavy labor intensity, that people have a high expectation of their comp. I think we're seeing actually quite a bit of compression in that gap. think the affordability that people have is a problem. So maybe it's that there is this tension in the system between the ability to pay and what industry expects for the price, right? So.

you know, there was the the inflationary aspects of price that people I think thought people saw, which a lot of the brands have got blamed for over the last couple years. How real is it? can't really specify, but I certainly see that people have got a compression and what they can afford. And now, you know, price as a general theme is everywhere in every day and in people that you wouldn't normally think. I mean, I'm very conscious of price. We all are. And I think that's a function of

the available disposable income that we all have.

Phil Lempert (04:27)

So both on the retail level and the CPG level, there's a lot of talk about the collection of data. Are they doing enough with the data that they're collecting? I mean, I remember when frequent shopper cards first came out and retailers jumped on it. And I was with one retailer who will

remain nameless national retailer. And we were talking about frequent shopper card data and he says, you know, he's got boxes and boxes and boxes of data sitting in a store room. Nobody's looking at it. Has it gotten any better?

Jake Blondin (04:57)

I would know. I think we've done a lot better at building solutions on how to consume data, but we just have exceedingly more, right? I mean, the argument is data is kind of the new oil of the future. I think AI is created entirely new means of consumption. But I think retailers and brands and collectively, the world is struggling with, now we've got an exceedingly large amount of data. How do you bring it all together? How do you make use of it? Because data alone is

kind of meaningless if you leave it in a box, can tell you nothing happens with it. And then you move it up the stream until you get to insights, but then if you don't act on it, it's just stressing. So we as a society are struggling with the availability of data and how to use it well. And that's a lot of why what we're about, right? From a solutioning standpoint, we've got the ability to collect the data, whether it's online and store and all kinds of different types of information and data that we can gather, but we've spent a lot of energy

figuring out how do you effectively build a solution or a partner relationship with brands and retailers where you can use the data, which is why we built a pretty strong platform environment where we process, let's say, billions of data points a week, and then just highlight a couple things that you need to worry about as a given individual. Like if you think about a category manager inside of a retailer, they only care about a small subsection. Think about a pricing manager. Think about a buyer or a category manager in a brand.

Their slice is small, but how do you sift through all the information that's available to worry about when do I need to take action? And that's a lot of our effort is how to drive clarity of when you need to take action based on an appropriate strategy or position that you want to have in the market. How do we help you identify that opportunity and then pursue that opportunity? And that's why we have this whole field observation team and resolution team that can go out and for instance,

you see you have zero sales stores. Everybody worries about it, everybody talks about it, but by the time you figure it out and get someone to solve the problem, it could be four weeks, six weeks, maybe it's solved, maybe it isn't. How do we close that cycle and go from observational opportunity to resolution capturing sales and benefit of clients? Because I kind of look at, I was thinking about it yesterday, like, so you have a deficiency like that has two, one is sales, everybody can say revenue. But the other part that I think is interesting, more qualitative is

The impact on brand, so a particular presence in a shelf that is not looking its best. That has a brand impact. Granted, you may not get sales because you don't have the volume on the shelf, but you also have impacting your brand perception as that person walks by. lots of problems to consider.

Phil Lempert (07:20)

So let's say I'm the category manager for a hot sauce brand. What can you do for me?

Jake Blondin (07:24)

Mm-hmm. Yep.

Well, mean, full spectrum, right? So we can evaluate, for instance, your e-comm presence and what is your searchability and what's your discoverability of your item, right? So a big issue that I'm currently seeing, and I actually was looking again in the last week as we continue to build our product portfolio is I actually look for a very basic question like chips or a very basic question like hot sauce. You go to an e-comm site of one of the retailers and you put in hot sauce. The probability that you turn up on the first fold

If you haven't already purchased position and optimize your presence is very low. How many people go to the button that say load more? I don't, I don't think most all of us do, right? You've got about 20 options and then it says load more. like, I don't need more. I kind of not that passionate unless I know exactly what I want. So where is that discovering process happening or that accidental switch switching, right? Which is an active strategy in a store, right? That's the mean opportunity for switching is in a store on a physical shelf.

