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Speaker 2: Of course, it is now only fifteen days into the
Speaker 2: New York City Mayor Zoramum Donnie's tenure, and he is.
Speaker 3: Making moves already. Alex, do you live in the city.
Speaker 4: I do.
Speaker 5: I'm a lifelong New Yorker.
Speaker 2: You're a lifelong New Yorker, so you feel it more
Speaker 2: than I do. I live in the suburbs along with
Speaker 2: John Tuckers.
Speaker 3: So did you get your free bus service?
Speaker 5: Yeah? Not yet, still waiting for.
Speaker 3: You, Still waiting a free child here take the bus.
Speaker 5: That often usually the train, so I don't think it'll
Speaker 5: direct they impact me.
Speaker 3: Okay, but still waiting, still waiting. Let's check in with
Speaker 3: Miles Miller.
Speaker 2: He is our senior reporter covering security the National Desk,
Speaker 2: law enforcement, governments and cities. And it's here where we
Speaker 2: want to talk to him, because Miles is joining us
Speaker 2: from downtown Manhattan. And Miles talk to us a little
Speaker 2: bit about what the new mayor, Zoramumdani is doing when
Speaker 2: it comes to work. He is cracking down on some
Speaker 2: companies and how they're treating workers.
Speaker 6: Yeah, you know, he's enlisted Lena Kahn as an advisor
Speaker 6: unpaid advisor to him, of course, known to the Bloomberg
Speaker 6: audience as the former FTC chair. In addition to that,
Speaker 6: Julie Sue who joined us on our fabulous Labor Fridays
Speaker 6: right the fridays where we get the jobs report. And
Speaker 6: then in addition to that Sam Levine, who was at
Speaker 6: the FTC running enforcement. That's his dream team. And what
Speaker 6: they're doing is going after companies that are involved in delivery,
Speaker 6: that are involved in the gig economy to make sure
Speaker 6: that workers are protected. The story across the Bloomberg terminal
Speaker 6: just about twenty minutes ago is one that really they're
Speaker 6: suing food delivery providers for what they say is withholding
Speaker 6: pay from workers. And it really gets to the heart
Speaker 6: of what the Mammdani administration is going to be about,
Speaker 6: using little known laws to go after big companies to
Speaker 6: fight for who they say is the little guy. The
Speaker 6: company that is being sued today is Motoclick, and the
Speaker 6: allegations are pretty simple that they violated delivery worker laws
Speaker 6: by failing to pay the required minimum rate and deducting
Speaker 6: canceled and refunded orders directly from their paychecks. And these
Speaker 6: are folks who most times are only making you know,
Speaker 6: money off of the tips that they're getting from these
Speaker 6: people who are ordering food.
Speaker 2: What you mentioned, the company that is in question here
Speaker 2: is Motoclick. This is not a company that I think
Speaker 2: a lot of people are necessarily familiar with. We don't
Speaker 2: if you order from DoorDash or a grubhub, you don't
Speaker 2: necessarily have a direct interaction with motoclick, do you.
Speaker 4: Right?
Speaker 6: You know, this is what of those companies that says
Speaker 6: it works with platforms like Uber Eats, door Dash and
Speaker 6: grub hub. You know, you may value order through these companies,
Speaker 6: and then you don't know that the folks who are
Speaker 6: coming to deliver it are actually working with this. You know,
Speaker 6: in some cases last mile company, they are basically integrated
Speaker 6: into the point of sale systems at some of these restaurants.
Speaker 6: And so yeah, you may order from Uber lyft, but
Speaker 6: you don't know that I was sorry, Uber or doordasher, grubhub,
Speaker 6: But you don't understand, you know, in that last mile
Speaker 6: where it's coming from. Well, the city is putting them
Speaker 6: unnotice that, you know that they're going to be sued
Speaker 6: for this. And then in addition to that, the city
Speaker 6: pass laws in the last year or so that protects
Speaker 6: these workers. In addition to this lawsuit, they're also putting
Speaker 6: the delivery companies on notice that there are specific laws
Speaker 6: that protect workers as it relates to deliveries, making sure
Speaker 6: that they get proper wages, minimum wage and all of that.
Speaker 6: And if that's not followed, that they could meet the
Speaker 6: same fate that's being met by motorclick right now miles.
