May 18, 2020: Traditional malls reopen, live streaming and the shift to digital, PepsiCo’s move into DTC

No time for news? We’ve got you covered. Welcome to the Retail Rundown, your go-to weekly podcast where RETHINK Retail teams up with industry experts to deliver the top trending news stories in retail.

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Hosted and written by Julia Raymond

Written and produced by Gabriella Bock

Edited by Trenton Waller

 

TRANSCRIPTION

Julia Raymond:
Today we’re joined by guests David Adelman and Tony D’Onofrio. David is the president of TAG, and prior to founding his retail strategy company in 2015, David spent over two decades in senior roles working with major international brands including Natuzzi, Palliser, Thomasville, and Bauhaus.

Julia Raymond:
Tony is the CEO of TD Insights, a respected industry futurist and recognized Global Top 100 retail influencer. Tony is also a RETHINK Retail advisor and regular Retail Rundown commentator. David, Tony, thank you both for joining today.

David Adelman:
Thank you for having me. It’s a pleasure.

Julia Raymond:
The first segment we’ll go over is about Simon Property. The group is the biggest mall operator in the United States, and they plan to reopen 50% of its indoor and outdoor shopping malls this week. Some of those plans were backpedaled, however, after the mall group received pushback from local governments in hard-hit areas of New York and Indiana. And states where malls were allowed to reopen such as North Carolina, but traffic remain light at traditional indoor malls or large retailers like Macy’s and Banana Republic remained closed. And questions still linger as to whether reopening anchors will be enough to attract apparel shoppers back in store. There was an interesting survey I ran across by a predictive analytics company, First Insight, and it showed that 65% of women and 54% of men said they will not feel safe trying on clothes in dressing rooms or feel comfortable working with sales associates in-store due to the COVID-19 crisis.

Julia Raymond:
David, I’ll pass this to you first. What changes do you think shopping malls and apparel stores will need to implement in order to regain that consumer confidence?

David Adelman:
Thanks, Julia. First of all, I have some firsthand experience with Class A mall clients here in Vancouver BC here. We have an open air mall here, which anchors Walmart, Best Buy, and Whole Foods. First of all, let me start by saying, all brick and mortar stores, I believe, regardless of category, needed to maintain constant contact with their customer throughout the start of this pandemic. And I think this is imperative because what it does, it keeps the customer in constant contact so they’re being apprised of what’s happening, any updates, so when the time does come for the retailer to open, the consumer feels much more in line with what’s going on and they feel much safer.

David Adelman:
So trust, to me, is a determining factor, definitely, for any brand or during this pandemic. So as far as the mall and retailers, I think number one is safety, of course, without saying, obviously safety is number one. So we have to provide a safe environment, and protocols must be in place, but not only by listing them. So Simon Properties has done a fantastic job, I looked at their website, by listing all the protocols. It’s actually very detailed. However, I think when customers come to the mall, they have to show this. So it’s one thing to talk about it, but you have to actually have to show it.

David Adelman:
So I think signage in place, sanitization stations, one-way exits and entrances from all the stores, mall staff enforce sanitizing handrails, crowd control, social distancing, and customers actually seeing staff everywhere doing this work. I think for apparel retailers, it’s going to be very tough, of course, as far as coming back from this. I think that one-on-one service with appointments, was a way that I had a lot of my clients maintain contact, to and sales, with their customers before actually opening.

Julia Raymond:
I just want to ask with your customers, with the one-to-one, was that FaceTiming, live streaming or one-to-one appointments in-store?

David Adelman:
No, this was actually one-on-one service in-store with protocols in place, so that’s very important that protocols are in place, so offering to wear a face mask, having a hand sanitizer at the door, having the customer use the hand sanitizer before arriving and maintaining a safe distance. So those are very important when you do one-on-ones. I do feel though, however, that obviously online, for apparel companies, YouTube videos showing items, people modeling, different outfits, various sizes, is also very important as well.

