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The Doing Business in Bentonville Podcast
To create an ecosystem that connects leaders of all kinds – industry, community, student, educational, civic, investment and entrepreneurial – to help overcome Omnichannel Retail barriers through exclusive, insight-rich content.
The Doing Business in Bentonville Podcast
Ep. 126 - Retail’s Crossroads: AI, Tariffs, And Walmart’s Next Move
Change moves fast in Bentonville, and this conversation puts you right at the center of it. We connect the dots from Walmart’s early tech shifts—scanning, EDI, and Retail Link—to the next turning point: practical AI that speeds real work, from writing and workflows to design iteration that cuts weeks off development. Along the way, we unpack how tariffs and sourcing strategies are reshaping price points, merchandising, and the mix on the shelf.
We sit down with veteran operator and consultant John Reeves and 5G Consulting CEO Brett Dye to explore what selling to Walmart and Sam’s Club really requires today. The insights cut through hype and get tactical: why store newness still sparks discovery, how e‑commerce should amplify—not replace—core merchandising, and where AI already delivers value in supplier teams. Brett shares the story behind 5G—built on deep Walmart DNA and focused on replenishment, e‑commerce, and sales execution—plus grounded advice for entrepreneurs preparing to pitch: know your core customer, nail the financials, and be retail‑ready down to the UPC.
Expect a frank look at tariffs’ ripple effects, from upper‑tier price lifts to looming pressure on opening price points. We examine diversification beyond China, the realities of nearshoring, and what it would take for U.S. manufacturing to make a meaningful comeback. Throughout, one theme holds: listening, speed, and adaptability win. With Walmart investing in AI training for associates, supplier fluency will become table stakes—just as Retail Link mastery did a generation ago.
If you care about retail strategy, Walmart supplier success, AI in merchandising and design, and smart sourcing under uncertainty, this one’s a must‑listen. Subscribe, share with your team, and drop a review with the biggest change you’re making after listening.
Well, hello everyone, and welcome to doing business in Bittenville. My name is Andy Wilson. I'm the executive director and host today. And it is just so wonderful to have you back. Before we get into our wonderful podcast today, I want to say a couple of things to our listeners and our viewers. Thank you. Thank you so much for taking us so far down the road already. Because of you, we're in over 100 countries and 2,000 views today. And so thank you. Continue to do that. Continue to share the podcast on all of our social media networks. We appreciate it. And if you want to reach out to me, you can do that on LinkedIn and I will answer you back. Okay, let's get straight into our podcast today. It is a really a privilege to me to have these two gentlemen in our studio today. And John Reeves, I want to first welcome you. John is going to be our co-host today. He's really responsible for making all this happen. So, John, thank you for that. And welcome back. Thank you. Thanks. Great to be here. I love being there. Yeah, and you know, as you may remember, may not remember, John has a history of Walmart over 22 years as a visual merchandise manager. He did a lot of roles in Walmart. He spent time in Canada, time in Mexico. What else did you did you do at Walmart, John? I mean, you just had such a great career, and you're continuing to do things uh as a consultant, too.
SPEAKER_02:Actually, uh actually, I started in the stores um many, many years ago in Stillwater, Oklahoma. Um and uh soon after I started, I became a department manager and learned the thrill of buying and selling merchandise that kind of catapulted me into the other roles that I've taken over the years with Walmart and the buying positions, merchandising. Uh, as you mentioned, we did a uh an expat assignment in Canada, I did an expat assignment in Mexico. And for the last several years, I've uh I've been on the other side of the business working with suppliers that specifically have an interest in selling to Walmart and Sam's Club.
SPEAKER_00:Good. Well, John, it's always great to see you. You should you're a great friend, and I always want you in. Hey, I've been trying to get this guy in our studio more often, so maybe you guys put some pressure on and get him back in here with me. And but he's but he's a busy man. Okay, our our guest today, Brett Dye, welcome. Good. Thanks for having me. You know, wow.
SPEAKER_01:He might not tell you, but uh my first day at Walmart back in July '95, uh, right across from me. And he had uh he was instrumental in my career at Walmart as well.
SPEAKER_00:Are you serious? I didn't know that. Well, he was instrumental in my career because you know he taught me so much about all this stuff and merchandising, menswear, and all this stuff, and and made me much better in the stores when I visited the stores. Andy, that was 30 years ago.
SPEAKER_02:I was a buyer. I had just come back um from the Canada assignment and was placed by uh a guy that we all know and love very well, Bill Fields. He said, You need to go to this industry. It's a great industry. I know a lot of the people there, and you'll thrive in that industry. And he was right. And soon after I got there, you know, we get this young uh guy from Shopco. Uh that's it. Came in, and I'm thinking, you know, wow, this guy's not gonna make it.
unknown:Yeah.
