Ep. 21 - The Club Channel Mindset

Treating the club channel like a standard big-box retailer is an expensive mistake that drains marketing budgets. Brands routinely dump capital into oversized packaging and assume the job is done, completely ignoring how membership dynamics radically alter consumer intent. This week, TJ Palladino from Genesis X breaks down the practical realities of winning at Sam's Club and scaling retail creative with AI.

We sit down to unpack the unique architecture of warehouse clubs and how brands can leverage high-fidelity member data to build long-term customer value rather than chasing immediate ROAS. TJ shares tactical insights on executing within an instant savings booklet, maximizing physical sampling, and utilizing in-club digital screens to capture valuable first-party insights. He also dives into the accelerating speed of retail creative, offering a fresh philosophy on using artificial intelligence to handle scale and regional versioning while keeping human taste and judgment at the center of the strategy.

The reality of the club channel is unforgiving: with highly curated, limited assortments, your product can easily be replaced by a competitor if it fails to perform immediately. High-end sampling programs are exceptionally pricey, and flooding digital channels with unoptimized AI creative only generates noise that alienates modern shoppers. Viewers will walk away with a functional framework for running pre-shop exposure campaigns and a clear understanding of why machines cannot replicate lived human experience.

If you care about retail media networks, club channel growth, and the intersection of technology and creative production, you’ll get a lot from this. Hit subscribe and share this episode with a peer who is trying to crack the code on modern commerce. What is the biggest mistake you see brands make when transitioning their strategy from mass retail into a club environment? Let us know in the comments.

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0:00 - Introduction & Guest Background
6:14 - Quick Hits: AI Trust, Private Label, and Pizza Hut Nostalgia
19:11 - Demystifying the Club Channel Strategy
34:01 - Core Club Marketing Tactics: ISB, Sampling, and Kiosks
43:28 - The Future of AI in Retail Creative
56:52 - Bold Vibes & Episode Wrap-up