Julia Raymond:
You said to keep the customer in constant contact with the brand or retailer throughout this pandemic has been key to being able to drive them back into stores when they reopen. Tony, what are your thoughts in response to David?

Tony D’Onofrio:
So to me, it’s about one word repeated as many times as you can, and David said it. It’s safety, and I’ll repeat it again, safety and safety. And in fact, I’ll add, Julia, to some of the data that you stated. First Insight expanded on where consumers feel safest. Malls are ranked last. So only 35% of the consumers ranked more or less where they will feel safest, and right just above them is department stores at 37%. They felt safest in grocery stores and drugstores, so malls have an uphill battle. And they also have a lot of areas where consumers, again, reinforcing the data that you said earlier have concerns. So 65% of women would not feel safe trying clothes in a fitting room. 78% would not feel testing beauty products, 66% will not feel working with a sales associate, so safety is the number one concern going into stores. So near term, it’s all about safety and really everybody needs to be talking about contactless and figuring out how much contact these experiences and minimizes their areas of risk.

Tony D’Onofrio:
So both Macy’s or Nordstrom, for example, have announced that they’re closing a portion of the fitting rooms. Gap is actually causing all of them. And to me, what was interesting this week or the past few weeks is reading the new Nordstrom experience, so this is the Nordstrom experience. Limit the number of people come into the store, clean every fitting room after use, quarantine clothes that have been tried for a period of time, increase cleaning and sanitizing in high traffic area, Plexiglas at checkout, contactless payment, drive-through for pickup, suspend services such as alterations and beauty services, and no more in-person styling. Now we’re going to do it virtual.

Tony D’Onofrio:
So, the world is changing a lot for malls. So there are three things to me that come out of all this. One is they have to project at that safety message, exactly what David was saying earlier across everywhere. And for consumers, I think they’re going to, near term they’re going to want to smell more bleach and less perfume walking into a story. One of the things that I see. So, and then second, I think it’s very, very important they focus on training the associates, so they’re communicating the right level of safety and make the consumer comfortable. And then third, I think exactly to what David was mentioning earlier in terms of Simon Malls, and you were mentioning on Simon Malls, is being very, very vocal from a marketing point of view, the whole precautions and all the steps that everyone is taking to make a consumer feel safe walking into a mall.

Julia Raymond:
Great points Tony, thank you for looking some of those up. You said Macy’s is closing a portion of their fitting room, Nordstrom, which traditionally had in-store stylists, now that’s all going virtual, and then you said three things. You have to project the safety message to customers. They want to smell bleach, rather than perfume. The cleaning has to be substantial, and then they need to communicate effectively to all their associates. On that third point, do you think that will be a challenge for retailers to effectively communicate with their employees, considering some have been laid off, they’re having to hire new staff, things like that?

Tony D’Onofrio:
So I do think digital communications improved that. I mean, they should be having a lot of training sessions right now in terms of how you work with customers and when to come into the store, what to do, not to do to make sure that you carry that safety message, the whole protocol en masse, and so on, because what I’ve also seen is that it can get very nasty very quickly, and all of us have seen the videos of people walk into stores without masks. And there was one incident, actually, in one of the stores where someone broke an arm because they got into a major fight with a person who wasn’t wearing a mask.

Tony D’Onofrio:
So there’s a lot of training that needs to be taken in terms of how you handle situations, focusing on safety, but also how do you handle things that can escalate, because right now, it’s an uncertain time for everyone.

Julia Raymond:
It’s definitely uncertain, and that story is crazy. It’s surprising to me, personally, I have someone in my network that posted a photo they were in Marshalls the other day, and now I’m located in Florida, where things are starting to reopen, and the line was all the way to the back of the store from the registers. And that was last week.

Tony D’Onofrio:
That’s good news, and you also saw, Julia, that the line that Chanel in China, long line to get into the store. So I do think apparel and luxury, and those brands, they have strong branding. They will be back.

