00:00Kate, great to have you, especially on the heels of this conference.
00:02And I wonder if you came away with a cohesive message or if the message was lack of cohesion and
00:08divergence,
00:08and if that's the point now among these companies.
00:10Yes, so I think divergence is probably fair, but at the same time, there wasn't any kind of real panic
00:17about the health of the consumer.
00:18If we had to really juxtapose what we heard at our conference this year versus last year, I think the
00:23biggest difference is just the war.
00:25There is a lot more inflation because of that. Gas prices are obviously higher.
00:30All consumers have to contend with that, but especially the lower income consumer that's been dealing with a lot of
00:35inflation in general now has the added inflation of gas.
00:39Okay, are we seeing like an inventory management change?
00:42Obviously, we've had these supply shocks. Tariffs sort of got everything going all at once, a front run,
00:47and then we sort of saw a more pronounced sort of cycle, really, in inventory going into sort of the
00:52summer.
00:52Now we're obviously in the restock and we're getting ready for the holidays, but of course, these supply shocks have
00:57continued.
00:57They've changed form, as you just said.
00:59So when is management sort of going to have to, I guess, either accept that this is a continuation of
01:03a real structural change,
01:04or is it basically we're still hoping to get to the year end and maybe things will get alleviated?
01:08Yeah, a lot has been difficult when it comes to the supply chain, just given the state of the world.
01:14They were contending with tariffs last year.
01:16There was some sourcing that had to be changed as a result of that.
01:19This year seems a little bit easier relative to last year, just in terms of being able to get your
01:24hands on the goods that you want on the shelves.
01:27And so we do expect a slightly better holiday in that regard, where there are retailers that are going to
01:33be selling what they want to sell
01:34versus maybe compromising what they had to come up with last year.
01:38Obviously, the cost of everything is going to be higher on the freight side.
01:43A lot of the retailers are locked in right now with ocean freight.
01:46Those will come up for negotiations come the spring, but for now, that's locked in.
01:50Diesel, obviously, is a little bit of an issue on the trucking side.
01:54So if you can get what you want, you can be more deliberate about your strategy.
01:57And there are companies like Macy's, for example, that are trying to bring in a higher income consumer
02:01and bringing in those higher end, closer to luxury type products.
02:05And I wonder what you make of that bet at this moment.
02:07I mean, the K-shape has been talked about ad nauseum,
02:09but is that kind of the winning strategy for some of these retailers,
02:12just try to capture the higher end consumer right now?
02:15Yes, it's a great question.
02:17The K-shaped economy is real.
02:19And I think even the discounters, we cover Dollar General, Dollar Tree,
02:24they are seeing more trade in from that $100,000K income consumer than they have previously.
02:29And I think it's a testament to just, again, there's been so much inflation.
02:33No matter what income demographic you are in, you are looking for more value.
02:38So, I mean, this week's big theme is this MetaMuse development, which empowers the consumer.
02:42I know we talked basically about how it's hitting the service sector a little bit more,
02:45and the Citrini note was sort of that.
02:47But I have to imagine that this probably came up a little bit in the conference.
02:51You know, you've got guys now that can basically have better price discovery.
02:54That never had that before, and that's obviously the information asymmetry changes greatly.
02:58I mean, how does management speak in this,
03:00or is this something they're still waiting to kind of see how it comes?
03:02I think we cover Walmart, and they probably have been the most prolific in terms of what they have talked
03:08about with regards to agentic commerce.
03:10And I think as of right now, you know, what these platforms are built for are to offer the best
03:15prices, the speediest, the most value.
03:18And so for someone like Walmart, you know, that speaks very well to what their proposition is.
03:23But we haven't really heard as much on the agentic commerce front from other retailers.
03:28It's been more on the efficiency side, on the cost side, where they're trying to find more efficiencies.
03:33Is there a divergence if you are a Walmart or even an Amazon,
03:37and you have the financial firepower to invest in these things versus smaller companies that maybe,
03:43one, don't have the ability to, like, hire a consultant and be like, what should we do with this stuff?
03:47Or maybe have to go to more open source modeling.
03:49Is there a difference in strategy and being able to execute that strategy depending on just how many resources you
03:55have?
03:55I think so.
03:56I mean, I do think that is kind of the testament to everything that's going on in the world today,
04:01that the size and scale of your business, your ability to invest in things,
04:06is going to differentiate you from some of the smaller players.
04:09Again, you know, the supply chain was a big differentiator.
04:13The bigger you were, the more scale you had, the more negotiation you had.
04:16So this is a continuation of what the tariff situation sort of showed us, right?
04:19Might makes right.
04:20And in a lot of ways, you can still lean into brand loyalty,
04:23and you can still sort of tinker with ways to keep, you know, the consumer engaged with you.
04:27But ultimately, it's about the execution.
04:29And then, again, the Walmarts of the world are exceptionally good at this.
04:32That's right.
04:33Execution, for sure.
04:35I mean, I think innovation still is very much at the forefront of what the consumer is willing to pay
04:40for.
04:41Newness, innovation, and that can come in consumer electronics.
04:44It can come in fashion.
04:46Yeah, is this what's helping Best Buy?
04:47Just real quick.
04:48Yeah, for Best Buy, I think so.
04:51It is better execution at Best Buy.
04:52Appliances has been a drag on their comp for a while.
04:54It seems to have stabilized now.
04:56You might have, you know, a better product cycle coming up with RGB TVs.
05:01Computing continues to drive their results.