Transcript

SPEAKER_00 0:13

What's up, Party People BV here, and welcome to another episode of Retail Media Vibes, a doing business in Bentonville podcast. We are recording live at Podcast Video Studios here in Rogers, Arkansas. If you are interested in starting your own podcast, see the people here at Podcast Video Studios where they'll help you get it set up and keep it going. Today's guest is TJ Paladino. So I've known TJ for quite some time. He has uh a background in retail, CPG, the club channel, which will be a focus for our topic today, and then AI and creative. So we're gonna have a very robust discussion around those things. Uh, today we also have some quick hits that we're gonna talk about. And I as I said before, the uh the main topics will center around Sam's club. It's life is better in the club. Um, so we'll play bold vibes at the end and get TJ's reaction to some provocative statements that I'm gonna throw out there and see what he thinks. And so, with that all out of the way, let's meet today's guest. Welcome to the show, TJ. Good to have you. Thanks, BB. Happy to be here. All right, so I know you, but the audience doesn't know you. Yeah. So let's get to know TJ. And so tell us a quick version about you and uh and your story. Yeah. So I've been in Betonville now for about 11 years. Uh, prior to that, I was a East Coaster, uh, New Jersey guy. Uh, spent my career, uh, started yeah, um, I started my career in late night television. So started as a page trying to write jokes. Yeah, trying to write jokes for David Letterman. Um, and then pivoted. How did that go? Not very good. Oh, okay. I'm sorry to get that. Sorry to get it. There's a reason that I I got into retail. Uh but uh I had the opportunity to to do that for a little bit, and that opened up some doors where I ended up working in media as a my path into media. Uh did some time working for Viacom and MTV, did the did the reality TV thing for a little bit. Uh like producing or on the show? Um on the show. I uh I was a casting uh uh producer for a show called Made for a little bit, um, and then uh went to agencies, uh, did the agency world for for a while, um, startups, and then moved here. Uh okay. So yeah, yeah, it's very interesting background because like you're in it as far as like the capital of media in the world, yes, right in the New York area, right? You're in in you're working with big shows, big big brands, yeah, uh like Viacom. Yeah. How the heck did you get to Northwest Arkansas? I fell in love. Oh, love. We love love. Yes, we love love here. Um, yeah, the day after I got engaged to my my now wife, she got a phone call from Walmart um about a job. And six weeks later, we were in uh we were in Fayetteville looking at looking at housing and made the move to Bettonville uh soon after. So, okay. How is that decision made, right? Because I'm trying to get into this the the time that you were in, yeah, right. So you fell in love. Yeah, you met your you met your soon-to-be wife at that point. Yeah. Let's give up my career in media for your opportunity in Walmart. Absolutely. How like what was that discussion like? Um it was actually a lot easier than you probably would imagine. Okay. Uh I think I was ready for for a change. I know uh my wife was as well. Yeah, it seemed like an exciting opportunity at that point to uh to go do something that we've never done. Yeah. Um, I never think anything is permanent. And so the ability to to go in a place I've never been, I drove through once many years before. That was really exciting to me. And so we we packed up. And when I moved here, um I kept hearing about shopper marketing and I didn't know what shopper marketing was. And everyone obviously was talking about Walmart and Sam's Club and um had the opportunity to to join Saatchi X, is where I met you. And yeah, and uh I heard about this other guy who had uh initials for a name and was doing some cool stuff in digital, and so tried to spend as much time with you and um hardly knowledge uh from Saatchi and went to CPG with a craft for a little bit and then uh eventually to the retailer, to to Sam's Club in Walmart, where I worked um in the retail media business for for about five years. Yeah. And now, now I'm here at uh Genesis X. So back to the startup world, doing some really interesting work with AI and creative. Um, but I think the through line to all of that, which it does feel like a little bit of a crazy journey, certainly not a linear journey. Right. Um I think everything that kind of ties it all together is my love of storytelling and connecting with people. And so wherever I went, whether it was doing reality television or selling ads uh for Walmart, um, there was a there was an element of connecting with people, which I love. Awesome. Well, you know, it's it's it's great to have you on. And, you know, so um, you know, if we look at your purchase history, whatever retailer you want to think about, sure, what would be a surprise in your shopping search history? Um, there's a lot of gardening supplies. Oh, it's that time of year. It's that time of year, but I'm always buying things for that. Um, I love gardening. So I'm trying to be better at that. So you'd be surprised to see how many um, I don't know, fertilizer or seeds or gloves, funny sun hats, all that kind of stuff. I buy it all. Cool. All right. Well, it's great to get to know you, TJ, and uh for the audience. And so now uh we're gonna jump into our quick hit. So we have a few quick hit stories, three of them that we're going to go through. And so the first one, uh, the headline is shoppers aren't impressed by AI generated marketing, which I think hit home hits home for both of us in our day jobs. Yes. Uh around what people are are thinking around AI marketing. So eMarketer reported that uh through through data from Clavio uh and Data Lilly that visible AI generated marketing content may create a trust problem for brands. So there's only 7% of consumers that said visible AI generated marketing content makes them trust a brand more. I I wonder a little bit about that. Like, what do you really need to make a brand trust a brand more, right? Yeah. You know, so I don't know if AI is really the right thing to do that. But uh 31% said it made them trust the brand less. That means 61% said, nah, if you do it, you do it. If you don't, you don't, right? So and in a way, I think I actually look at that as maybe even a little bit of a positive. Um so you know, right now AI and creative is is somewhat, there's a tension point, right? It's a little bit of a hot buttons in some cases. And you know, uh both both you and I work in in that space, as I said before, in our respective jobs. You know, but there is still this need for break for content, yes, faster, more, better, maybe to less expensive, for sure, right? Sure, less expensive. So there's so you know, are you surprised by the reaction from from shoppers around when you ask them? If I asked you a question, like, this is an AI ad, what do you think? Right, as soon as you say AI ad, I think there's gonna be a a something that's gonna go into your mind. For sure. Um I think first like AI is a is a huge umbrella term. And within that, there is the AI and the content creation piece of it. Right. And then even within that, there's a huge chasm between AI creative. So there is a lot of what is is rightfully labeled slop. And then there's a lot of really great content that leverages AI in a positive way to make the work better, uh less expensive, um, or output more quickly. Um I think a lot of people view AI. Um I think they think of AI in the way that I think of AI originally, which was you're scanning on YouTube and you get served an ad, and that ad is very blatantly AI. Right. It's disingenuous in its what it's selling. It looks really bad. There's no human element of it. Someone probably prompt something really quickly, was happy with it, and and sent it out.