SPEAKER_02:I thought, you know, and he jumped in. I mean, I've never seen anybody jump in with both feet and and learned the system, you know, probably despite some of the advice I gave him, thrived in the system and uh has a and has had a great career from Walmart and then beyond.
SPEAKER_00:That's wonderful. Well, um, Brett, not only Shopco, you had a background in Kmart too, right? Before Walmart.
SPEAKER_01:When I started, uh I can remember my first assistant manager again, just like John, I started off in the stores. Yeah. And my uh first assistant manager, Oscar Anahosa, uh, was instrumental. He said, Brett, whatever you do, don't go into retail.
SPEAKER_00:But I'm a terrible listener.
SPEAKER_01:I'm a terrible listener.
SPEAKER_00:It's been so good for all of us, though. You know, we all three started in the stores, right? You know, and uh from and it's no better place in retail when you learn to store business and the customers and all that. I mean, that's such a great foundation for anyone. It sure has worked well with us. Okay, Brett, let's talk about your great company that you have today, 5G Consulting. Tell us about your company. Because I what I I've you know, I've worked with you before, your great company. It's a phenomenal company. And uh so give us some history there, and but more importantly, tell us what you're doing today. Well, I appreciate that. I appreciate the opportunity.
SPEAKER_01:Um so what's most important about the name 5G is it's named for my daughters. Uh I have five daughters, five girls, Keely, Katie, Bridges, OE Ellie. I have to do it in that order. Uh, in fact, when I mention my daughters, I talk about daughter number one, daughter number two. Most people know by that.
SPEAKER_02:I remember all I remember the births of all of me who had well, guess what? I had and I said, Oh, you just find every white now.
SPEAKER_01:Listen, no, it's a good fine upstanding women from 35 to 25 now. Um so 5G was created back in 2005. I was leaving Walmart. Uh, I got a great uh consultant uh from Walmart. He says, Don't go to work for one supplier, go to work for all the suppliers. And it really was uh um great advice. Um I a Chinese company had uh brought me aside, said, Hey, we want you to help on some things. In the meantime, I went to all my existing old suppliers and said, Hey, for a small amount of fee, you know, for a small fee, I'll handle this and this and this. And I had so many people sign up. Um a year later, uh the Chinese company had gone away, but the consulting side had done so well, uh, we just continued to go down that path. Now here it is 20 years later. We have a group of about 25 people, great people, fantastic people. Um you know, on a personal note, right about then is right when I went through a divorce, and it was, you know, divorce is terrible. But in that, I really learned a lot. I was at home with the kids, I couldn't travel as much. Uh I tell this story quite a bit. I made what I thought was a very career-limiting decision. I'm gonna stick with Walmart and Sam's. I'm not gonna go call on JCPenney and I can mention all the retailers are not around anymore, uh, but Target, Bed Bath and Beyond, JCPenney, and said, I'm gonna focus on Walmart and Sam's. Uh, and that was the best thing for my personal life. It's been the best thing for for my professional life, too. Um, our people in 5G are ex-CPG, ex-Walmart vice president, ex-Walmart buyers. Um we try to have a good combination of what all uh what Walmart would need and what our clients would need. Replenishment, e-commerce, sales. In fact, you know, that's all we do. We listen. Walmart says, hey, this is what we need, we listen, we go do it. Our client says, hey, this is what we need, we listen, we go do it.
SPEAKER_00:That's wonderful. And um I love the part about your li about about listening to the customer. You know, that was in joint that was in uh joined in us uh for day one. And when you when you start in the stores, you learn that, and then when you move up in the organization, most of the time people are very successful because they really understand what you just said. So m more about your company. Okay, as we um, you know, we're you're based here in Bittonville, Arkansas. Uh we are. You know. Um tell me, what type of unique um insights do you get from being based here? Um great question, Andy.
SPEAKER_01:You know, um several people go to a yoga class, and guess guess who's in their yoga class? Somebody works at Walmart. You know, I go into River Grill at five o'clock. Guess who I see at River Grill at five o'clock? Not many people from Walmart. But uh 95. I'm not throwing them under the bus. Uh, but Andy, we live in such a small community, and like John and I have been around for so long, you've been around for so long, you see so many people you know, you spend time with them, you uh engage, you hear about what's going on at Walmart, you hear what merchandising is looking for. Um man, it it's a fantastic area to learn. I don't know how anybody could call in Walmart from Dallas or from someplace else. Wonderful.
SPEAKER_00:You know, um one of the things we're we're gonna talk about in a bit is AI, and we're gonna get into a technology discussion. So I can't wait for us to get into that and talk about the impact that technology AI is having on cells. And uh, John, you're gonna lead that in a in a minute. So we'll get into that. But you know, Brett, um, one last question before we get into a much open discussion uh with all of us. Um people, entrepreneurs, there's a lot of entrepreneurs in Updess, Arkansas. I mean, lots now. And people are, you know, looking to scale their products. When people, entrepreneurs come to you wanting to scale their products, what advice do you give them? What do you what do you share where someone shows up and says, I'm an entrepreneur, I've got these ideas, how do you navigate that? Because we have a lot of entrepreneurs that watch that watch us. That's one reason I wanted to ask that question. Great question.