David Adelman:
Yeah, if I can chime in for one sec. I just think that, like I said, the brands that have stayed in touch and the brands that have a sense of community, I think they will continue to do well, especially ones with good balance sheets. Of course, we know there are a lot with terrible balance sheets before this virus started, which we’ll see big fallout from. But I do think we need to show, not just say, and that’s the thing. When people are lined up, we have to be six feet apart. There have to be stickers on the floor. There has to be security. So, all these measures, like Tony said, they must be in place for people to feel safe. Absolutely.

Julia Raymond:
Great comments, Tony and David. Now we’ll move on to segment two, chatting a little bit about consumer behavior, which has been top of mind as stores begin to reopen. How will people react? How are people feeling and I know we just touched on that. But last week, Adobe released its digital economy index, which analyzes more than 1 trillion online transactions across 100 million products SKUs, and this is for 80 of the top 100 US digital retailers, and the index showed that digital commerce jumped 49% in April, and as more shoppers move online, the majority of retailers believe at least 40% of them will stay online, according to a Commerce Next survey from last month.

Julia Raymond:
So even as governments are lifting restrictions, retailers are implementing their reopening strategies, the recovery timeline for in-store traffic remains questionable. And when we look to China, we see that contactless retail incorporates a greater focus on many digital channels, and this includes live streaming. And Tony, since I have you on the show, I wanted to bring this up because you’re so knowledgeable about the Chinese market from your work history, so if we look at the fact that half a billion Chinese engage in live streaming, and Alibaba’s Taobao said that just last year, 400 million users watched its livestream shopping shows, which are hosted by brands and influencers, and it generated $20 billion. Will live streaming take off to the same degree in markets outside of China?

Tony D’Onofrio:
Julia, that’s a good question. And to me, the reason I follow China is that China is ahead of the rest of the world in digital commerce, and if you want to study examples in terms of what to do next, they actually are taking the lead. So for example they have 600 million people that use mobile payments. Face recognition is widespread. In fact, it’s now being used more for payment, cashier-less stores are in the hundreds versus we only have been in the dozens or less in the US, and even less in Europe. I do think live streaming has a possibility because we have the bones of it, for example in the US, with QVC and Home Shopping Network, but that’s not enough. If you look at what the China market is doing with live streaming, it’s more about really getting content market included in it, having influencers be live, and a lot of entertainment. So hosts are, they’re actually celebrities in the market. They’re micro-influencers and they engage very, very heavily with the audience. In fact, during flash sales, they’ll actually call out their followers by name, and say, “You need to take advantage of this deal now.”

Julia Raymond:
Wow.

David Adelman:
Wow.

Tony D’Onofrio:
So there heavy, heavy focus on entertainment, which to me is a critical component of retail going forward, so it’s about making shopping fun. The challenge for the US and other Western markets is that it’s coming in places where it will help in segments that are struggling. So the last forecast that I just saw, department stores will be down 29% this year, especially soft goods, which includes apparel, will be down 20% this year.

Tony D’Onofrio:
So, it is a good idea. I’m not sure that the brands that are struggling or have the appetite to invest, to really turn shopping into entertainment, with the stats that you cited in terms of really creating a new channel of live stream.

Julia Raymond:
David, what’s your take? I know you work with a lot of retailers. Is this top of mind for any of them?

David Adelman:
In particular, right now, I’ll be honest with you. When you mentioned it, I actually researched it a bit because I wasn’t as familiar with it as I probably should have been. But I believe they’re calling it entertain-mers, so I’ve seen, which is a weird name, I know. But we are living in a visual world. I mean, we’ve gone from some typeface back in the old days and script and copy to social media platforms that involve pictures, videos, images, and it’s just progressing.

David Adelman:
I believe a recent study I saw from MIT, said that the brain processes 90% of information visually, which was really shocked me because I thought we have other senses. Sense of smell is very important. Our oral processes are very important. But I think this platform by Taobao, I think it’s amazing. It makes QVC, I hate to say it, look like it’s still in the 1950s.