SPEAKER_01 9:06

Yeah.

SPEAKER_00 9:07

It was a one-shot. It was a one-shot like one prompt, one output, go to market. And and that is, that's that's not good. That's certainly not what what I do. That's certainly not what you do. Um, it's it's about creating again, going back to the storytelling. Like, what is the story that I'm telling? And how can I use this tool to enhance that story? Right. Similar as like for virtual, um, yeah, similar as virtual effects. Uh yeah, yeah, you know, people were always a little hesitant of those. You look at like industrial light and magic when 30 years ago um, you know, CGI became much more mainstream. Right. There's a there's a fear in that. And then what happened was, you know, they they grew as a company. Right. And um you embrace the tool, you can create better content if you're fearful of it or you kind of just use it for most baseline stuff, you're gonna get you know, get garbage. Yeah. So I also think, you know, and I don't know if this is necessarily a good comparison or not, but if you had a an ad with a model in it and you said, what do you think of an ad with a photoshopped model in it? What would you think? And I think as soon as you say they were photoshopped, I would imagine that a certain reaction would come from that based upon their whether it's perceived or actual experience with what that is. Right. I also think, you know, with you know, we've you know talk about AI a lot and talk about AI creative, but I still think that even bad AI creative is, and I'm not saying necessarily in marketing, but just in general, is actually advancing the uh the practice a bit more because people are getting used to what they see when they see AI, right? And an AI image. And so the more that people see it, even if it's quote unquote slop, you know, you know, it doesn't take a long, it doesn't take much to make it a little bit better so that it's you know fit for purpose. Right. All right, so cool. All right, let's move on to our next story. So the next story is high income shoppers are buying more private label.

unknown 11:10

Yeah.