SPEAKER_01:Um, you know, do you like the item first? And then after, if it's a yes, you know, you want to continue down the questioning. And all those questions have been ingrained in us at Walmart. You know, how big is the company? Where are you manufacture? What's the core competency? How long does it take to get here? You know, who's your core customer? Who are you looking for? All those things. Um, when dealing with Walmart, unfortunately or fortunately for Walmart, guy comes in and says, uh, you say, Hey, you need to make sure there's a UPC on the product. He goes, Do you know how to do that? You know, pulls up his pen. You're not ready for Walmart. You know, we're talking about technology. Do you remember uh John back in 95 when I got to Walmart, there's size on the wall. No UPC, no PO.
SPEAKER_00:Yeah, yeah. I remember those signs actually.
SPEAKER_01:But you know, um in talking about an item, you the the ultimate customer has to love it. Now then you go backwards. Walmart has to love the financials of the item, and then the client has to be able to live on those financials and the price point. If all those things, and it can it's can be a fragile process, if all those things line up, it could be a really good item.
SPEAKER_00:Good, great. Well, we're gonna get into so much depth depth in that. I um, John, as we mentioned, uh you know, over 22 years at Walmart, started in the stores, and and we talked about your merchandising career and um your um your stint in Mexico and Canada. So, John, as you think about retail today, uh so much has changed, so much is it's moving extremely quickly. What I know we're gonna talk about some stuff on technology, you have some ideas. I would love to jump in to listen to hear some of your thoughts around this technology piece, some of the AI piece, and there's some QA you want to talk through there with us. Let's get into that. Then I want to circle back with you though, because you always have great Walmart stories. Yeah, thank you. I want I want you to share uh one or two of those with us today at some point, uh, because you're gonna love John. He's uh John's almost a historian at Walmart. I mean, he's he's he remembers everything. And uh you need to check him out on uh his LinkedIn and Facebook because you do some great jobs in posting stories. Well, thank you. All right. So, John, let's get into this whole thing.
SPEAKER_02:Appreciate it. Yeah, well, one of the things um you know, when you live in Bentonville like like we all do, um whenever Walmart says something, um, you have to take notice. And I'm talking recently about uh Doug McMillan, the CEO of currently CEO of Walmart, made a statement about AI, and and I'll read some of what he said. He said, maybe there's a job in the world that AI won't change, but I haven't thought of it. He further stated, our goal is to create the opportunity for everybody to make it to the other side. Some jobs and tasks at Walmart will be eliminated, but others will be added. So I look I thought about that, and and um, you know, first of all, I'm glad to hear that uh that they're not gonna eliminate jobs. In fact, uh they came out later and said the head counts were gonna remain flat, which is good news considering that the uh new campus that they built there, so they've got to have people there um to fill those buildings. But um the other thing that made me think is is whenever Walmart makes a move with technology, the whole industry kind of follows that. And I and I thought about some examples of that that we all remember. Um and my first thing that came to mind was you know times when Walmart was resistant to change. And um the one that I thought about uh immediately was the time when I was an assistant manager and uh we were at the year-in meeting or the year-beginning meeting. I think at that time it was the year beginning meeting, Andy. I don't remember, they get them mixed up. But uh we were in a breakout session and we were talking about the tells on. Do you remember the tells on? Uh this was a great piece of technology in the 80s, uh, where a department manager would take a red book and go to the counter and count and and and do everything manually. Well, the tells on, you would go scan the label and everything would hit, go back to the database, and you would just key in uh, you know, what your quantities were, and we had a real problem with getting the department managers to accept that. And the assistant managers, of course, at this meeting were in charge of that. And so Matt Gammon, uh, being uh a senior operator and uh you know, somebody you really wanted to be on his good side, because Matt could, you know, he had a certain kind of demand about him, a little bit of force behind him, throws the tells on across the room in front of all the assistant managers and says, Why, why don't we just throw it away? If we're not gonna do, if we're not gonna to do this and and use this to better our company, we ought to just throw it away and say we wasted money. Well, from that day forward, the tels on became a very uh important piece and we moved forward. And from the tells on, uh, we went to scanning, you know, scanning in the registers again. You know, that was a there was some resistance to that. Uh and then when I came into the buying office, um, my first buying position in the late 80s, um, we started with EDI, and and and that was the big uh that was the big tag. And Walmart was in charge or wanted to lead that process. And EDI basically was sending information electronically to your suppliers. So my first buying job, every Monday I would come in and there would be a a stack of dot matrix printed orders. And my assistant at the time would have to slice all that up into individual uh suppliers and FedEx to the supplier, their orders. The supplier would take that order when they got it the next day through FedEx and they would key it into their system. And you know, four or five days later, they can