Tony D’Onofrio:
You are right. You are right.

David Adelman:
When I watch the show now, I’m like, “Oh my God. QVC takes me back now.” But the contrast is severe. But yeah, I think it involves the best of all worlds, really. You can put your best salesperson out there, where, normally, in a retail store, you can’t always do that. You can put your influencer out there. You can have the actors, live demos, and then sell it right online, right as you’re experiencing it. So, I don’t know. What could be better than that? I think adoption might be better amongst Gen Z and millennials, as opposed to boomers, because they’re used to these types of interfaces, but, yeah, I believe it is the future but I think it’ll take a while to adapt in North America for sure.

Julia Raymond:
I agree it will definitely take a while, and I think there are some parallels between Taobao’s live streaming and Instagram’s live stories. Influencers are constantly sharing products on their live stories, and also on their stories in general. So I think that is growing, and maybe we’ll see some pickup there, but I noted that in China, some of the influencers take up to 30% commission and things like that, and I also had an interview with Ashley Dudarenok, who covers the Chinese market, and she said it’s not as profitable as you would think for brands to do live streaming. Is that what you’ve heard Tony?

Tony D’Onofrio:
No, that totally makes sense, but you got to remember that, and in fact, we’ll talk about this later in some of the other topics, the store is the most profitable place for retail. E-commerce and all these other channels tend to take profit because you end up adding additional cost, and all you have to do is listen to the last Amazon call where they basically made a lot on the top line when making nothing on the bottom line because they’re spending it all to actually keep the channel going. So, I do think that livestream is an example that it gets you there but it’s got to be part of the mix, not the end-all solution.

Julia Raymond:
And Amazon has dabbled in live streaming, but it hasn’t taken off and a lot of reports I was reading say that’s probably because they’re not working with brands that are as well known. When you compare it to Taobao in China. But when we think about all the, I mean the bottom lines aren’t doing well, the returns are a big topic that retailers are concerned about with the uptick in digital e-commerce orders. But what new habits do you think will be cemented into consumer behavior after the pandemic?

Tony D’Onofrio:
I can start with that. To me, I came up with five so far and I think they will keep coming. The study that I saw, it takes about 66 days to form a new habit, and that’s how long we’ve been on lockdown. So we’re creating a lot of different habits, so I think number one is we are going to move more online in terms of shopping. But it’s not the percentage that it’s going to take over the world, so Forrester just issued a new forecast post-COVID-19, where e-commerce is going to end 2020 because of COVID, and they only raised it by 2%.

Tony D’Onofrio:
So they went from 19% to 21% of total sales, so it’s not taking over the world and the three reasons they cited is most online experiences. And we just talked about live streaming, in most of the world, they’re mediocre. They’re not that great in terms of experiences. Second, consumers like experiences and don’t like to shop on just one channel. And third, what we just talked about, it’s expensive. Ecommerce alone is expensive, and that’s why you see all these companies diversifying so that is number one. Number two is greater adoption of contactless commerce. So that is coming, and there are all kinds of ways, and there’s key technology evolving to make it possible, such as computer vision, smart shelves, RFID, artificial intelligence. There’s a lot of technology coming at contactless. Third is you’re going to hear a lot more about curbside retail. So we’re going to be doing shopping at the curb. And in fact, the numbers, the second-most important technology retailers are searching for right now is curbside checkout. Number one is home delivery and number three is contactless payment. So how do you actually do retail at the curb is going to be interesting.

Tony D’Onofrio:
Then I think the role of groceries is going to evolve, and you’re going to see grocers and restaurants becoming almost the same in terms of value. You’re going to see a lot more pickups for prepared food and groceries. And finally, it’s actually the trend we’re going to talk about next, for CPGs. Their role in retail is going to evolve. So those are some of mine.

Julia Raymond:
Really great key points. Do you want to build on any of those, David, or bring any new ones you were thinking about?