SPEAKER_00 11:10

Love a little private label, don't you? All right. So there was a study um by uh there was a study with uh Simon Kucher uh that said that high-income shopping shoppers are increasing their private label purchases. The study found that 44% of higher income shoppers earning $5K or more per month are buying more private label than last year. Um, and that's compared with 34% of lower income consumers. So, you know, I think that there's this perception around private label. It's that, you know, that uh takedown version of what a you know a first party brand might produce um and may quality, you know, it obviously should be less, you know, in some ways. But I think you know retailers have done a really good job of improving the visit their the quality of their brand and and and kind of marketing their brand in their own way, right? Yeah. So does, you know, when you think about you know higher income shoppers buying more private label, do you does that, you know, again, does that surprise you in in that direction? I don't think it surprises me too much. Um if you look at the club channel specifically, right? Kirkland and Members Mark, they're great, they're great brands. Right. They stand on their own as a result of uh the poly products that they're doing. So I'm not surprised people are are purchasing those sorts of uh those search of uh those sorts of items. Uh I think it's also probably better for the for the industry or for the category as a whole. It really forces and and pushes the other brands to to find other ways to compete. So you can't just compete on price anymore. Right. You have to compete on quality. Right. And that's I think where marketing comes in. Um, you know, so create a create a strong product to compete with with one that is, you know, uh inherently designed to be less expensive. Right. And so then you have to lean into your marketing and understand your shop or tell that story to them. And that's I think that's where we come in as marketers to help do that. Yeah, that's that's very interesting because you know, I think you also look at you just say, look at wine, right? You know, and so I think there are people who are definitely wine connoisseurs and sure have their own opinions on wine, but a lot of the private label brands of wine have do very, very well. I think Kirkland's wine is very well regarded. Members mark as well. Yeah, yeah, yeah. Yeah, and similarly, members mark. Um, and so it's like you see these brands now playing into even I I consider wine a little bit more pre like a more of a premium than versus like laundry detergent. Sure or tablet vapor. So I think of it that way. Um, but it is it is interesting to see them play more into those into those areas as well. Yeah. Um, do you think you think like how does a a brand defend, like a national brand defend against this type of these brands that are becoming more and more popular, especially even, you know, you would assume that people were buying first party brands are spend, you know, are higher income, but now that's kind of changing. Yeah. So value and what the idea of value is, I think needs to be redefined. So value has historically meant a lower cost. And so you're not gonna win that, you're not gonna win that story or that argument with the consumer. So what does what are the other value points uh that matter to to the consumer that you can speak to? So uh convenience, quality, I think is a really important one. How does this play into my daily life? And then also nostalgia, I think is another big one. You have the legacy and you have the uh historical qualities to uh to lean in on. Yeah. And I think that is another really strong component to to connect with your uh connect with your shopper. So you're not gonna win on price, but there are other ways to do that. And it's it's being you know, choiceable with that. Yeah, it's being smart about what levers that you have to pull. Yep, absolutely. Well, I'm glad you brought up the word nostalgia because our third story is all about nostalgia. So Pizza Hut. Have you been to Pizza Hut lately? I have actually. Okay, all right. Well, Pizza Hut is turning back the clock to the 90s. Perfect. Do you remember the 90s? I do very well. Okay, great. Me too. So um, so Pizza Hut is leaning into nostalgia by remodeling some locations into Pizza Hut classic. So the red roof, they're bringing back the Tiffany lamps, the salad bar, the pizza bar, uh, the red cups. Um, so it it's really, and even some even arcade games like Pac-Man. So they're really like leaning into the 90s. Uh, they're also bringing back the book it program, which was a reading program that Pizza Hut did, where if you read a certain number of books, you'd get a free personal pan pizza, uh, which sounds absolutely amazing. Um so I mean, that's all nostalgia, right? And it's not all the it's not all locations. And uh, you know, Pizza Hut's a franchise, and so there are certain franchisees that are uh doing some of these conversions and seeing people come back because people love that. So nostalgia, man. Like I did a I did an episode, a podcast episode that did talk about nostalgia and the power of nostalgia, but I thought that this was really, really fun. Um, you know, do you think that in this case, is this really going to be a growth strategy for Pizza Hut? Or do you think it's just like a short, you'll get a short-term bump from this the stores that do that? I I don't know. Um, I I would think there is a lot of QSR restaurants, I think have started to all look very similar. Yeah. That has yeah, that's probably hurt them a lot in this this effort to be modern looking and convenient. Right. So hearing back to uh a time where each of these brands or these these restaurants were had their own personality, right? Yeah, smart. Um, especially like Pizza Hut. I think Pizza Hut has a really great, really great visual story and they have a way to connect with their past consumer. Um, so you think about Book It. I remember that as a kid, right? I