How do you do that on digital sales? So how do we help people better do that? That's one environment for that type of customer. Like on the physical store, it's again, more basic fundamentals of merchandising performance, but there's this whole relationship. So in store, maybe you don't have enough reviews. So I know the main dimension people worry about is the product available, how well is it priced? And then how well is it reviewed? Those are the three main dimensions that drive our behavior to purchase the path to purchase, like the decision to purchase.

That is a big impact. So we can actually partner with companies to help them improve their reviews and their score performance by actually working with our team to have them go out, purchase the product, merchandise the product, and in parallel, purchase the product and provide an unbiased review of it. We can't influence that review outcome, but I mean, you can't do that with a normal consumer anyway, but we can help facilitate the presence. And if your product's great, people are gonna love it, which is I assuming why we're out there reviewing it.

Phil Lempert (09:14)

So for RG Solutions, how many stores, how many field people are there? If I'm this hot sauce manager, I want to make sure that you're actually going into the store and being able to look at the display, give me the feedback on it. But are we talking 100 stores? Are we talking 500 stores?

Jake Blondin (09:14)

So, full spectrum.

whatever your distribution is, right? mean, lot of startup brands that we work with, or maybe in a Whole Foods or owner in that more developing space will do work in all of those stores. mean, have thousands of employees and a big differentiator differentiator, excuse me, is we have all employees, right? So the big challenge that I see when I've looked at this market as we came out of, we've been this for, since the eighties, collecting data in the retail industry, particularly grocery.

And the main issue that I see is that people are struggling to get the data collected in a way that they want. So I think the trainability of our team, the assignability of a team, sounds like a simple dimension. But if you're working with a, let's say a partial workforce or a contract workforce, you can assign them. It's not legal to assign them because they're contractors. So therefore they're autonomously capable to work. But the biggest challenge is

You need the work done like you didn't ask for the work to done to be done to get. 75 % 80 % of it done, so that's a big part of our team is is the assignability. We have a whole management team that sits on top of our field staff, then we have regional district managers, regional managers and then our corporate infrastructure here. All of which is made to make sure that work gets done on time at a quality that you expect. You go to the recruiting process, which I've come to realize is unique.

I kind of took it for granted, we've spent a long time building our recruiting process because we're really worried about our brand. So we do all of our recruiting in-house because you can't really farm out your brand, your culture, your image. So because of that, we have a maybe unreasonably rigorous process on the front, maybe appropriately rigorous. But for us, it allows us to select people that we are comfortable, can do the job, are excited about doing the job, and are reliable and dependable, like acquiring them to have a

a driver's license requiring them to have insurance. Like, you should have those things of your employees. But if they're not an employee, what do you care, right? Otherwise, it's an employee ID and a user number, right? I that's how that system works. So the difference is, we make a person show up to an interview, we make them show up to a secondary training, we make, there's this process, and that's burdensome. But that burden, you could argue is a really strong filter, but the quality of person that we have in our team.

Phil Lempert (11:27)

in.

Jake Blondin (11:44)

And that's really why we've been growing fairly strong over the last year, year and a half as we expanded our services is just doing a good job. mean, our recurring use by our clients is 90 % of clients have used us recurringly after the first time they use us. That's not normal rate. That's why I come to these simple principles like why is this happening? Because we just care about doing a great job. It's all we know to do. Now coming out of retail pricing, retailers as our core partner,

the accuracy and timeliness of price is critical for your position in the marketplace. So that's fundamentally how we respond. We don't know how to do a mediocre job. Now that can be a problem because there's definitely sometimes we're doing a mediocre job might be okay. That we're probably not made for that because I don't know how to tell my team to do like most of it and do a pretty good job. They don't know how to do that. So it's been an interesting learning of like, yeah, if someone's down doing kind of

don't really mind when it gets done, not super critical that it gets done exactly how I want, but most of it done pretty good. There is a reason for that. There's a place for that. That's just not our game. So we've been thoughtful about how do we build the right partners and relationships with members across the organizations in both retail and brand where that service is important or that quality, those dimensions of our culture are important.

