Bryan Gildenberg Part VI of VI Predictions

Welcome to another episode of consumer engagement in an omnichannel world,

our co-hosts Sri Rajagopalan and Peter V.S. Bond explore how brands and retailers engage with consumers in-store, online and everywhere in between.

And now, Here's Sri and Peter.

Hello, everyone, welcome to consumer engagement in an omnichannel world.

I am your co-host, Peter V.S. Bond.

I'm joined as always by my friend and co-host Sri Rajagopalan, and we are entering the sixth part of a six part series called Living in an Omnichannel World.

And our special guest for all six episodes has been Bryan Gildenberg of Omnicom.

Bryan, welcome and please introduce yourself.

Good to be back. Sixth time's a charm. Hopefully we'll get it right this time.

So I'm Bryan Gildenberg, SVP of commerce for the Omnicom Retail Group, the collection of agencies within Omnicom, the massive global media company that does specialize in retail in all its forms. Now, digital, physical, QSR, telecom. You pick it, will do it.

Probably better known to most to you by the trading agencies the brands operate under which are now Integer TPM, Tracy Locke, TMA and Haygarth over in the UK.

So prior to that,
I know many of you from the twenty three

years I spent at Kantar overseeing
the global retail research practice.

So great to be back to time number
six and kinda sad it's the last one.

So we'll saved the best for last.

This is where we have no idea who's
willing to come back for more.

So we'll send it right away.

General, look at this.

We'll get this down. We'll hold a
series every week or two.

Well, we saved the best
for last for for SRI and I,

We've been talking about engaging
in some rank punditry on the industry.

And this is our opportunity to talk about
predictions for the future of retail.

I know that we all love to do that and we

do want to be held accountable
in the future for it.

But it's sure nice to predict where we

think things are going to go,
either from the knowledge captain himself.

Yeah.
So we're gonna get him on the record

and then we're gonna we'll
come back in a future episode.

Yeah.
See how wrong all of these were.


All right.

So reality or myth: the tipping point
for e-commerce has finally arrived.

Thoughts?

I think it depends on what you
mean by tipping point,

But I would say if I.
If you held me.

Yes or no, I'd say no.

And I know that's counterintuitive
and not the message of the day.

Since everybody's so jacked up about it.


I'll play devil's advocate.
Do it for a minute.

And not because e-commerce isn't important,

but because I think that from a shopper
point of view that e-commerce expanded

dramatically during the Covid era,
as we discussed in earlier podcast.

Not all that's going to stick.

So.

So I do think you're getting to a point
where you would have seen an acceleration

in the growth of e-commerce, which has
been a deeply linear phenomenon.

And so my objection to the phrase tipping

point in terms of from a shopper-retailer
point of view is that relatively gradual

and consistent trends don't
really have a tipping point.

They just kind of move.

So I think that from a sharper point
of view, I think that's probably where

where you're going,
where you're going to be.

I think that I think that the growth trend

for the next five years will be
more linear than exponential.

So so from that point of view, no,

I don't think it's a tipping point
from a brand's point of view, maybe.

And, you know, decisions that managers

make are driven as much
by narrative as by reality.

Sometimes. I think the narrative may have

changed enough that the resourcing
decisions that people were making

for 2021 and 2022,
which they're making now in the context

we're operating in, I think will enable
a critical mass on the brand side.

That might be more acute than
the actual shift in shopping behavior.

So for shoppers, I would say not a tipping

point, but that's only because I
don't think there ever will be one.

I think it's a continuum.

I think for brands, maybe.

And I think about the  average

salesperson  in e-commerce is probably losing sleep

right now, over one hundred percent growth
plan that they delivered in Q1 and Q2.

They have to replicate it next year into the budget.

Don't don't even get me started

on the amount of dumb planning that's
going to be done for twenty, twenty one.

So it's like, look, just I mean,

if you ever wanted to do zero based
budgeting, this is the time because

the numbers you're working
off of are utterly unrepeatable.

So why would you even try?

I just don't I just don't get the way
companies are approaching us.

Which is.
Well, you know, it's tough.

No, but we're gonna have to hit it, No that's silly, you are going to spend
a ton of money, try to do something.

that's just a mathematical coincidence.

So Peter and I decided I get to ask

you the coolest question of the six
episodes, which is voice and that

voice and AI, Bryan.

Is it just a passing trend
or is it a mortal to live forever?

And everybody better hop on.

I feel like that little girl GIF that appears on the Internet.

Why not both?

I think because I would say
again, forced to choose.

I would go with eternal rather than trend.

And just because especially AI.