love that. There's a lot of fond memories of reading books and going with my parents to go get pizza after I've uh read enough. Now I get to do that with my kids continually, which I couldn't have done before. Yeah. Now I'm finding a reason to bring the next generation into the pizza shops. Yeah. Um I think it's a smart play and it's it feels uh genuine and sincere. And as a brand, it feels, it feels right. Yeah. One of the things I found that was really interesting on the book it side of it was when I was researching this story, I read in the comments was there was um a comment from uh someone who had said, like, they grew up poor and they would have a library nearby in the book it program, they would go to the library, get free books, yeah, read all the books that they needed to read in order to get something that they wouldn't normally be able to afford. Yeah. Right. Be able to get that pizza. Yeah. And it was in a way, to me, that was very powerful, right? Because you're bringing opportunity to someone that may not necessarily have the means in which to participate. So I'm very much in in favor of it as well. So um, yeah, I don't know if you have any other uh bring back the third place. And I think putting personality back into these environments helps with that. Yeah, yeah, absolutely. Absolutely. Yeah, love the Pizza Hut buffet for sure. Yeah. All right, cool. Well, that's quick hit. So we're gonna now move on to today's main topic. So queue up the 50 cent in the club, but we are talking club channel. Cool. And you know, you spent time at Sam's Club, so you are very familiar with the club. You've also been on the CPG side and know what it's like to work with the club. Yes. Um, I understand you're also a member of the club. I sure am. Yes. Yes. Um, I am also a member of said club. Uh, but the club is just not another retail channel. Right. Right. There are some very important uh nuances to that channel that have to be considered when you know your brand trying to figure out how to win in that channel. Right. It's not it's not just a Walmart and you just okay, everything's twice the size size, so it's twice the twice the program, right? Twice the campaign, right? It's it's not you can't do that anymore. Uh or you can't do that, it just doesn't work. It's not the right shopper. Right. All right. You have membership, assortment is different, you have pack size, you know. Um, it's typically a stock up trip. So mindset is totally different. Absolutely. So, you know, from from your experience, like what do people most misunderstand about the club channel? That it is really just Walmart with bigger packaging. Right. It the the the club channel really is unique. So you talked about it, touched on it a little bit, but the the biggest piece of it is you choose to shop there. You pay for a membership. Yeah. And so with that comes a level of expectation that you don't have going to a regular uh retail destination. Right. So there are benefits of being a member that are um obviously with the value, the cost of the products, uh, but there's other benefits that come with being a member. Um, you know, so a whole slew of those don't bore you with. But also there's an expectation on the assortment. So what um what is on those shelves? So it's very curated and that's that's intentional. So they keep prices down, but also shows the member that as merchants, as a company, they're very intentional with what they're putting on those shelves. They're the best of the of the best for you. Um, and so you expect expi expect uh an experience that is um that is much more tailored to you. You also shop a lot less um at the club. So you maybe do twice a month um at the club. So there is an expectation of the stock up, but because of the way it's designed with the curation and being tailored to the members in that area, um, there's a lot more treasure hunt and discovery that that is a part of it. Yeah. I don't know about you, but that's my favorite part of the trip. I have I have a list of things that I know I need to go get. Right, sure. But that's not why I. I'm there. I'm going to spend more time at the club than I am at at a at a Walmart because I have the expectations I'm going to find something that I hadn't planned on to, planned on finding when I was there. Yeah, I think that's as an excellent point. Um now I shop there, sounds like a little more frequently than you. Uh my wife and I have a Sam's Club shopping date. Okay, you know, and so that's four o'clock on Saturday afternoons. So after most of the people, we we typically go, I would say, you know, three to four times a month. Oh wow, super, super member. Yeah. What what I what I love, and you mentioned this too, is the discovery aspect of club. Yeah. Um, I shop Walmart as well. Yep. But when I go into Walmart, I am not necessarily in the mindset of, oh, I can't wait to see what they have on the shelves. Right. Or in action alley. Yeah. When I go into the club, yeah, I don't want to oversell my excitement, but I'm at least anticipating seeing something that I didn't see last time I was there, even though I was there probably the week before. Yeah. And so there's also this aspect of club, and you know, I don't know how much you can reveal or not, but club, you know, companies like Sam's Club make more money on their met on the membership and make very little margins on the assortment of their merchandise. Is that something that you have an understanding of as well? Or is there kind of a balance there? Um, yeah, definitely I think yes, the membership is a is a big driver of the business. So everything, um, all of the revenue goes back to like pouring into the experience for the members. Got it. Is it true that members or memberships take make up a way more of the of the opportunity for Sam's Club than the actual products on the on the show's? That is true. Um, that is true. So if you've heard that, then that's accurate and we can share that. Okay. Yes, that's true. Yeah, we can it's well, so it's a low, I mean, what we're saying is it's a low margin business. It is a low, yeah, it is a low margin business. Right. So yeah, and in the in the primary source of revenue is from memberships, right? And so there's basic membership and then there's a more of a premium membership, but that gives you additional uh additional benefit. Um what are some attributes of like the club shopper that you you think of, you know, when you when you are, you know, when we think about especially in the world of shopper marketing, you know, we think about shopper mom, right? Yeah. And so it and and who that is and you know, shopping for the family and the tri family trip and all that stuff. Yeah, how many clubs are there? There's about 600 clubs. 