Speaker 5: This of course follows the allegations that DoorDash and Uber
Speaker 5: deprived New York City delivery workers of more than five
Speaker 5: hundred and fifty million dollars in tips. That is a
Speaker 5: lot of money. Is there a sense if this lawsuit
Speaker 5: is successful that they might see those wages come back.
Speaker 7: Yeah.
Speaker 6: I think what the city wants to do, and specifically
Speaker 6: the the Department of Consumer and Worker Protection wants to do,
Speaker 6: is in filing any of these lawsuits or in making
Speaker 6: these claims public, is to put pressure on these companies
Speaker 6: to do the right thing before they get to the
Speaker 6: enforcement level. We've seen a lot of these companies that
Speaker 6: have been sued in the past, whether into the Blasio administration,
Speaker 6: whether being sued by the Controller's office, come to an
Speaker 6: agreement on a settlement, and that money does trickle down
Speaker 6: back to workers. But it doesn't stop with just the
Speaker 6: city Hall and doesn't stop with the Comptroller's office. You know,
Speaker 6: just today the Manhattan DA also you know, trying to
Speaker 6: make it clear that he wants protections for these workers
Speaker 6: because these are you know, these wage cases continue to
Speaker 6: pop up. It was just about a year and a
Speaker 6: half ago, two years ago that Grimaldi's Pizza was being
Speaker 6: accused of of wage theft and holding back pay pay
Speaker 6: for these low paid workers. And that's going to be
Speaker 6: a major focus of this administration.
Speaker 2: So can you reconcile this this first action, it's kind
Speaker 2: of like a shot across about by the mum donnie
Speaker 2: administration with the promises it had made to its supporters,
Speaker 2: to voters, to folks in the city, like alex Hemanova,
Speaker 2: who's a lifelong New Yorker, is this is this kind
Speaker 2: of the what they promised to prioritize.
Speaker 6: Yeah, I mean, you know, they have changed the role
Speaker 6: that Julie Sue is in. It used to be the
Speaker 6: mayor for a deputy mayor for economic development. But it's
Speaker 6: not just economic development, it's it's really with a focus
Speaker 6: on worker protection. It's really on a focus on equality
Speaker 6: and rights for people. And you know, this is a
Speaker 6: person who has spent a good amount of time in Washington,
Speaker 6: had spent time in California, who is going to be
Speaker 6: leading this effort. You know, when you look at Lena
Speaker 6: Khan being involved in decision making here at city Hall
Speaker 6: and going and doing what she knows best right and
Speaker 6: going through you know, very complex parts of the city
Speaker 6: Charter to find where you can really stick it to
Speaker 6: companies or where they could stick it to companies, you know,
Speaker 6: it really shows that this is a top priority for him.
Speaker 6: You know, and in addition to that, this role, the
Speaker 6: role in consumer protection was one of the first roles
Speaker 6: he filled after being being elected and right before take
Speaker 6: it or right after he took office, because he knew
Speaker 6: it was going to be something that people really relate to.
Speaker 5: Miles, when was the last time that we saw a
Speaker 5: New York City mayor go after big companies like this?
Speaker 5: Is this unusual.
Speaker 6: No, I mean in the Basio administration, we saw companies targeted,
Speaker 6: certainly UH. And then you know, in the Atoms administration,
Speaker 6: it was certainly a very pro business administration trying to
Speaker 6: work with business, but also sort of the bonus on
Speaker 6: businesses to.
Speaker 4: UH.
Speaker 6: And so it's it's a this is obviously a different tactic,
Speaker 6: and I think for the first time you're seeing UH
Speaker 6: an administration where they're not taking people really from big
Speaker 6: business and saying, Okay, here's how you can work on
Speaker 6: economic development. In the Vasio administration, Lesha Glenn was the
Speaker 6: Deputy Mayor for economic Development and had come from the
Speaker 6: business community. No, these are people who've worked in government
Speaker 6: for some time and are trying to figure out a
Speaker 6: way to make government work for people who you know,
Speaker 6: don't have much money, or to hit at the affordability crisis.
Speaker 6: It's a it's really a first of its kind approach
Speaker 6: to doing this kind of work.
Speaker 2: Stay with us more from Bloomberg Intelligence coming up after this.
Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live
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Speaker 3: Listen on demand.