Which is, you know,

 the ability for computers to solve
more problems without human intervention.

The trend that's going
to continue forever.

So, yes, AI will become
a bigger part of that.

And that's really all about the problem
that you're trying to solve.

I think with voice, I think voice is going
to end up being one of those things that

has some very specific
applications that make sense.

I don't think it's as transformational
a commercial platform as other people do.

That's my own personal kind of hesitancy.

You know, modern retail,

self serve retail was invented in 1920,
basically in the UK and the US.

Right.
So if you're a Brit,

you'll attribute Sainsbury's of your you
American, you'll attribute it

to Piggly Wiggly or King Kullen,
depending on where you're from.

Since then,
the history of shopping has been a 100

year pursuit of not using
your voice when you shop.

So the entire purpose of modern retail is
to not have to talk to the shopkeeper.

So, you know, I've often described I've

often described Alexa as
the world's slowest chronometer.

Right.
I mean, like what?

What are we.
What is that?

Why?
I think Voice has some very specific

applications that specifically when over
time it gets tied better to string.

I think so often people think about voice

in terms of Alexa and skills or
terms of the Google home assistant.

I think there's two vastly more

interesting and important
applications of voice.

Number one is the enormous quantity
of search today that gets done through

voice rather than typing,
which has a very different syntax to it

and understanding that it
is really important.

And second is, I do think that eventually,

as devices move to being voice and screen
enabled, the ability to respond the voice

without with something
that isn't voice becomes right.

I'll just be happy when my Alexa stops
activating every time a commercial about

Alexa comes on the television,
that really irritates me.

But my favorite is when you have two

of them in the same room and one of one
of which hears you say Alexa and the other

one of which hears your response.

Well,
I've been in many business planning

sessions on brand and retail sides
and all too often in the past.

After all, this tremendous work is done
at the last minute, someone says, hey,

email the digital team and have
them send over their three slides.

So are we going to see
e-commerce and digital

be a serious and important component
of business plans going forward?

Yeah, I think this is deeply related
to the answer to a question one.

And I think yes.
And I think this is one of the reasons why

I think this tipping
point moment will occur.

And.

These things.

Don't happen because they're
the right thing to do.

They happened because the forces of

change overcome
the forces of inertia.

Right.

So I think there's enough either enough
forces of change and in particular,

particularly for U.S. brands that are
listening to this podcast today,.

Now, Walmart's going to push
everybody there,Amazon is not.

And,
you know, and I think the more you need

to get an omnichannel,
Walmart Droid business plan,

you're just going to change the way
to join this is planning for everybody

because the Walmaart change,
you have enormous gravitational pull.

So in that case, yes,

I think you're looking at I think three
years from now that that'll be true

at the JBP level from a
strat plan point of view.

I just don't think.

I don't think the average board

of directors is going to be comfortable
with a management team that that doesn't

have e-commerce as part of its strong
parameters, that I don't think you're

going to get your job to keep
your job as a CEO if you can't.

Your

profound statement statement Bryan.

So.

So the next one is a fact
or fiction question, Bryan.

And that is,

is Amazon really the only or biggest
beneficiary of that kind of pandemic form?

Well, only the biggest are
two very different questions.

They may be the biggest.
They're certainly not the only.

And I know you and I
talked about this a lot.

The concentration of the American
retail ecosystem is way overblown.

And I don't know most people that think
America is a concentrated retail world.

I've never been to any other one.

So, you know, if you're a brand,

you're like, oh, God, you know,
the customers have so much power here.

Try Canada.

Loblaw is fifty five percent of
the market for consumables company there.

That's a customer of power.

You know, in most markets in the world,

you have three or four retailers
or 80 or 90 percent of the market.

You don't have that here and you won't.

America is too big and too polarized for one,
reach out to serve all of it.

So no Amazon won't be the only one.
All right.

Another one, brick and mortar stores: They're done with and we're moving to e-commerce,

be it BOPIS or
home delivery or ship to home.

True or false?
Not true, but not entirely false.

So, um, and I think you're I think there's

going to be I think there's a severe
economic problem with anything.

That's what I'll call mall based.

So and malls aren't really the primary
focus of our type of conversation,

but that's a different
topic for a different day.

But yeah, I think mall based retailers got

a host of problems or to be
difficult to overcome.

So I'm not sure that malls
make a comeback.

But look, I think
I know right now, you know.

Even with McKinsey's most exaggerated

and breathless statistics on e-commerce,
you're still looking at over 70 percent

of the American reach our world
that's being sold through stores.

And that's with vast quantities
of retail square footage closed.