Phil Lempert (13:05)

Let's talk for a minute about branding. In 2025, how important is a brand for retailers and for CPG? And what role do programs like Walmart Cash fit into the whole branding aspect?

Jake Blondin (13:08)

Mm-hmm.

I mean, I would argue brand has no barrier you and I are a brand of ourselves, right? So I think the very simple frame I come around brand is it's the it's the opinion that precedes you right or wrong. You don't really get to pick your brand. It's kind of a perception. So you spend a lot of energy creating the right perception of consumers or partners like you and I to build a perception of who we are, but that's our brand. It's the opinion that it precedes you. So I think it's incredibly important.

to every single brand. I think anyone in the the industries you just suggested retail, you say like, the core of retail is it's a very large real estate company. And a marketing company, their marketing is their brand, right, their brand image, the confidence they build in the consumer to show up to their address and get a service that they expect for a price point that they agree with. That's a retailer's brand, the CPG is kind of a similar at a different space. So they're expecting anywhere you go by this product, you're going to get this quality of product.

And it's going to be a well priced product, right? Because technically the cost of goods should be functionally the same retail price, right? So that's the principles. I think brand is super critical. I you mentioned Walmart cash as a dimension of brand slash like loyalty, I think is a different way to think about cash. Taking it a little bit differently. The point around Walmart cash is what is the price point?

that you're in fact competing with if you're retailer to retailer brand to brand. Two products trying to get into a basket is a brand issue. Two retailers trying to get you to show up and shop with me frequently is kind of the same problem, a different angle, which is all usually price, convenience and then price, Or probably the most core drivers, availability of course, proceeds all of those. If you don't have it, you can't sell it. But, you know, when we look at that, the complexity of price is the business we've been in for many, many, years.

It actually was very easy before and very, very hard. Now you've got, if you think about brand management, you've got third party retailing environments, or you've got an e-comm environment, which is let's say first party e-comm on a retailer site, walmart.com, cause you mentioned cash, kroger.com, shop, right? So all of these retailers have their first party site. That's their goal is to create that relationship with their consumer. That makes total sense. But then you've got Instacart.

You get more international, have high presence of Uber Eats and Dash and these other formats that are experiences that people have with your brand directly and indirectly. I think you need to be thoughtful about all of those positions that you're taking and how you're performing in that ecosystem and across the ecosystem. was recently talking to a large retailer last week about actually helping with this issue is that, okay, you have your first party environment, you have your in-store environment.

You have your third party e-com relationship and you've got two or three different channels you're selling to. If you have a marketplace, you have this whole other dynamic of perception because you've got third party sellers in there selling products, sometimes at crazy pricing, you're trying to govern that. There's a whole effort being taken now within retail about how do I manage marketplace and make sure that it doesn't be become detrimental to the perception that I'm building with my customers about my environment, right?

You see lot of disclosure, but it's kind of at a disclosure level. Eventually, they're trying to control that. But anyway, think this is the central theme that people are worried about is how do I control my brand across all the many channels that I'm available in with a consistency? And that's hard because an Instacart environment is kind of its own ecosystem. has its own presence. It has its own pricing mechanics. It kind of has its own customer, which are quite sticky. Retailers would really

love to pull them to first party. But you know, it's this interesting dynamic that you have in the market where there's a lot of necessary evil isn't fair because it's a high value by there's a value in the marketplace for that service. But it's this, you know, everyone you much prefer to have your customers shop at your store. That's the optimal solution. And you'd rather self check because now I'm running the best retail environment possible. You've seen Amazon put a heck of a lot of energy into that. But that is this is where we're seeing price and so

You end up with like a right price. You end up with a right price online. Let's just assume all channels and just leave them alone. But you've got right. You've got promo. You've got potentially secondary couponing discount mechanism that's sitting there, particularly in an econ environment. And then you potentially got the last piece of just Walmart cash as an example, which is in the cart, a loyalty program somewhat replacing savings catcher back in the day. That is a mechanism that's supported, I think, between brand and retail. From what I understand.