start processing that order. Well, EDI took that uh whole process and made it electronic. So now instead of that landing on my desk on Monday morning, it went right to the supplier, and they had two days, I believe, at the time to turn that order around. That changed everything from uh the way Walmart replenished product and everything else. And I've got a really interesting example. I worked for I worked with a belt company. Uh and back in the early uh 90s, um, late 80s, there's a belt company called Tandy Brands. And as the buyer for belts, uh I the sales weren't good. Uh, I'd go to the stores and and I would see size 30 and size 40, size 30, 42, and a full belt rack. What was happening was the guts of that program wasn't there. And so we sat down with, I don't know if you remember Mark Stalcut, but he was a guy that kind of led this innovation for Walmart. And we sat down and we said, how can we replenish this item better to make uh to the to make where we've got um the right belt at the right time for the customer? And so we started an EDI um replenishment program where uh they would uh we first the stores did a count of what they had, and then we would replenish. It was the beginning of POS replenishment. Um and this this company would would get the order packet and ship it directly to the store. So we took that program uh that was doing very poorly and and and but had high margin, but probably a one to two, three turn. And all of a sudden we took a high profit, high margin category, and we're getting seven or eight turns a year from it. Uh and that was the beginning of that. And of course, you all know how where that led to from there, just a just a major accomplishment. And then from there, retail link. You know, Walmart led Retail Link. And I remember Bill Fields was kind of the the one behind saying, you know, we need to share this information with our suppliers. Um, and that was a big step. And, you know, of course, there were people that were skeptical. Well, you don't want to share information with suppliers, you want them to know everything. You know, you want to have the advantage of knowing when they don't. Uh he said, no, we want them not only to have that information, but to be able to take that information and make us better.
SPEAKER_01:Hey, John, I can remember that, and I can remember how it started because we were selling hardware to the suppliers. You know, the suppliers had to buy the computer, it was preloaded. And then within our building, you know, Retail League was brand new, and they were testing buyers. They pulling us in, saying, okay, if you want to look at this item and see the sales by state, how would you do that? How would that? So, you know, Walmart was again inspecting what they expected.
SPEAKER_02:Right. Exactly. Exactly. So that's, you know, those were areas where Walmart uh at times were resistant to change. And then the last thing I thought about, you know, was e-commerce. And the reason I bring e-commerce up, and this may not go over well in this community, but e-commerce is an area where Walmart didn't raid and uh and got behind and and you know, doing a fantastic job of catching up and are very focused on it now, but it was an area where and I remember as a buyer they were talking about e-commerce, and I was like, that's never gonna work. And I'll put it look at the Sears catalog, and look at the Pennies catalog. Uh nobody really envisioned uh that that was gonna be the way it is today, so we're behind. Uh but they'll catch up. So my you know, my question um is for AI is what does that look like today? What are we seeing today, and possibly what is that gonna look like in the future? That's what everybody wants to know.
SPEAKER_01:But before we get into AI, you know, on the e-commerce piece versus store piece, um, let me throw out, you know, something, and this might not be very, you know, popular, but we're listening to buyers sometimes and they say, hey, we're not gonna do any mods or changes. We're just we're just gonna update things on e-commerce. And my question back to them is how many people walk through the store and say, you know, I haven't seen the assortment change in more than a year. I better go check out what's online. Uh I would tend to think that the more changes you see, the more times you want to go check out what's online. If you're not doing something different, if you're not showing the customer something fantastic, what what is it? New merchandise is the lifeblood of retail, right? Uh I understand there's an operations piece, I understand there's a markdown piece, but uh to not do modzer changes uh for a year on some of the biggest categories, you know, I I don't I don't like that decision. Um and I don't think that just translates directly into e-commerce. What do you think about that?
SPEAKER_02:I I agree. I don't think it translates directly into e-commerce. I do think um I do think that there's kind of a a give and take with e-commerce because um the volumes aren't, you know, the volumes aren't there when you compare that to the volumes you'd get if you had a store item, but 3,500 stores, uh you know, you you can really get pricing to where you need it to be. But yeah, but 3% increase on in-store is is better than a 50% increase on e-commerce. Right. Right. And I know I know that because uh Walmart feels the position they're in with e-commerce that they they're putting a big focus on that. I don't disagree with the focus on that, but I'm kind of like you, I think that you know, blocking and tackling and brick and mortar still matter. And uh and um, you know, I think there has to be a balance between that. I agree that newness in the store, because you do, you know, Walmart does enjoy traffic, you know, that that a lot of retailers would love to have, and to take advantage of that traffic and and use e-commerce, you know, don't don't walk away from e-commerce, but use the store to enhance e-commerce and vice versa.