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Speaker 2: Let's move over to the tech sector because there's some
Speaker 2: big news for the AI sector given that Taiwan Semiconductor
Speaker 2: Manufacturing and partner of Nvidia and other chip makers, came
Speaker 2: out with a monster forecast. Man Deep saying is our
Speaker 2: global tech research had apt Bloomberg Intelligence and he joins
Speaker 2: US now and TSMC is a bellweather for the AI story,
Speaker 2: and the revenue forecast it has given is growth of
Speaker 2: almost thirty percent, handily beating analystsessimates.
Speaker 4: Well, I mean, right now, we are in an environment
Speaker 4: where the supply constraints are at the component level, at
Speaker 4: the fab level, I mean TSMC doubt how advanced nodes
Speaker 4: are almost seventy seven percent of their revenue. So that
Speaker 4: just goes to show that if they have more wayfor
Speaker 4: capacity at the advanced node level, they'll probably be you know,
Speaker 4: growing even faster. And that's why they raise their own capex.
Speaker 4: So think of the trickle down effect. Hyperscalers are raising
Speaker 4: their capex. TSMC, being the fab layer, is raising their capex.
Speaker 4: And this is the entire supply chain that everyone realizes
Speaker 4: they need more data center capacity when it comes to
Speaker 4: running AI and all the way through the supply chain.
Speaker 4: Right now, it's trickling down now. The question is obviously
Speaker 4: of overbuild and if and when, you know, we'll hit
Speaker 4: an equilibrium. And from what we have seen in terms
Speaker 4: of partnerships and deal making like open Ai Cerebris, I
Speaker 4: mean right now, they're trying to procure as much chip
Speaker 4: capacity as they can because I mean Opening has said
Speaker 4: their revenue growth is a function of the power and
Speaker 4: chip available computer availability they have, so right last year
Speaker 4: they grew their power and computer availability three x, their
Speaker 4: revenue grew three x. So that's the kind of part
Speaker 4: of the cycle we are in. And the question is
Speaker 4: you know how long it's going to sustain and so
Speaker 4: so far as signs are, this is going to carry
Speaker 4: through at least through twenty twenty six.
Speaker 5: Mandy, what does the strong outlook from TSMC mean for
Speaker 5: Intel and its foundry business. Intel is up some thirty
Speaker 5: percent this year. Is it a positive sign for them
Speaker 5: that demand is there or signed that TSMC is a
Speaker 5: dominant name here.
Speaker 4: Actually, there was some demand spill over to an Intel
Speaker 4: and Samsung, especially on the non data center side. So
Speaker 4: I mentioned TSMC is heavily skewed towards advanced notes and
Speaker 4: more towards data centers. Well, there is demand for you know,
Speaker 4: chip capacity on the PC side, smartphone side, and that's
Speaker 4: where there is some spillover that's carrying over to an
Speaker 4: Intel on the PC side, to Samsung as well. And
Speaker 4: so right now, everyone seems to be benefiting from overall
Speaker 4: chip demand across the board.
Speaker 2: Right and something else that's in demand is memory. And
Speaker 2: we've seen Micron, we've seen sand Disk, we've seen Western
Speaker 2: Digital really benefit from that demand for memory chips. But
Speaker 2: it also there's a downside to that because you have
Speaker 2: hardware companies as a result under pressure because they need
Speaker 2: to pay for that memory and they need to go
Speaker 2: out and source it and it's not always available unless you.
Speaker 4: Are Jensen and Nvidia, who has really managed the supply chain. Well,
Speaker 4: I mean, I was amazed how Nvidia mentioned that they
Speaker 4: still feel comfortable holding on to that mid seventy percent
Speaker 4: ross margins. They're one of the biggest users of HBM memory.
Speaker 4: That is a supply constrained right now, and the prices
Speaker 4: are going through the roof, but they have logged in
Speaker 4: those multi year agreements where these suppliers can really raise prices,
Speaker 4: and so from that perspective, the bigger you are, if
Speaker 4: you're an Apple, I'm sure they can source their memory.
Speaker 4: They may have to pay higher prices and it will
Speaker 4: impact their gross margins, but not to the same extent
Speaker 4: it's going to hit a smaller hardware vender. And that's
Speaker 4: what I think we'll find out this earning season.
Speaker 5: Man Deep also looking at the story today about Oracle
Speaker 5: struggling to hire workout workers for the buildout of its
Speaker 5: headquarters in Nashville. What has this AI build out meant
Speaker 5: for hiring the talent war? Is there anyone who's winning it?