And that's a final price. So when you think about competitively as a retailer, what is my competitive price that I'm competing with? Understanding those prices, you may not build your pricing engines off that and your defense and pricing mechanism may not include it, but you should be aware of all those price presentations. Similarly for brands.

Phil Lempert (18:02)

So let's flip it around. And what's the consumer lens today on price? We hear a lot of people concerned. Prices are going up. I can't afford things and so on. But looking through the consumer lens, how do they really feel about price?

Jake Blondin (18:18)

I think those problems aren't wrong, right? The price is going up, right? I you had the whole, I think the progression of shrink flation has come out of the, or is kind of now the new norm, right? I think I bought a box of 12 count Cheez-Its for my kids and noticed that the ounce count is down, but the count is 12 still, but the ounce per bag is down. It's funny, I found a benefit there. I was like, wow, they got the calories down from 140 to 100. So in a weird way, you've helped me.

I probably just wanted to taste a few anyway.

Phil Lempert (18:45)

Yeah.

But before

I let you do that, I remember when Kraft came up with their 100 calorie packs. I don't know if you remember that. was talking to some people at Kraft at the time, and their number one complaint for the 100 calorie packs on their 800 number from consumers was that there wasn't enough in the bag. You can't win. Yeah. Yeah.

Jake Blondin (18:57)

Yeah. Yeah, yeah, yeah.

I mean, it's a pretty straight formula. So

yeah, so I think I think that part is I think that concept of shrinking the size, but keeping the count and that whole effort that's been really since 2020. And more recently, as as brands kind of acknowledge the concern over price and really their cost basis, and then how do you kind of guard margin and so on? I think price is really you look at, you know, we spend a lot of effort

And our traditional work in partnership with retail is the outside of the store, right? So the prices there have gone up. In reality, have. Now a lot of a business is labor. mean, fruits, vegetables, meats, and so on. Granted, the raw commodity has gone up. But the commodity also has a factor of the effort to get back to that final destination, which is in, you know, if it was a steak, it's getting it all the way to be a steak on a shelf. I don't

you're to reverse it, right? The inflation of the expense of an individual to do the tasks, feed the animals and so on, that's forever. So I think people are pressed on price. And I think price is coming in direct focus for everybody on how to maintain their customers and how to create loyalty. And that's where these programs are coming. It's fragmentation of price. I'd rather actually have it within the ecosystem. mean, there's some

It's a good example of Amazon, right? They've done a good job of creating the price so long as you're loyal. I think you're seeing a lot of that. I think cash is a good one. Plus is a good one. You're seeing everybody kind of come out with their own version of these programs to try to give you price, but also get something as a transactional value between the parties. Let me learn more about you as a consumer so I can better curate my assortment. So maybe I can drive out operational costs because I better understand my consumer.

And maybe I can serve up custom ads, which is of course the end state of everybody. But that's harder than you think. And there's a lot of people trying to solve that problem. But that's, it kind of makes sense at same time. don't know how perfect we're gonna solve that problem for with AI.

Phil Lempert (21:08)

So you mentioned meat.

How should retailers manage the center store versus the perimeter of the store? And what about all these locked cases that we're seeing, especially in drug stores, but also a lot of supermarkets also, where you've got to press the button and wait for somebody to come? Is that a short-term shrink strategy? Is that going to go away? But look at the whole store.

Jake Blondin (21:30)

I mean...

Well, we'll start with the quick one on lock cases, because it is like a central theme that comes out in every single publication, seemingly daily now. I first saw it, I don't know, I was traveling somewhere, I took pictures and sent to my team and said, this is crazy. Trink has to be really, really valuable to justify locking up a five gallon jug of detergent to think it could walk away. Clearly, there must be precedent, right? I got to assume that people are not doing this silly, I would think

Phil Lempert (21:55)

to it.