David Adelman:
Sure. I agree with Tony. I do listen to the studies. Of course, I’m more of a behaviorist, but I do feel that we will see definitely things sticking for sure from online habits. But we’re all social beings. I think that no matter what, brick and mortar stores will continue to thrive once we get through this pandemic, when the virus, when the, sorry, a cure is found. But I think as far as DTC stores go, I mean, look around you. All of these stores, like Tony said, that have started up that were amazing. Like, for instance, Wayfair, Casper, a lot of these stores have great revenue but they don’t have any profit. So, all these investors, VC funds, are looking very carefully now that all these companies and all these startups now. How are you going to make money? We have the sales. We can do $100 million, but how are you going to overcome all these costs? Right? How are you going to overcome all the returns? How are you going to overcome all of the expenses that you have to pay to be a DTC company?

David Adelman:
And you mentioned groceries. I mean Kroger, I read, is turning some of their stores strictly into distribution centers for pickups. So I know we saw an enormous increase in two days with grocery, but this is what’s happening. I was at Best Buy the other day and there were 25 people outside waiting for curbside pickup.

Julia Raymond:
Wow.

David Adelman:
These poor stores. It’s been thrust upon them in a matter of days, and they’re trying to do the best they can, including grocery, but a lot of them are failing miserably at it. But I think this is a starting point, what we’re going to see more and more of down the road. For sure.

Julia Raymond:
And good point about Kroger testing out the distribution center for pickup. I think perhaps in the future, grocery stores could become almost like an Amazon warehouse, where they’re somewhat automated to do the picking.

David Adelman:
Bed Bath and Beyond is doing the same thing as well right now.

Tony D’Onofrio:
Right.

David Adelman:
So, we are seeing transitions and you have to be able, I think, in today’s type of economy and world, you have to be able to adapt, and I think that’s key. Some of these behemoths, including department stores, it’s very hard for them to transition during periods of economic downturn or during things, external factors like this virus. So I think there’s going to be difficult times. I think there’s going to be a lot of adjustment happening, and a lot of exciting things coming. But in the end, brick and mortar will survive. And I think it will come through stronger than ever. Right? Out of the diversity comes ingenuity.

David Adelman:
Yeah, yeah, I always say that. Out of diversity comes ingenuity, and I think we always, as a human race, will come out of diversity, and we will come out from this as well.

Tony D’Onofrio:
No, I totally agree with you, David. Stores are not going to go away, they’re going to be a key part of the mix. In fact, they are the most profitable part of the mix. It’s a key of how you actually create multiple channels for consumer and you get to a balance. Ultimately, it’s about to get to a balanced commerce model, and I think that’s possible because you see that in terms of what the online folks are doing, as you said, versus the offline folks. So in other words, the online folks are out opening stores, and then vice versa. The ones that have physical stores are building their digital presence, and you look at Walmart, for example, how they came back along with their services. That’s really what brought them back versus a few years ago, then being brought off that Amazon was going to walk all over them.

Julia Raymond:
They really turned that round, didn’t they?

Tony D’Onofrio:
Yes.

David Adelman:
Well, their express delivery is amazing right now, and that’s something I guess we’ll talk about in a bit as well.

Julia Raymond:
Great, well you guys brought up DTCs, and also just how behemoths are responding during the pandemic. And there was some interesting news. It generated a lot of buzz on a LinkedIn post I made the other day, but it’s PepsiCo. They launched two new direct to consumer websites. One is called pantryshop.com, and the other is snacks.com, and they allow customers to purchase chips, sodas, sports drinks, and other snacks directly from PepsiCo brands and have them shipped to their homes. A Forbes article last week suggested that subscription services have “never been easier to sell” from off the record conversations with 12 CEOs of subscription service companies. Now, I want to note that Pepsi’s offering does not seem to have a subscription component, but I think when we’re talking about DTCs, it’s important to throw this news in there about subscription services on the rise right now because historically they perform best when the economy is doing well and expendable income is high, so it’s a really interesting mix here. And David, I’d like to pass this to you first and just get your thoughts. Is Pepsi’s new offering the right move, considering the competition from Amazon, Walmart, and the like?