600 clubs, okay. Yeah, quite a quite a bit. Yeah. Let's let's talk about that scan and go experience for a minute because you know, we do scan and go at Walmart and we do scan and go at Sam's Club. I will say that, you know, one of the things that my wife and I really appreciate is the scan and go app full from from Sam's Club. I think it works especially well. Yeah. Um, and it definitely makes it a much easier in and out, especially now with the, you know, with the archways and the ability for it to detect, you know, what you've purchased based upon what you've, you know, your receipt and and so forth. So, you know, what other technologies besides like Scan and Go do you feel like members are really gravitating to at this point? Um I think Scan and Go is is really the biggest the biggest technology that I've seen be be adopted. Um the the club has done a really great job of weaving in other other ways to communicate to the shopper, which I think is done really well. So they have gas screen TVs now, which is which is helping to connect the shopper in a way um you know more um in a more incremental fashion. Um you have ICDS, so TVs and the the messaging there. What is I C D S that's ink club display screen. Okay, cool or digital screen. Ink club digital screens. Okay. Awesome. Um, so another way to connect with the shopper. So um these are things that um are in other retailers, but I think they're they're done in a really natural way at Sam's Club where they don't feel intrusive. They feel very much a part of the the shopping experience. Yeah. Yeah, I I think obviously when you have something like a membership or club, you know, whether it be you know Costco or or Sam's Club or BJ's for that matter, right? One of the most valuable things that those retailers have is the member data. Yes. Right. You cannot check out without your card. Yes. And obviously everything that you've uh purchased is linked back to your account. Yes. Um and and I think that's such an important part of the ecosystem. I think from a marketing standpoint, sometimes that can be a challenge. We'll get to that a little bit in a little bit later. But I really appreciate the understanding of the membership data from a marketer standpoint. Like, you know, you know how powerful that is. Whereas Walmart, you know, yes, recently they have Walmart Plus, and so some of that stuff can happen, but still a lot of people are using cash, there's no way to tie back. Like there's you know, and they've done a lot of things to capture data. So that's that's there's there's probably another show in just that part. Yes. However, you know, Sam's Club has been doing it for years, right? So it it's it's great. What are some of the ways that you see like membership data really adding to what is done in club? Yeah. So first, like you're you're spot on. Um, I think Walmart does a really great job uh and and other retailers too of inferring information based on on their their shoppers' data. But as a member, you do have that. Um, you have the the data points across the whole the whole journey. So whether they're paying with cash or credit, right? You have that information. Yep. Um, it also allows for things like closed loop measurement, which is really important across retail media. Right. Um, but what you can start understanding um with a member for marketing versus uh a traditional shopper, I think is is just so much more rich. So you can start understanding things beyond uh the original campaign that you might be running. So you might be running a, I don't know, a campaign for a back to school. Um that membership data is really helpful, but how can you take that data and start telling a deeper story to the to the member so you have uh deeper understanding of what's in their basket, when are they buying it, what's the lifetime value of that member for you for your brand and take all of that information and you can start using uh better targeting and and and ways to connect with with the member with your with your media and your marketing. Right. So instead of just broad demographics, now you can be really uh intentional with who you're reaching and how you're reaching. Um so you can start thinking um you can just start you can start thinking in ways that you can't with other traditional, with other traditional media. So you can start thinking about um what's the right products to come together to to tell that story. Yeah. So um with all of this data, you can start creating more personalized experiences for your member. So now you know what they're buying, you can and when they're buying it. Right. You don't have to focus on just ROAS. You can start thinking of longer-term value for that, for that relationship between the brand and and the member. Yep. Um, and that personalized experience, I think, ties back into what makes being a member so valuable. So now members are not getting just uh media or advertising that is uh does not apply to them. Right. So what happens now is you have um more personalized, intentional um media uh in influencing what they might be purchasing because it actually matters to them and what they might care about. Yep. Um that makes their experience as a member better, yeah. Um, which makes Sam's Club happy. And you're now reaching a member that is um