SPEAKER_01:I think you can do both, yeah.
SPEAKER_02:Is the key to it. So my question, I guess, uh, do you have any examples of where AI is being used today? I know we all, you know, maybe go on to Chat GPT and and try to learn things that way, but any examples that that you might have?
SPEAKER_01:I am, you know, I'm a neophyte and I'm just scratching the surface, I'm scratching the surface. But um AI is slowly making its way into my life. On the work, um work side, I'm using it to write a lot of letters and to include content. Um now, I won't just say, hey, write me a letter about this. I'll write up something and I say, what am I missing? And and nine times out of ten, you know, oh hey, Brett, you're missing boom, boom, boom. Um on the personal side, I've been incredibly, you know, um uh uh impressed with, hey, I want to make a decision on this, this, this. And AR comes back with, have you considered this? Have you done this? Have you done that? I asked for a process on how to get a deed back, you know, and it was, oh, you're in Benton County, you do it this way. And there's nine steps to do this, you know, but it was all laid out for me. It wasn't just start here and then, you know, go watch a YouTube video. Um, now I I printed those steps off, I handed it to my assistant, so we'll wait to see if that happens. Just teasing. Um but my point is AI is coming in our personal life, it's coming in our professional life, and I think on the professional side, we're just scratching the surface. We don't even know how it's gonna affect us in the future.
SPEAKER_02:Right. That's that the kind of the point of this discussion was you know, Walmart leads. Doug has been very specific about uh the challenge. Really, I see it both as a challenge and and kind of a um an opportunity, too, because uh when he announced this, he also announced that that Walmart is has an association with OpenAI where they're actually going to train their associates and give them AI certificates. So I thought that was interesting. I'd really like to delve into whether that is available on the on the supplier community as well, because I think uh, you know, 30 years ago you didn't have retail link experts on the supplier side, and you do now. In fact, probably some of the smartest minds out there when it comes to retail link in Walmart systems exist on the supplier side. So I think you've got to bring the supplier along to that as well. And uh, so that's kind of why I'm looking into this a lot closer. And uh, you know, I'd love for anybody that's got insight, shoot us, you know, shoot us an email or whatever and and give us some insight. Maybe we come back here at some time with some more expert um analysis. But one of the things I'm seeing, and uh, you know, I do I work with some companies that where design is is important to driving the uh sale of merchandise. And and you know, designers are limited right now to how much they can produce. And I get frustrated sometimes because I see, you know, one of the things I do is I go to the, I go out into the market and I find items and I say, what if we did this, this, and this? Well, I'm not a designer, so I can't sit down and and do all that and go to Walmart and present a design. So I'd rely on the design teams that we have and get frustrated sometimes because they don't have designs right away. I mean, I want I see something, I want to go to the Walmart buyer and say, hey, I think this is a great idea. Uh, why don't we do this? Well, AI, um, they're starting uh in China, especially the because the company I'm working with there talked to one of the owners of the company, and they're working really closely with some Chinese AI suppliers that uh that can do that design, where I where I could go in and say, hey, this item, I like this item, I like this, plug it into the system, and then it creates designs for you. And they may create a hundred of them. Um and so you still have to have human input to say, well, that you know, we like this, this, and this. But if if you had a hundred designs and you could narrow it down to five versus not having anything for three weeks, I think it helps the whole equation of being quick to market, you know, quick to market. And so I think that's that's something I think that's coming and something I think we'll uh you know we'll see more and more of, and and uh something that I think suppliers ought to be looking for.
SPEAKER_01:I think you're dead on, John, to for a buyer or for anybody to see what all the options are. I think some of the the designers uh who do business with Balmart and apparel or domestics, you know, they've got a great eyes and can curate that assortment. But someplace to start, um, key.
SPEAKER_02:You know, to to me it starts with photos. You know, I I go to stores and I take photos, and that's the starting point of it, but that's where it ends for me, and I rely on something else. So having that, you know, having to be able to be quicker about that, I think, is important.
SPEAKER_01:Well, again, on the domestic side, where and by the way, Andy, that's where John and I started back in domestics. Um I've been uh working with Julie McKenzie for the past two years, and she's come over to Trident, and um um I would hate to have to pay for her sample budget. She buys so many, she is so inquisitive, you know, uh student of retail.
SPEAKER_00:She is.
SPEAKER_02:She's she's fantastic.
SPEAKER_00:We've had her on doing business in Bentonville. Uh uh we we hope to get her back. Did you send a word in edgewise when she was on? You know, she's such a great guest because it's one question, and then I get to listen and learn. You know, but I say that with all due respect. She's brilliant. Oh, she is.