So.
So I think America is going to be

a predominantly store based retail
shopping world for as long as it matters.

At some point it will stop mattering
because the integration between the store

and the online experience
will be seamless.

And you're just not going to be able

to know or care whether a purchase
a quote  "store based" or not.

But until that moment, America will
be more store based than digital.

I'm going to jump to the drug channel.

You know, often the drug channel has not
gotten a great deal of pat on their back.

For now, we're five and a half
episodes into it, I don't think we've talked about it once.

So the I feel the drug channel is one
of those in the last three,

four months during the current epidemic,
really picked up its step on digital

retail and also became the favorite kind
of neighborhood store for most people

because most large stores were physically
closed or you had to drive to it and you had

a shelter in place order
and things of that nature.

Does the drug channel make a comeback in
a big way when all this is said and done?

If I had to go yes or no, I would go no.

And that's got nothing to do
with anything you've just mentioned.

It's just you have to remember that what

you've just mentioned is a tiny part
of a drug store's business,

particularly CVS, where retail is
a tiny part of CVS's company.

Non-pharmacy retail is a tiny part
of the retail business.

Online is a tiny part of their
non pharmacy retail business.

And click & collect is a tiny
part of their online business.

So, yes, Peter is very graphically

showing me the look at all
the kudos to them they're doing nice work.

Nice work.
And, you know, let me complete the play.

Yeah.
It's just it's a really,

really I think the future of the drug
stores is so much more dependent on

what happens to the economics
of pharmaceutical distribution than

anything else that I would
I would be I wouldn't say.

Yes, that this is going to change
the drugstores fortunes materially without

massive evidence that something else was
happening in the health care ecosystem

that changed the way the drug stores
were going to distribute prescriptions.

I think over time,
the economics of the prescription industry

are going to fundamentally change
drugstores in a way that

I think they'll end up looking
very different than they do now.

But that's a different topic.

I think the drug channel could flip

the model that CVS built with Target,
where Target realized they were losing

money with pharmacy,
but they needed the traffic draw.

And so they sold their
in-store pharmacies to CVS.

CBS is making money, obviously,
off of its pharmacy.

But the front of the store, to your point,

is that decreasingly important component
of their overall business model

And so selling
the front of the store at Walgreens or CVS

that's basically what Walgreens is doing now

So where Kroger started
to take over the food section.

FedEx is taken over what used to be
the photo area with all that stuff.

Yes, I think that makes
sense for our drug store.

To be honest, the proximity they bring

to the table is probably of more value
to more value to other people than it is

to the way in which they're
choosing to monetize it right now.

Right now, I see Amazon lockers in every
store across the country in no time.

In any event.

So Click and Clack,
it's here to stay and it's going to be

the primary driver of growth
within within e-commerce.

I think for grocery, yes.

And I have always thought that,

you know, we talked about this
quickly on an earlier podcast.

I think I think American shoppers are far

more likely to find a solution convenient
when they can determine when they are

going to go pick it up in their car
rather than when they need to be home.

Americans are car based,

particularly when we start to get back
to more normal life, particularly suburban

families with kids,
with people to buy a disproportionate amount

of the groceries in America that
the click & collect model here.

Also economically just makes
more sense for the retailers.

If you look at the geographic distribution

of the United States
and then you look at the model that we

always try to draw from, from an
e-commerce point of view, it's the UK.

The UK doesn't look anything like the US

from a population
distribution point of view.

The UK actually looks a lot like it's a
scrunched up, sideways version of Canada.

So the country that the US looks the most

like as France from a geographic
distribution point of view.

All of e-commerce grocery in France is
click & collect for the same reason

that it'll probably be click & collect here,
which is just it's too hard to build

a model of last mile logistics
that doesn't involve stores.

People just don't live
close enough together.

So if the stores are going to be involved,
then it's just the economic tradeoffs

between somebody being able to use their
car out on a variety of errands and bring

it back versus somebody having
to pay for the delivery pieces.

Just it's just too
compelling the other way.

So, yeah, click & collect in grocery will be huge.

I think for for other categories that aren't
grocery that that'll be a little bit mix.

Well, the final question

of this entire series goes to Sri,
and to quote the immortal words

of the knight at the end of Indiana Jones
and the Last Crusade, Sri "choose wisely."

I am honored I get the last word.

I am going to choose wisely and it has

to come with my last one year
theory of the wonderful

NACDS down in Florida.

Bryan when you and I run into each other
every single year for a while.

And the occasional
dip in Arizona by Camelback Resort.

Yeah.