David Adelman:
Well, thanks, Julia. I think for time here, I’m going to include both pantryshop.com and snack.com in the same category, although they do carry some different products. I think we’re looking at basically a subscription-type package here, and I think it’s somewhere between essential and discovery. I don’t know if it’s quite one or the other. But to start, I think DTC with consumer packaged goods is very different than with non-consumables. For instance, like a Nike or a Dyson, they all want total control over their branding and their reputation, both online and in-store. I feel that Pepsi’s intention here with this subscription-like model, seems like a to me like a more of a short-term marketing play. I don’t really believe it has legs. I could be wrong, but I think during COVID stay at home orders, consumers could have easily taken advantage of this. I mean, think about it. You could send gift baskets. I hate to say it, but some sugary treats.

Julia Raymond:
Cheetos.

David Adelman:
Cheetos, junk food, whatever you want, nachos. But I think people are have moved on from this, and the products that they’re offering I don’t think fall in line with what people are wanting or craving coming out of this pandemic, and I’ll explain that in a minute. I think they’re just late to the party with this coming out a couple of days ago. So to me, what is their value proposition? So there seems to be nothing really unique here. Chips, sports drinks, cereals, very high sugar content, widely available everywhere. So what I look at is I always look at what can we do to attract a shopper. So I look at maybe offer more exclusive products to these subscription customers. Enable early access, perhaps, to new product launches. Make them a VIP. What’s the hook? Offer free samples with subscription, perhaps. And even maybe become an insider. Be a Doritos taste tester or a new product tester. This way it serves two purposes. You get the customer involved, and you get great data back, and it’s free data, and the customer is willing to do it.

David Adelman:
The other question is will consumers want multiple deliveries? Plus adding another online account to their list, right? I mean, to me, this is friction at its best. Right? Setting up another online account. We don’t need it, right? It’s like signing up for another credit card. I mean, when you walk into Walmart, I don’t need another MasterCard, right? So multiple deliveries, not convenient. It’s much easier, I think, to buy it from one place, whether it’s Walmart, Instacart. The second thing is, I think, is horse assortments.

David Adelman:
I feel like Pepsi is ramming assortments down customers’ throats without having them be able to personalize their selections. As well, free shipping in two business days. Really? I mean, that’s business days, so three to five, perhaps, days. Not good enough. With Walmart’s express delivery, two hours. I mean, and also one more account to set up, one more password to keep, one more bookmark et cetera, et cetera, et cetera. So I contrast this and I know you were talking to perhaps isn’t a subscription model but, for instance, subscription models like Dollar Shave Club et cetera, they offer an item that is unique. It’s a better quality item. It’s cheaper. It’s something they need, and it’s got convenience built into it.

Julia Raymond:
Absolutely.

David Adelman:
Right? So customers are more apt to subscribe to that, or even dog food where they can only get it from certain places.

Julia Raymond:
David, you said, it doesn’t really have legs, so your take is you know it’s not a great value proposition, doesn’t really have legs. You’re maybe on the cautious side saying it’s a no go. In a way. I know you didn’t say that exactly. Tony, are you more positive about this, or are you on the same page as David?

Tony D’Onofrio:
Well, I think this pandemic is one of those unusual times where it’s a great time to experiment, so I think it’s a good idea to experiment. I’m not sure if things exactly it’s gonna work, or partly because of what they have, but they’re not the first. I mean, Unilever announced in late April that they’re also doing the same. They had online sales already at 67%. During April, they grew to 36% for the quarter. So they announced that they grew 36% for the quarter, and they said they’re going to ramp up their investment to go directly to consumers. You’ve got to remember, PepsiCo already has about 2 billion in e-commerce, and that’s without the DTC focus. And the DT focus, to me this is a perfect time to just experiment, to see what’s possible. They do have shipping and distribution capabilities based on where they’re located, and they also have 23 brands that generate a billion or more, so they’re very popular in the market. So go test out and can you do exactly what David said, do exclusive, create a club or a tribe for specific products, exclusively online. So this is a time to experiment, as folks are at home and looking more for experiences or differentiated experience. Will it work? I’m not sure. It does carry risk, but it’s a perfect time to go try it.