Jake Blondin (21:59)

Makeup and so on and those type of specialty high-value small frames that may make sense, but I think the extreme is extreme You know, we've done some studies around that and how long are you gonna wait for a deodorant in an aisle? I'm gonna say near zero Because you'll just go online and order from Amazon. It'll be at your house. So I think Retailers particularly brick-and-mortar retailers really have to be thoughtful about how they defecting customer

pattern and creating trialing with other channels that could be a conflict with you long term. I'm super passionate about the in-store retailer because I still shop in store almost exclusively. I like the experience, but I think it's a huge risk for those small little things. Wait in seven minutes, eight minutes is generally we've done some studies with our team. So how long is this really taking folks?

That's not enough. That's too much time for a $6 two pack of deodorant So anyway, that's how I hope they solve it I saw some recent stuff come from CBS I think and Walgreens both trying to figure out how do they solve it with an app? I? Knew burden for a problem that was created by ourselves. I mean, it just seems like an interesting Challenge that they're make putting more friction in the system, which the whole goal was to remove friction so I think it's I think it's

Phil Lempert (22:54)

Right.

Jake Blondin (23:09)

a real problem that needs to be solved. We've done some studies ourselves in partnership with brands as well to understand how do you resolve it. We've done some work where people have asked us to evaluate whether not there was a person monitoring the rows that your product was in. Let's say you're a large brand and you have a high presence in a particular category. Sometimes there's relationships with the retailer that's supposed to be manned or personnel there is there. It's very hard to do at a large scale. So we've done some work there just trying to get

clarity of how do you address this problem. Retail more broadly upon, know, we kind of break the store very simply and retailers kind of own the outside of the store and brands really own the center store, right? don't see other than private label, which is an interesting growth that's happened over the years. But you really see retailers spending a heck of a lot of energy and you've got some really strong companies like the, well, most all of them now have.

really nice hot bars. I Publix does a pretty good job with that. ATB was kind of an early stage adopter early on that we saw doing a lot more work there. They've done a lot of progressive thinking about how do you position those products and how do you create that experience. we've seen obviously you see more and more space allocated to that fresh type of both prepared foods as the world gets to convenience is our life cycle. We're busier at work than I think we were. There's way more dual income households as a result of the necessity of cash.

in a household to live and raise children. So I think that convenience has driven a whole new layout to the store. know, retailers are spending a lot more energy that we spend a lot more energy there for retailers to understand how to competitively manage their assortment as well as how to properly price those assortments. Because the visibility is tough, right? Some of the convenience of a center store is

with all the brands and the clarity of UPC, there's a fairly common direct match. Not always, you may need some differences in sizes and so on that we need to create some linking engines which we use to build comparable matches. But by all accounts, the center store is reasonably mappable to one another to understand price positioning. The difficulty is the outside of the store and we've built quite a lot of capability there. We do tons of work in the meat. We've built a

I think that's the most important part, is meat and produce. far as loyalty from, first in the pricing and quality of the two main drivers, it's the primary basket driver as well in total price. The basket is our share of basket. So those are the central, other than the low frequency, but at a high frequency, those are the drivers. And the most challenging to maintain visibility to. So I think that's the main place that we've seen quite a bit of focus in retail.

is particularly meat coming back into produce. If you can drive a strong price image or price position there with a high quality because certainly people worry about quality. The biggest issue I think we've seen at least conveyed related to EECOM is that people like to pick those foods up. I think that the most probable driver of a visit is meat, seafood, fresh, and then your produce. That's driving

people like me to the store and then I'll buy the rest because I'm there. So that's kind of how we see it.

Phil Lempert (26:13)

So what you're saying is very interesting to me on two levels. Number one, that the retailer is in control and owns the perimeter and really needs to focus on that because that's what differentiates them from another retailer. So if I look at Center Store, do you think that

One idea.

or the future is going to be that we're going to go back to the way department stores used to be when we were growing up. That Revlon had the Revlon person at the Revlon counter. Are we going to see a Kellogg's counter? And it's a Kellogg's employee that's going to be manning that so that the store can really focus on the perimeter and not have to worry about those unemotional jars and boxes.

and cans.