And that question, Bryan,
is I've had the theory that with this

shifting focus into digital retail
that there will come a point in time

at NACDS when the retailer as most
of you know, NACDS as the primary purpose

is to have the top to top and discuss
an innovation pipeline.

Is there a world coming up in the next year
where the customer, the retailer is asking

a brand if you want to bring
an innovation pipeline to be an in-store?

I want to see a test and learn with data

that you've already tried it in some
limited scale and it's going to work.

I need to change my answer that I had for
this and probably say yes and here's why.

You're going to be competing for shelf

space, mostly in all likelihood,
with brands that have built a presence

somewhere else, either through DTC or through smaller outlets.

They're going to have a fact set
that comes to that when they come

to the table that allows them to say,
here's here's what we're doing,

here's how it will amplify,
and here's how we take our audience,

which we know,
and then attach it to your audience

segments and amplify in a very
natural, logical digital way.

So I actually think it's I think through
the answer to this that I don't think

data on innovation is going
to be particularly critical.

What you're going to need is an audience

in order to use the retailer's
broader ecosystem to amplify it.

And you're not going to be out of an
audience without some sort of activity.

I'm not if I'm a retailer and I have

a choice between two brands,
one of which has a proven audience

with data behind it, but I know
I can bolt it into my ecosystem.

The other one as a hypothetical
segmentation that isn't tied to any

behavior, but it's just mapped
against some other brand.

I'm going to pick the one that's real.

So, yeah, I think that this ability
to this ability to test and learn to be

able to get to enough data about
an audience to be able to construct

an audience well enough to be able to bolt
it into the ecosystem is the big piece.

And, you know,
as segments become audiences, that's

that's probably of all the things
we haven't talked about yet.

Probably the most profound change that's
going to happen to the marketing

ecosystem, a world of audiences
is a more bottom up world.

The world of segments is
a very top down world.

And I think that can rewire way a lot
of the way that innovation takes place.

If you thought about what's
the audience that's going to.

congeal or coalesce around
around this brand proposition.

And then how easily can I amplify
that audience through through data

retargeting, a mobile like
monologue into a bigger audience?

How do I use the retailer's audience
based eco system to be able to do that?

So, Bryan, what I what I really take away

from that is, you know,
if you're walking in with an audience

and explaining what the audience is,
DTC is really not negotiable anymore.

But I don't mean a scale DTC for fifty

thousand point competing with fifty
thousand points of distribution.

It's really all this very
experiment and test and learn.

Yeah.
Well it's.

And it gets back to 

Not we're not talking about media anymore
because there's a last podcast,

but it gets back to the single greatest
thing I've heard about media in my entire

life, which is the old
the old chairman of GroupM

Irwin Gotlieb
we're in a meeting once and Irwin had

a way of saying stuff like this,
it was really profound just all around.

You know what all this re
making money and media.

It's when somebody knows
more than somebody else.

And that observation is so powerful when

you actually apply it
to the world that we're in now.

The purpose of DTC for most
companies won't be to sell stuff.

It'll be to be on the right side of what

I'll call the Irwin Gotlieb equation.

I don't know enough so that to reach our

media, I don't somebody
doesn't know more than I do.

And right now, the people that know more

than I do with Google and Facebook,
who wall gardened that knowledge off

in a way that creates
enormous economic advantage.

And without without knowing
something that's gonna be difficult.

That being said, DTC propositions
that are only built to gather data, fail.

You need a real reason
for that proposition to exist.

Sorry, I know I probably went to overtime

by answering that, but I think it's
a really, really, really important question.

I thought it was a must address.
Well, Bryan. 

I think he proved to our audience

that you know a lot more about
this than Sri and I do.

And we are still so grateful.

But I do much more that I
talked to more than you did.

But I also found out that my mentor
will agree to disagree.

But in any event, we're so grateful
to have had you for this six part series.

What a tremendous episode.

What a tremendous series, Sri.

Any parting words on your end
before I go into our closing?

Bryan, thank you so much again.

I mean, we talked a lot about
the consumer, about retail.

We talked about specific retailers,
about opportunities, about where media.

My favorite topic is gonna go.

I can't thank you enough.

And you're always welcome
back in the show.

I hope you will come back and we will be

in a conversation, the three of us,
so we can provide much more value to our

audiences whether they listen whether they read or
whether they watch.

 Any time, guys.

As always, thank you.
Yeah.

We're gonna give him tenured
professorship in our in our audience.

In any event, would

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Again, Bryan, thank you
for joining us, Sri.

Thank you.
And we look forward to our next episode

of Consumer Engagement
in an omnichannel world.

Until then, Sri and I are saying goodbye.