SPEAKER_01:Uh but when it comes to, you know, we're talking about designers and what you can put together to buy some samples, uh uh, excuse me, the job she does in curating assortment after seeing what's on the in the total marketplace, second to none.
SPEAKER_00:You know, uh John, I think you make a real interesting uh point uh talking about uh Doug McMillan and his uh comments about AI, because I think what's happening here, and I think you you used some great examples of where Walmart was hesitant to change. And you know, Sam it's just we gotta go back. Sometimes you gotta go back and listen to what Sam Walton taught us. He said the most consistent thing at Walmart's change. Sometimes we get so busy we forget the wisdom that he shared with us and through examples on many of those Friday and Saturday morning meetings where Sam taught us about change. And I think what on the on the e-commerce side, um I think I agree with your comments. I think we we were late. Walmart was late there. Um and I think the learning for all of our viewers here is that you know it's catch up is hard. Because as you're doing catch up, others are re are inventing or reinventing. And we we know we know that happened. And so I think the learning on AI uh is that what Doug and I read his comments on LinkedIn when he he he posted those comments, and here's the first thought I had he's stepping out saying we cannot be second here, you know, and we have to be first. And I think he he leveled the playing field by said to back when you're Comments is that it will pretty much change everything. And but yet he's he did he quantified some of that as that hey, we're not we're not laying off, we're not doing these things, but it will change. And I think he's pushing that as a message. And then I think the open AI thing is is a great source to help train, educate the people, uh, the millions of people that are going to be using this. Um because I could see as a store manager, when I was a store manager, I could see if I had AI on scheduling and all those other things that mundane I spent my time on instead of were the customers and the merchandise side. And I think that's the thing here that we that I think uh that is that we have got to make sure, you know, on on all this technology, you said it, you know, I mean it's cut my research in half of the time I I spend when I research, it's cut it in half using AI. I can't imagine what in the future is gonna be with it. But but I think the point here is we we got to embrace change. And uh all the people that are listening or watching us today, uh it will affect you.
SPEAKER_02:Right.
SPEAKER_00:It's gonna happen. You can't you can't hide from it unless you if you go off somewhere, I don't know where, but it's gonna affect your business, how you do your business, your customers are gonna hide your customers, and you're gonna have to embrace it. Is that is that what you're telling us? Because that's what I just learned from you.
SPEAKER_02:Yeah, that's uh yeah, that's kind of my thoughts on that. Yeah. And I I love the fact that you know, Doug said our goal is to create the opportunity for everybody to make it to the other side. So uh to me, that's kind of putting the ball in our court, you know, and and saying, you know, you need to take the responsibility to put those moochies.
SPEAKER_01:Yeah. And you have to embrace it and you have to figure out uh well, what did Mr. Sam say about if uh if you uh uh worked yourself out of a job, you know, you were to be promoted, right?
SPEAKER_02:Right. Right same type of thing. Doug calls it um the training that they're offering there. So he says getting them plused up. Meaning enhancing you know what you do, giving you enhancements to to allow you to do it better. So I think that's a good discussion. Uh I think there's probably a lot more detail to it that maybe, you know, in a further uh podcast we could get into, maybe invite some people that are really, really digging into it right now.
SPEAKER_00:I think we should do that.
SPEAKER_02:The other thing, um, you know, I I try to look at things that are on the minds of supplier side here in Bentonville. And one of the things, honestly, this year uh has been the tariffs. Um and um just kind of the the process, you know, when we first heard of the tariffs and um what that means to say suppliers that are producing in China versus suppliers that are producing in India or other countries. You know, and at one time I think we were looking at 130 percent tariff out of China. Well, anybody that's in this industry knows that that's a big disruption that that would have happened, and uh, you know, one of the results of that were nobody knew what what to do. You know, um commitments were coming due for holiday time, um, and it was just a big, you know, nobody nobody really knew uh exactly how to approach it. Fortunately, you know, that tariff was was lowered to a more reasonable rate, but there's still a you know, there's still a kind of an uneasiness out there about what's you know what's the next thing that's gonna happen. So um my question on that is is um when a tariff goes into place, who takes the hit?
SPEAKER_01:In my experience, you know, I'll let maybe Brett, you could Well first of all, I would just want to say I have never spoken so much and known so little about what's gonna happen in tariffs. Right. Everybody wants to talk about tariffs, but who knows, you know. Crystal. Yeah, Crystal Ball, you don't know. Um The worst thing about the process uh has been just the uncertainty. It's it's not necessarily the percent, the uncertainty uh we're we um if somebody watches this, you know, six months from now, you know, we two weeks ago I was saying how lucky China was because it was cut and dry. We knew what the percent was and done. Uh and then something came up and now there's some uncertainty there. That's the worst. That's terrible. Um you know, we all we all want someone else to pay for it. Someone else. I don't know if it's the customer else to ultimately it's a tax on the customer. The customer has to pay it. Maybe the supplier is giving a little bit here, maybe Walmart's giving a little bit there, um, but long term the customer is gonna have to pay for this. Um my two cents.