Speaker 4: Yeah, I mean we read the story on the terminal
Speaker 4: about electricians, you know, having almost a doubling off their pay,
Speaker 4: and so anyone who is linked to that data center
Speaker 4: construction right now is in high demand. And so it
Speaker 4: doesn't surprise me that you are sort of in this
Speaker 4: environment where laborers in short supply, you know, components are
Speaker 4: in short supply, and putting all these things together is
Speaker 4: taking longer time because everyone wants them to be ready overnight. Well,
Speaker 4: that's where you're running into these bottom lines.
Speaker 2: Well too, Alex's point, Oracle is trying to attract workers
Speaker 2: in Nashville where it's developing this riverfront headquarters. Is that
Speaker 2: a place where the tech talent will flock to.
Speaker 4: I mean, we've seen what has happened in Texas right
Speaker 4: in terms of companies going to Texas just because it's
Speaker 4: easier to set up data centers over there.
Speaker 3: So oh and no income tax.
Speaker 4: No income tax, that's right. So all these pockets I
Speaker 4: think are having their moment in terms of one attracting
Speaker 4: these big companies. And if you have power, and I
Speaker 4: haven't studied Nashville in that detail, but if you have power,
Speaker 4: then it suddenly becomes a very attractive destination.
Speaker 2: Stay with us. More from Bloomberg Intelligence coming up after this.
Speaker 1: You're listening to the Bloomberg and Helogen's podcast. Catch us
Speaker 1: Live weekdays at ten am. He's done on Apple, Cocklay
Speaker 1: and Android Auto with the Bloomberg Business App. Listen on
Speaker 1: demand wherever you get your podcasts, or watch us live
Speaker 1: on YouTube.
Speaker 2: One of the tailwinds for the market heading into this
Speaker 2: year was the expectation of a spate of deal making,
Speaker 2: and to that point, we did learn today that Boston
Speaker 2: Scientific is looking to buy p Number for about fourteen
Speaker 2: and a half billion dollars. Obviously, with the big banks
Speaker 2: reporting earnings, bank executives are also making comments. David Solomon,
Speaker 2: the CEO of Goldman Sachs, says that we are not
Speaker 2: yet in the middle of a full on M and
Speaker 2: A cycle, and he sees a very very good year
Speaker 2: for M and A overall. Let's bring in Jennifer Ree,
Speaker 2: she is our senior litigation analyst for Bloomberg Intelligence, to
Speaker 2: talk to us about the antitrust landscape. Is there an
Speaker 2: active antitrust monitoring happening right now because this administration has
Speaker 2: signaled that it wants to see deals being made.
Speaker 4: Yeah.
Speaker 7: Absolutely, and it certainly is a big change from the
Speaker 7: Biden administration, where we kind of had the opposite sentiment.
Speaker 7: I mean, we are really seeing very little activity from
Speaker 7: the Department of Justice, a little bit more from the
Speaker 7: Federal Trade Commission, but even in their case, it's been
Speaker 7: pretty restrained. And it seems that both authorities are really
Speaker 7: willing to work with the companies if they think that
Speaker 7: there's a problem with the deal, to work out some
Speaker 7: kind of settlement. And that's what didn't exist during the
Speaker 7: Biden administration and why deal making was so stymied At
Speaker 7: that time, and I think most companies see if we
Speaker 7: can come up if we have a problem, A lot
Speaker 7: of deals don't. But if we do and we can
Speaker 7: come up with a solution, we can probably get it cleared.
Speaker 5: Jen you mentioned muted activity from the regulators, but are
Speaker 5: there any industries that they're targeting right now more than others.
Speaker 3: Well, it looks like it.
Speaker 7: It's interesting that we see Boston Scientific has a deal
Speaker 7: because of the few challenges that have been brought to
Speaker 7: deals by the FTC, they've been in the healthcare space,
Speaker 7: one in the housing area construction adhesives, which is a
Speaker 7: recent case they filed, but two in the healthcare space.
Speaker 7: And it doesn't surprise me really because these are very
Speaker 7: sensitive sector's, consumer facing sectors, and that does align with
Speaker 7: essentially a populist agenda, which they talked about in the
Speaker 7: beginning when they took on their positions, and so I
Speaker 7: think we'll probably see if we see continued activity in
Speaker 7: those areas or other very sensitive consumer areas.
Speaker 2: The other thing that we need to keep in mind
Speaker 2: is most of these companies that we're talking about are
Speaker 2: big multinationals. They operate all around the world, so you
Speaker 2: have US regulators and they may be stepping back and
Speaker 2: letting things happen, but regulators in Europe may not be.