Jake Blondin (27:02)

Yeah, I think it's, I think we're somewhere between those two points. I don't know that we'll ever get to that extreme, but I do think we're between those two points now. You know, between slotting fees and other systems that are out there, it's almost like you're consigning a section of space in that aisle or in that number of aisles. But let's say in that particular category, you've got a section and it's in your best interest to drive the quality of that experience for the consumer.

The retailer would do everything they can but their effort is to drive down available resources and so the end by all accounts The relationship has been trending over the last 15 years where the brands are taking more accountability Acknowledging like it's in my interest to make this experience at a high quality So I'm gonna make sure that this my section and those that have spent the most effort in that I think are seeing Performance benefits, which is a self propagating truth, right? mean if you have looks clean, it's

positioned well, it's faced well. You're taking more accountability there. And you're seeing more and more of that. So that's a lot of the work we're seeing us doing is just directly for a brand going and helping them make sure their section is winning. As far as the presentation, the shelving positioning, if they need to drive specific promos to drive activity and visual cues to the consumer, we're helping with that stuff. So that is certainly a trend we're seeing growing.

And I think it's a reasonable acknowledgement. mean, the retailer will get to it to the extent that they can. But there's a reality of when that can be. And their motivation is to drive a proper experience for the consumer, but at a cost basis that they can make a profit. So I'm seeing way more brand step.

Phil Lempert (28:37)

So with that, obviously there's a higher cost to the brand to be able to do that, whether it's they do it or our D solutions does it. Do you think as a result of that, we're going to see an SKU reduction so that the brand can really put more emphasis, more resources against their best selling products versus having, you know, eight

different size boxes of the same cereal.

Jake Blondin (29:05)

It's just, you you go to the rest of the world and you don't see this diversity of assortment, not at this magnitude. mean, think skew rationalization is a continuous process between category managers, category captains and brand. Obviously, what's the right answer? At the same time, as a consumer behavior, we're eager to have all these unusual flavors. I mean, I would argue we're seeing skew growth where you see these

flavors I never thought I wanted to try, but I still try it. And I'll tell you, my sons will try all of them. And I'm like, wow, that's a wild flavor. So I'm pretty good. So I think we have this continuous interest in new flavor variants. I think it's how you create energy and maintain energy around the brain. And you're also seeing tons of new disruptors come in perpetually, right? So if you're not innovating that next flavor, you know, I would argue like the progression of like healthy dog food is the most recent pattern I've seen.

that you're just seeing a lot more healthy dog food as a class of food production. You've seen definitely and it kind of follows a trend of the heck of the last 30 or 40 years, this trend away from like traditional canned and a lot more focus on fresh. I think you're seeing that manifest everywhere as we start to get more research and more and more people have a consideration. the cost is they're at odds, right? I mean, that may be your your bias, but you know, how do you how do you feed your family? think is the primary bias. So

There's space for everybody, but there's definitely a multitude of consumer personas out there now.

Phil Lempert (30:32)

So what I think I'm hearing you say is that we Americans are spoiled. That if you look at the rest of the world versus us, we want choice. We constantly want to be entertained by our food, whether it's new flavors, new shapes, new sizes, and things like that. And yeah, we're spoiled.

I did.

Jake Blondin (30:55)

I mean, unfortunately, I mean, I agree. I mean, it's, it is interesting to go somewhere else and no, but everyone you ask, so we say that, but nearly everyone you ask as an individual consumer would say it's overwhelming to go to any given category, hot sauce and the flavor variants. And you're like, if you spend twice as long shopping, because of the diversity, but that's also maybe in the favor of everybody that we're spending more time there shopping and trying different flavor variants. So

Yeah, I mean, you go into something in the UK and it's a fairly simple experience. It's a fairly moderate diversity of skews. And you pick one of the ones, which is probably the same one that your mom and dad ate, and you just keep going, right? My wife's family is all British, so definitely got used to a fairly consistent product pattern.