SPEAKER_02:Yeah, I I think I think the customer is gonna pay for the bulk of it. But I do I do know uh that that suppliers are doing everything they can to get it, you know, they don't want to lose the business. Um so they're taking some of the hit too. Um, but what are you seeing on the floor? Are retail's going up?
SPEAKER_01:What I saw originally was um not your opening price point and not your mid price point, but to upper tier price points, Walmart uh was a little fast. Um they knew it was coming, and so some of the higher price point merchandise went up. If you go look at your end caps now on checkouts, uh, you know, it's uh$497, the five twenty-seven, you know, they've broken the$5 price point, they're getting into the pregnant price points, or they're going up to the next 97 uh real quickly. Um throws at SAMS, you know, we're used to those being anywhere from 15 to 19, and now they're 24.96. Um so um the next thing to hit are opening price points. Uh we'll start seeing more and more of those hit. Uh and they have to uh when you are charging, you know, 50% out of uh India. Um funny story, I saw uh uh Arthur Emmanuel the other day. Yeah, and he's saying, Brett, the economy hates you. Your wife is from Brazil. 50%, you do business, so much business out of India, 50%, you know, what are you doing wrong in life? And I said, hey, you're right. Um uh but with percentages like that, you you know, Walmart has to take those price points up. But opening price point will be the last. Are you seeing the same thing?
SPEAKER_02:Yeah, I am. I'm seeing uh I'm seeing prices going up moderately. I don't see a lot of drastic changes. And I did notice um when I was walking through the Walmart stores in July that there was an extra emphasis on pricing image, because this was right after all the discussion and all the panic over tariffs uh happened on the you know in the retail community. Um, but they were out taking um items that you know had a great value associated with it and just and focusing on those items. So you got to kind of look around a little bit, but it kind of makes me wonder uh you know what happens to the mix eventually. Does do some of the things that that do they kind of mix out?
SPEAKER_01:Or does opening price point become bigger?
SPEAKER_02:Do uh customers that maybe go into department store are are that level or they are they trade and start shopping at Walmart? So I mean there's there's a lot of unknowns, and we're just learning it. I'm digging in every week and trying to figure it out. Um but that's you know, that's it's something that's uh interesting to watch and something that we should would keep our eyes on.
SPEAKER_01:Great point on the mix, because you know, um as groceries, you know, they have to steal a little bit from uh hardlies. Um how much do they steal? Um uh how much of the customers do they go to the next level down? Do they, you know, yeah.
SPEAKER_02:I think another interesting number to look at will be um the when when retailers announce their third and quarter would be to look at uh the sales minus inflation to see you know what what the true gain was, and we'll start to learn a little bit more about that. But the other thing, the other strategy that I've seen out there is um diversifying the country of origin. Now, I happen to be somebody that has some clients that that are heavily invested in China. Um they have been for many, many years. I mean, China's a very developed industrial country. And um, you know, 30 years or so they've been doing these things, so they're very good at manufacturing. And some of the other countries that are alternatives to China, and and this is all specific to category. Um there are countries that are that are just not as far developed. And and to me, it's do retailers take uh, do they just say, well, we'll go whatever country gives us the best cost, or are they taking an active role in helping develop, you know, some of those countries? A company like Walmart could go a long way in and in helping, you know, some of these other countries by saying, yeah, we're gonna we're gonna give you we're gonna give commitment or whatever uh and allow you the time to to invest and to bring everything up to speed. Um so those are the some other things I'm looking at. And then the last thing, um domestic sourcing. You know, Brett, you and I, uh when we were buyers in 1995 and domestics, it was 95 percent done and and the Carolinas.
SPEAKER_01:That's right.
SPEAKER_02:You know, you had West Point Pepperl, uh Springs, Canada, Dan River, you know, these were major mills that that produced almost the entire textile industry, and that all went to India and China. So is there a chance?