David Adelman:
Yeah, I agree, Tony. I think the launch and the rollout, though, for a company the size of PepsiCo, I think it could have been rolled out with a little more detail, and a little more excitement. That’s just my comment, but will it work? Yeah. It just might. But coming out of this pandemic, as we do come out of it, I think people are probably going to look to return to healthier ways. I mean, we saw a huge increase in bike purchases during the COVID outbreak, we did at least in Canada, I’m not sure what it was like down in the US but we saw you know 100, 150% increases in bike sales. It’s no different, I don’t think, that after the Christmas holidays, New Year’s, everyone joins a gym, right? So, I think people, after being isolated and shut-in for two months, I don’t really know if they’re going to want to subscribe to this type of food. That’s just me, but I could be wrong, with America’s association for sweets and these types of goods, but it’s just my opinion, but that’s what I’m thinking here.

David Adelman:
The other thing is, why not have your world-famous commercial when you open the page and have your Doritos commercial with some humor injected and rather than just a stale template? So I think there are a lot of things they can do better, to make it work, to attract these customers and keep them. But time will tell, I guess.

Tony D’Onofrio:
But David, just to add to what you just said. To me, the key thing that they get out of this is actually getting the direct consumer sentiment and data in terms of what’s resonating and what’s not. So that actually could drive in terms of, so they’re doing basically almost consumer research using leveraging that brand. And it is a move that I see more of the direct folks doing. Like, for example, Nike started that process a long time ago. And they made a very successful transition. It’s already a $12 billion business. They’ve been adding a billion every year since 2012, and in China, it really saved the quarter. So for example in China, when they went into lockdown, they shifted all the focus of working and staying connected, so working out apps, those working out apps were linked to their commerce apps. The workout apps went up 80% because people had time to exercise, but guess what? Their e-commerce went up 30%.

David Adelman:
Wow.

Tony D’Onofrio:
And it actually helped save the quarter, and they had a decent quarter as a result. So it’s another way to reach a consumer and have presence, but again it’s got to be balanced to what we talked about earlier.

David Adelman:
Absolutely, absolutely. I guess we’ve seen a big turnaround for Peloton. That’s definitely been a big savior. I hate to say, the virus has been the savior for many companies. Not for brick and mortar, obviously, but definitely for others. Thank you, Tony.

Julia Raymond:
Great points from both of you. I think the big takeaway here is what Tony and David said, you both about this is a great time for experimentation, if anything. So to get out in front of more customers is great, and to really hear what they’re saying and get that feedback is going to be what makes the difference. I will say there were some people who commented, including Peter Fader at the Wharton School, and said this could be potentially a PR play, and others said, “Why would a consumer ever want to purchase from a CPG directly when we don’t think in that way? We don’t walk into the pantry.” This was Ricardo Balmar, our advisor. He said, “You don’t walk through the pantry and think, ‘Ah, what Pepsi products do I need? What coke products do I need?’ You think, ‘What do I need?'” Right? So I think that will be a challenge. They might have to get a little bit more collaborative with their traditional competitors.

David Adelman:
Definitely.

Julia Raymond:
Cool. Well, Tony, David, thank you so much for joining today. It was great to have you on the show, Tony, as always. And David, I hope to have you back in the future.

David Adelman:
Wow, thank you very much. It was a pleasure and, like I said, before an honor.

Tony D’Onofrio:
Thank you very much and I greatly enjoyed meeting you, David, and I being on this with you so I really enjoyed the discussion. Thank you.

David Adelman:
Absolutely. Everyone be well and be safe.