Phil Lempert (31:39)

So you mentioned earlier on some examples of online. How does a retailer and a brand bridge the gap between omnichannel, online, in-store experiences? What should they be looking at? I know, for example, when I look at

a retailer's website for food products. And I look at the nutritional information and the ingredients very often. I find it to be wrong, incorrect. So I'll go to the cupboard, look at it and say, hey, this doesn't make it. the picture that they've got on their website is of an old product, not the current product and so on. So is it because of the pandemic that retailers rushed?

a little too much to get online and there weren't the quality control in there for ingredients, nutritionals, photographs, and are we catching up? Are we doing a better job of it? Or is it a slippery slope?

Jake Blondin (32:39)

Well, I think everyone trying to do a better job. think the first question are we have we I mean, the growth in EECOM was incredible from 2020 to 2019 to 20 to 21 was 10 years of growth in two months. And of course, everyone it was out of necessity in many ways survival that everyone said we need. I mean, you can't go to a store or people aren't willing both. How do we first of all, we need groceries. So how does the consumer

get bed, but then also as a business, how do we maintain our business? I think obviously there was a huge rush to it, but it's also not easy. So I don't want to blame everybody. I mean, we manage really large databases of product information, millions and millions of records, and we have pretty large team that that's what they focus on is maintaining the catalog quality and the attribution. And so it's a lot of work. And, you know, you're having

switch out of items all the time consistently for a retailer and new products introduced. so I think it's a hard business. I think you're people are doing a reasonably good job. There's always a better job to do. I don't know that you're ever going to solve it to the nth degree. mean, we spend a lot of time helping folks do that better. But it takes a level of rigor and consistent

effort, which I think is unfortunate. Sometimes it gets addressed as a project versus a life cycle or life commitment. So it gets done. It's really, really nice. And then over time, it kind of fades away. And this is our behavior as a society. do that, but that's what we're seeing.

Phil Lempert (34:11)

So look into your crystal ball and look towards, you know, the rest of 2025. We're still in the first quarter. What do you see as the biggest challenge in 2025 and the biggest opportunity in 2025, both for CPG and for retail?

Jake Blondin (34:32)

Let's see. I would say.

don't really know, what would I say is the biggest opportunity?

mean, selfishly, and in at least what we're seeing, I think the contentious thing that everyone says is, is AI, but it's an easy, it's an easy statement. It's hard to do. Right. I mean, I think we're seeing, I guess it would be the opportunity and the challenge, right? Is this, I think it's a, I mean, I came out of semiconductors. So, you know, that was the early 2000s, 90s. That was late in that segment. But that was a life changing

Influence in compute capability right as a society and it drove huge shifts in how we operate I would assume AI is that but it's being talked about as if it's easy and actually getting it right is hard and I think that's what people are gonna struggle with and gain benefit from and so I think that's a huge focus that we spend time on is how do you really leverage AI for instance you ask J chat GPT a question it gives you an answer it feels great Let's get the question again

you'll actually get a different answer because the neural pathways aren't definitive, they're probability based. But those learnings need to be learned by everybody, right? And so there is a huge opportunity with AI, but I think it will take time. mean, if you think about all it is, it's really a ton of computers connected together with an incredible amount of computing capacity. So it can work way faster than all of us and address way more

cross-correlations and relationships than we could on a single device. But with that, if it's just that, then you still need to worry about the data quality you feed it, the means that you train it on your specific decisioning and bias that you have in decisioning. And so I think it's an incredible opportunity for industry, but it isn't just a plug it in and you're all set, you're done. I think unfortunately that's what I've run across this last year.

as we partner with people on some of the AI solutions that we implement, is they just expect you to plug it in and it's all done. We don't need any more people. Right? And that's kind of the, I mean, that's the, that's the pitch on TV, right? When you talk to anybody about what is this going to do to the world? Yeah, at some point, but that point isn't 2025. I don't think it's 2028. think it's years down the road, you'll find that you had 10 people doing this and now you have six, which is a meaningful

Phil Lempert (36:35)

Right.