Speaker 2: And I bring this up because we heard reports yesterday
Speaker 2: that Paramount and Netflix have been meeting with European Commission
Speaker 2: officials as part of their bid for Warner Brothers. What
Speaker 2: can pare contrast, for instance, the European Commission regulators with
Speaker 2: those in the US.
Speaker 7: You know, there's been a little bit of a pullback.
Speaker 7: I think when I think of really big regulators in antitrust,
Speaker 7: I think of US, China, UK and Europe. These are
Speaker 7: the jurisdictions which would be willing to actually block.
Speaker 3: A global deal.
Speaker 7: And we've seen a little bit of pullback across the board,
Speaker 7: and not so much with China. It's really just a
Speaker 7: black box there. I can't speak to what they're doing.
Speaker 7: But in the UK and in Europe there has also
Speaker 7: been a bit of a pullback, especially in the UK
Speaker 7: after they kind of got really chided from Microsoft Activision
Speaker 7: and trying to step in there. The thing is, for
Speaker 7: companies doing a deal that might have scrutiny in Europe,
Speaker 7: it's a bit scarier than in the US because they
Speaker 7: have the ability under their law to actually block a deal,
Speaker 7: whereas the US regulators don't. They have to go to
Speaker 7: court and they have to win in court in order
Speaker 7: to actually block a deal. It is far more difficult
Speaker 7: for them. It is easier in the EU. And Netflix,
Speaker 7: by the way, is gigantic. I didn't know this until
Speaker 7: I started looking at the deal, but it's really really.
Speaker 3: Big outside the US.
Speaker 7: An HBO is getting bigger in many of the countries
Speaker 7: in Europe. It's recently expanded in Italy, in a seven
Speaker 7: or eight other countries.
Speaker 3: So they will that deal. I think no matter which.
Speaker 7: Company ends up buying, Warner Brothers is going to get
Speaker 7: a lot of scrutiny, and certainly scrutiny in EU, and
Speaker 7: that is going to be one area where they're going
Speaker 7: to have to work, I think, to get clearance.
Speaker 5: Jen The past couple of years saw a lot of
Speaker 5: high profile antitrust cases, specifically within big tech. We had
Speaker 5: rulings against Google and Meta. What kind of precedent have
Speaker 5: they set for big tech regulation in twenty twenty six.
Speaker 7: Well, what they're showing is that it's going to be very,
Speaker 7: very difficult for US and anti trust agencies to actually
Speaker 7: tame what they view as monopolistic conduct. I mean, they
Speaker 7: did win technically against Google with respect to monopolizing search,
Speaker 7: but the remedy was fairly weak. They didn't get what
Speaker 7: they were looking for. Look at what Google's doing now
Speaker 7: with AI with Apple, which is exactly what the plaintiffs
Speaker 7: were trying to avoid, you know, dominance in AI after
Speaker 7: dominance in search.
Speaker 3: So the difficulty they have is even.
Speaker 7: Where they win on liability, they have a really tough
Speaker 7: time with remedies. Most US federal judges are going to
Speaker 7: be very cautious when it comes to meddling in business
Speaker 7: and the way a sector may develop, especially in technology,
Speaker 7: because it's so changing and nobody knows where it's going.
Speaker 7: So when you have these cautious judges, you're just not
Speaker 7: going to get the drastic remedies that are probably the
Speaker 7: remedies that are needed to really do something about the
Speaker 7: market positions of some of these companies. So we're seeing
Speaker 7: that it's going to be difficult, but we haven't seen
Speaker 7: as much of a let up on the cases that
Speaker 7: were inherited from the Biden administration. This DOJ and FTC
Speaker 7: are continuing to go after these cases in court. They're
Speaker 7: continuing to pursue what you might think of as a
Speaker 7: drastic remedy a structural remedy. The next test will be
Speaker 7: Live Nation, which is going to trial March second against
Speaker 7: the DOJ and some states.
Speaker 2: Okay, so we'll watch for them. Then it's a bit
Speaker 2: of leftover from the previous administration. We talk about regulators,
Speaker 2: and that's usually how the antitrust enforcement shows up, or
Speaker 2: any kind of pushback from government authorities.
Speaker 3: But there's also the role of President.
Speaker 2: Trump as well, and he's made clear that because he
Speaker 2: has some firm opinions about certain companies and certain sectors,
Speaker 2: that he's going to be what he says personally in
Speaker 2: some of them.