SPEAKER_01:I I think so that these products are. I think so, John, but it it it's gonna take a lot of money. Um a lot of investment. A lot of investment. Um Jeff Kemback, who I've worked with for years at West Point Stevens, you know, was reminding me last year how many thousands of people were working at the at the at the mill. They had 10,000 people in one building. And now uh when we go to India, when we go see manufacturing someplace else, uh it's hundreds instead of thousands. Also, West Point Stevens had four floors in New York, right? You know, uh selling. Yeah. Right. So pretty expensive. The domestics market doesn't have four floors in New York anymore. Yeah, you know, a little bit, a little bit different. So um interestingly, and I won't mention like who, but you know, we know some people who were started thinking about moving into the United States, and uh the biggest cost is uh the manufacturing, um the machines, bringing those over. And then a lot of the companies who service those machine machines, they're set up in China, they're set up in India. Are they set up in the United States? No, they're not. So you would have to change multiple industries. Um You know, that this world and um getting merchandise is incredibly complex. When you have a manufacturer, um we have a manufacturer uh who's making ironing boards. Do you remember what an iron board is, John? You know, I know you don't have iron boards. Okay. That's right. Okay. I knew all of them. Details. We have a manufacturer who's uh uh making uh ironing boards in the United States. And uh um, you know, there were cost increases involved in the category because of Chinese steel. Um and what happened to U.S. steel after that. I won't get into the specifics, but everything is connected. Um you pull one lever over here, you don't know it, but it's gonna be affected downstream. Um I would love for there to be more U.S. manufacturing. Um that's difficult and it's quite an investment. And it takes investment. Again, in an age of uncertainty, which is the worst one, how do you pull the trigger on making an investment like that?
SPEAKER_02:That's that's that's that's pretty critical, too, yeah. Exactly.
SPEAKER_01:Sorry, I that I sound a little bit negative, don't I?
SPEAKER_02:Well, no, no, no. I I I I think we're not gonna get to the heart, we're not gonna get to the heart of any matter by by trying to spin it positive all the time. I mean, I and and I really didn't want the discussion on terrorists, you know. The last thing we want to do is get into a political discussion with it, but it's a reality discussion for anybody that works in in this community, um, because you want to be able to source your product and provide the best cost possible, and you want to have a plan to grow your business and and all of that gets the confidence. All of that gets us.
SPEAKER_00:Yeah. So I think this has been a great conversation. Uh there's, you know, the two topics uh that you gentlemen have discussed today, AI and tariffs, uh, they're difficult topics. Uh I I think every day we're learning, we're leaning in. I think the the critical point here, and uh listening to your discussion back and forth, is that it's not gonna neither topic's going away. Uh you're gonna have to embrace it. Uh I think you've given some suggestions around embracing both of those key topics. And what I would love to have you gentlemen back in soon as we because this is moving fast, no question about it. It's not going away, it's it's moving fast. We we will have to learn how to manage these things within our business structure. And uh I'd love to you gentlemen come back at some point soon and share again where you think this is and where it's going and some helpful to helpful um comments about it. So um it's been a great discussion, and I appreciate it. Now, what I want our vicious and and viewers to do is to be able to find out how to reach out to you gentlemen. So, John, how do they reach out to you directly and how would you like people to reach out?
SPEAKER_02:I think the best way to is go to my LinkedIn page. Okay. Hopefully we can put that uh information on the screen, but uh we will. I'm pretty responsive to that. Um uh and if you look at my LinkedIn page, I like to write articles and and try to, you know, things that that interest me in the retail arena. Uh I like to visit stores a lot and um and report on you know things that I'm seeing in the industry. So I would love uh nothing more than to have you know feedback. Okay. And uh, you know, maybe some discussions with other people um about what they see. And and uh, you know, the main thing is um we're a community here and uh we grow with Walmart and you know we want to make sure that that we're doing everything we can to keep up.
SPEAKER_00:Great, great. Okay, Brett. Um uh how can they reach out to you? Same thing, LinkedIn. Okay, great. Brett Dye, he's CEO of 5G Consulting, so you can check him out there. Uh message him there. Uh as I mentioned at the top of the show, uh Brett Russ is a great company. Uh he's got a great team there, as you mentioned already. And I know you're gonna be, you're, you're, you're dealing with this every day.
SPEAKER_01:And so Andy, I can't tell you, we are so blessed living in Northwest Arkansas. Walmart is still gonna grow. Sam's is still gonna grow. These are great retailers who um the best thing about them is they listen. They read the market, they listen, they have great leadership over there. And uh, if they make a mistake, they change. Uh they are fabulous. And um, so um I'm very bullish about the you know, Northwest Arkansas and retail.
SPEAKER_00:Well, it's been a great uh great time with you gentlemen today. I can't thank you enough, John. Thank you for making all this happen today. Uh with Brett getting him here. Uh we just got to get him back, right? And so we'll we'll work on that. I'm pretty cheap. I know where he lives. Yeah. Um to all of our viewers, thank you so much today. Uh check out our website, doing business in uh binville.com. Check that out because uh uh there's there's uh we post articles every day concerning retail, omnichannel, the key things that people are talking about. Or so so check our website out. We also you can uh we'll make sure on our website we'll post this uh both of these individuals' uh uh information so you can reach out to them. But gentlemen, it's been such a great morning and time with you. I appreciate it, and welcome any time back to doing business and better building. Thanks, Andy. Okay, thank you everyone. Have a wonderful day. I'm Andy Wilson. Thank you very much. Goodbye.