Jake Blondin (36:55)

shift in total resource and those other four people, they're going to be doing something else. This interesting paradigm that I think is this fear and this opportunity in this is everyone's worried, well, they'll take all these jobs. But that's only under the premise that we don't have any more ideas. And I don't think we've ever been short on new things to think about and ideas to contemplate and things to build. so I think it's going to be a net benefit. It's certainly a thoughtfulness if I think about

you know, my sons and how they're thinking about school and where they focus on. You definitely want to be thoughtful about how you use AI and how you use broadly technology. I don't think we're going to use less data if we go all the way back to the start of our discussion. We're not going to be using less data tomorrow to make decisions. So if that's the case, then AI in its both challenge and its benefit will be that future of state. But every kid's going to have to know Python every single

Individuals gonna have to know how to interact with data and you leverage it to be meaningful insights But then you need to make sure we drive action off that so I think that is Growth learning opportunity and challenge that we'll all be in is acknowledging what it is what it isn't how to effectively leverage it and That's a huge focus for us as an organization given that we're a data company and I think We're seeing more and more brands more and more retailers

eager to use it, but I think it'll be this challenging learning process between all of us of like, yes, it can be meaningful, but we need to refine the model, tune the engines, build the data pipelines that represent your bias and your thinking about how you want this thing to act. And thing is a very broad statement, but I think that's kind of both being the same is really what I think we're going to see.

in the marketplace is the advent of AI. just hope the hype tempers and the recognition of the reality of how to truly implement it starts to become the norm in our society.

Phil Lempert (38:53)

Jake, thanks for these great insights. We have to keep this conversation going, but in the interest of time, we promised our folks that we would limit it to 45 minutes, and we're at that point. So we have to close the discussion, but I urge all of our attendees that you want to learn more or have questions, reach out by email. That's going to be the simplest way to do it, and the email's right on our screen.

Thank you for joining us.

Yeah, Jake, thanks. That was fabulous. Lee Courtney, any notes, anything that you want us to go back over?

Jake Blondin (39:30)

He's

This is the greatest day I've ever had. I just bought myself a present. This is amazing.

I assume you just cut that front end. is what I was assuming as I was doing it, right? Just cut that whole.

Phil Lempert (40:07)

Yeah. Yeah.

Jake Blondin (40:11)

That's what I figured, we cut that.

Phil Lempert (40:23)

and Courtney.

Yeah. Yeah, it was clear on this side.

Jake Blondin (40:32)

I didn't have a niece.

It's two different feeds that you're squishing,

Phil Lempert (40:59)

forward.

And I also like the last thing about AI being both the opportunity and the challenge.

Yes.

Jake Blondin (41:35)

Mm-hmm.

It's so the difficulty we have is actually on the client side. They're like, so your AI is just going to do all this. Why doesn't it just interpret everything you're thinking and take care of all of this for me? Like this was a discussion I think yesterday and I was like, I'm going to jump on you through the phone. It's pissing me off. Like it's so ignorant because like the message in the market is like easy, easy does everything. Cause that's what those guys are getting investments want it to be. It's no different than a computer. It's a ton of computers wired together.

So this.

Phil Lempert (43:06)

Yeah, but don't log out, Jake.

Jake Blondin (43:09)

Yeah, it's at 99 % uploading.

Yeah. I mean, I don't think people realize just to carry on that lame while we let this thing finish, but like, I don't think people realize that that engine, that AI tool that helps you stitch someone built on top of a fundamental AI solution, specifically that utility and kit for years. It's, it's a fully tuned and optimized solution. People are not, the problem is an ignorant.

Phil Lempert (43:26)

Hehehehehe

Jake Blondin (43:55)

person can actually hear it. But they, it's the problem. They built it to be so easy oriented. Yeah.

Phil Lempert (44:27)

you

Jake Blondin (44:40)

It's a doer. It's a doer, right? No, if you and I didn't say it because I didn't think it would be favor, but don't put yourself in a doer job. That's the fundamental. Don't be a doer. If you're a doer, you already made a bad decision earlier. Like is don't be a doer. Problem solving will never go away.

Phil Lempert (44:50)

Right.