Speaker 3: That's right.
Speaker 2: Is there a playbook for this? I mean, how do
Speaker 2: regulators work in concert with a mercurial president?
Speaker 3: You know, there really.
Speaker 7: Isn't a playbook. This is somewhat unprecedented. Now there are
Speaker 7: many that would argue that this kind of started during
Speaker 7: the Biden administration, but we have authorities at the Federal
Speaker 7: Trade Commission and Department of Justice that are very much
Speaker 7: trying to align what they're doing in the anti trust
Speaker 7: space with the policy priorities of this administration, I think
Speaker 7: much more so than in the past. And they just
Speaker 7: don't look like they'd be willing to buck the White
Speaker 7: House if the White House has some feel or some something,
Speaker 7: you know, an issue with the deal. Right, So we're
Speaker 7: seeing a lot of alignment, and we're also seeing a
Speaker 7: lot of reemptive alignment. It's preemptive alignment. And we're seeing
Speaker 7: a lot of lobbying which we hadn't seen before too
Speaker 7: in the overruling of the Anti Trust Division by senior
Speaker 7: officials who are talking to lobbyists. And so there is
Speaker 7: a lot of concern right now in the anti trust
Speaker 7: community about the rule of lobbying really prevailing over the
Speaker 7: rule of law when it comes to merger enforcement.
Speaker 2: And this is stuff that we see after the fact,
Speaker 2: after an announcement has made, as opposed to during it.
Speaker 4: That's right.
Speaker 7: We see reports and of course I'm not privy to
Speaker 7: what's going on behind closed doors, but there has been
Speaker 7: a lot of news reporting and a former senior FTC
Speaker 7: official who recently left, who has spoken out about some
Speaker 7: of the activities related to the.
Speaker 3: Hewlett Packard Juniper deal.
Speaker 7: Now, most recently, we have a deal between two huge
Speaker 7: real estate brokerages, Compass and Anywhere, that was cleared very
Speaker 7: quickly without even a deep investigation by the Federal Trade
Speaker 7: Commission upside the Department of Justice. That surprised a lot
Speaker 7: of people. I think it even surprised the companies that
Speaker 7: have projected to close much later this year. And apparently
Speaker 7: that was also because lobbyist had stepped in.
Speaker 2: Stay with us more from Bloomberg Intelligence coming up after this.
Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live
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Speaker 2: We need to talk about AI, not so far, not
Speaker 2: so much so far as to how it's impacting the
Speaker 2: stock market, because we've seen that and we see that today,
Speaker 2: but how companies are actually integrating it and how consumers
Speaker 2: are experiencing it. Lindsay Dutch is our Bloomberg Intelligence Consumer
Speaker 2: Hardlines senior analysts, and she's been researching this idea of
Speaker 2: retailers embracing AI. But I guess there's a recognition, Lindsay
Speaker 2: that for impulse purchases, which are so critical for the industry,
Speaker 2: you still need a human touch, so it can't be
Speaker 2: done remotely. It can't be done virtually. It's usually done
Speaker 2: in person, and it's kind of unpredictable.
Speaker 8: Yes, Hi Scarlett, thanks so much for having me. I
Speaker 8: just returned from the NRF conference, forty thousand people. There
Speaker 8: lots of retailer leaders there. You know, AI was all
Speaker 8: the buzz. It was pretty much the topic of every session.
Speaker 8: And as I think about it, there's a lot of
Speaker 8: really cool technology going into this, and retailers are mostly
Speaker 8: using AI to improve employee productivity, move employees up the
Speaker 8: value chain, improve afflirational efficiency. And on the customer side,
Speaker 8: we're mostly seeing it in terms of like a customer
Speaker 8: service chatbot, maybe some personalization when you look at your
Speaker 8: email ads. But there's you know, new levels that are
Speaker 8: coming that will really you know, amp up. You know,
Speaker 8: AI's place in that retail shopping journey. But as you mentioned,
Speaker 8: I think, you know that spur of the moment, that's spontaneity,
Speaker 8: when you find something that you love and you have
Speaker 8: to buy it.
Speaker 3: You know, that's a big.
Speaker 8: Piece of the shopping and retail world, and that really
Speaker 8: still you need some human element in that process.
Speaker 5: Lindsay, we talk often about the death of brick and
Speaker 5: mortar stores. People aren't going into physical stores as much
Speaker 5: as they are shopping online. Do you think that AI
Speaker 5: can reignite the excitement for going into a store and
Speaker 5: experiencing the technology.
Speaker 8: So I actually think we're already seeing a return to
Speaker 8: brick and mortar, you know, coming out of the pandemic.
Speaker 8: You know, people realize how important it is to have
Speaker 8: an in person experience. More recently, you know, I've heard comments,
Speaker 8: you know, I follow best Buy. You know they have
Speaker 8: talked about that gen Z and younger shoppers are showing
Speaker 8: a much stronger preference to shop in the store, to
Speaker 8: talk to their geek squad, you know, you know, to
Speaker 8: get advice, to browse things in person. We also see
Speaker 8: that from an alta beauty as well. So I do
Speaker 8: think e commerce penetation will continue to rise.
Speaker 3: As a whole.
Speaker 8: I think these new technologies will continue to support more
Speaker 8: shopping online, but I do think there is a personal
Speaker 8: element that will remain. And you know, we see strong
Speaker 8: brick and mortar demand on the retail real estate side,
Speaker 8: and that is expected to continue for some time.
Speaker 2: Having said all that, how does AI enhance the ability
Speaker 2: for stores to be able to reach out to consumers
Speaker 2: so that they're there and have the right recommendations when
Speaker 2: consumers are in the mood to make impulse purchases.
Speaker 8: Yeah, so right now, I think the best consumer facing
Speaker 8: use of AI is really increasing discovery exactly what you're saying,
Speaker 8: So being able to serve up product online when a
Speaker 8: customer is looking for it. And you know, this new
Speaker 8: tool that Google co developed with Walmart and others, Universal
Speaker 8: Commerce Protocol, is going to do just that. So you
Speaker 8: can pop into this tool which is powered by Gemini,
Speaker 8: and you can say I'm looking for a navy boot
Speaker 8: blazer that I don't want to have dry cleaned, and
Speaker 8: it will serve up you know, the product from the brand.
Speaker 8: You can transact right there, so it's all seamless. Something
Speaker 8: like that, you know, is a great tool to bring
Speaker 8: product directly to the person and close the gap between
Speaker 8: looking for something that you want, finding it, and transacting it.
Speaker 8: And we see a lot of technology, you know, coming
Speaker 8: to the fore that that's going to allow that to happen.
Speaker 5: Lindsay, AI and new technology can be really complicated for
Speaker 5: consumers to navigate. What are companies doing to help guide
Speaker 5: shoppers through maximizing the experience they get with AI.
Speaker 3: Yeah, that's a tough one.
Speaker 8: I mean I think that you know, people in generally
Speaker 8: are using more tools like Gemini, you know, for all
Speaker 8: sorts of things chat, GPT that will you increase that
Speaker 8: comfort level. And we have seen over time, you know,
Speaker 8: I also cover home furnishings. You know, in the beginning,
Speaker 8: when people were starting to transact online, like no one
Speaker 8: wanted to buy a couch or a big product like
Speaker 8: that that that you would typically want to sit on
Speaker 8: and feel.
Speaker 3: And you know that over time, you.
Speaker 8: Know, retailers have figured out how to showcase their product
Speaker 8: in a digital way that makes comfortable customers more comfortable
Speaker 8: transacting on a big ticket item like that that you
Speaker 8: would normally really want to see in person. And I
Speaker 8: think the same thing would be true for these other
Speaker 8: new technologies. It will take time, you know, adoption will rise,
Speaker 8: it will rise slowly, and that's why I think it's
Speaker 8: a real balance. You have to be, you know, in
Speaker 8: that tech world, but you also have to be in person.
Speaker 2: Well said what surprised you the most, lindsay, very quickly
Speaker 2: at NRF twenty twenty six when you went there.
Speaker 3: What kind of blew you away?
Speaker 8: You know, I think the retail environment right now has
Speaker 8: in twenty twenty five, is an extremely challenging environment, you know,
Speaker 8: And I think what's most impressive is, you know, the
Speaker 8: people in the industry are just so excited to take
Speaker 8: on new challenges in twenty twenty six, you know, even
Speaker 8: though we're still battling costs from tariffs, trying to implement
Speaker 8: all this technology, a difficult consumer backdrop. So there's just
Speaker 8: a lot of excitement in the industry and everyone is
Speaker 8: just so excited to rise to that next new challenge.
Speaker 8: And I love that energy.
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