more likely to purchase your product. So I think it actually benefits everyone in a way that it is uh you you can't necessarily do as well in traditional retail. Right. Yeah. So it sounds like like there's a different playbook for Sam's Club than for you know, we'll say Walmart or you know, mass retail uh as well. Um, you know, what are some things like if you're a brand, you're advising a brand, like how to succeed in the club channel. Yeah, what what advice would you give? Yeah. Um we'll stop thinking about it like it's set up to Walmart. Right. Um, I think that's the that's uh an honest, um an honest mistake a lot of them do. Um but not not for anything intentional. It's you, you know, you you think it a lot of ways the same shopper. Um it is, but it's the mindset that is different. And so you have to start thinking about what's the story and the value that you need to to to communicate to that member? There's gonna be a lot different than you would um if they were shopping just at Walmart. And so leaning into that story, I think is really important. This is a savvy shopper. This is a member that is very intentional with their time. Um, so what are you communicating that actually matters to them? So we talk about value a lot at the club. Sure. Um, but what does value mean to to your customer? And so really taking a step back to really understand that. Um, how does this, how does this product make their shopping experience easier? Right. Um you know, pack size is one thing, but you know, leaning in on the quality component. Yeah, quality is so important. Like you know, the the brands I tend to see at Sam's Club are are brands that you know I am aware of. Um I understand that it's brands I'm looking for. Yes. I so I think I think Sam's Club does a really good job of assortment. Yeah. Being it's a limited assortment, but the quality of the assortment seems strong. Intentionally curated for that. So if you are on the that's the other really good point, is if if you're on the shelf, you know, you were you were selected because of the quality of your product. So you have to really um you have to really communicate that because you have you can get pulled and you need to make sure that you're you're communicating the value and and the um the the the value to the to the member. Um otherwise you'll be replaced by someone else. Yeah. So um being really focused and really not being afraid to market. Uh yeah, I think a lot of a lot of brands might think of it as a tack on to their their marketing plan for Walmart and to be really intentional with how you're reaching that shopper. There's a lot more pre-shop, I think, with um with uh a Sam's Club or a club shop uh shopper than you were you would see at a uh at a Walmart shopper. So Walmart, I go every week. I kind of know what I'm buying, yeah. Um, kind of have blinders on. Um, but I'm much more intentional when I'm at Sam or I'm going on my Sam's Club, making my Sam's Club list at least. Yeah, you have maybe not for you because you go every week, but for most of us, we don't go every week. So now there's uh there's more of a lead up before your your Sam's Club uh trip. And so you want to make sure that you're doing a lot more pre-shop exposure to them. So outside of the club, what are they doing when they're at home, um, when they're out, out and about, uh, making sure that your brand comes top of mind and in that club, in that club um mindset. So, you know, how do you communicate this for a big event or just value of you know the product? So if it's bulk or if it's quality or if it's uh a limited time item, you know, yeah. Using that and uh framing that within the um within the mindset of that shopper, I think is really important. So there are three three tactics I see at club, and there could be more, but there's three tactics I see at the club that um love your input on that I think are are key to uh key to the experience. One is ISB, the instant savings booklet. So you can talk a little bit about like what goes into the ISB and how that how that comes about. Yeah, so the instant savings booklet, um it is designed as a as a resource for for brands to communicate value. Uh so there's there's coupons essentially in there or value. Um so it's both uh a mix of things communicated with the merchants and then with uh brands through through Sam's Club. Yeah. So there's advertising in there as well. So you're communicating usually limited time offers um across the entire club. And so it's a really powerful, uh, powerful communication tool. Um, members really love it. Um, it's a physical copy, which I think is so great and powerful. I I think I think that's one of the differentiators for sure, right? Because if it was just an email, and I'm sure there is an email, but if it was just an email, I might miss it. Yeah, but I've got to physically pull this out of the mailbox. And with the mindset that I personally have around Sam's Club, the discovery, you're like, okay, I'm interested. Exactly. Let me see what's on ISB this this month. It is a great tool for discovery. Um, and I think in a world where it has gone completely digital, when uh the right brand or the right retailer leans in on an old school approach like a mailer or a booklet, yep. Um, if done right, like SamsClub does it, it really does resonate and it and it works. You know, brands love being a part of it because they know that they they see strong results. Yeah, one of the strategies that um I had been exposed to in my previous role was you know, doing advertising around the support of the ISB. So if you know a product is going to be an ISB, that you would you know do some advertising or some promotional activity that takes place in coordination with that. Is that something that you is that just a staple of if you're on ISB, you need to run media or is that just a few select brands that do that? Um, I think I think it's table stakes. If you're if you're going to be in the ISB, I think it it is a component to a larger strategy. So I would challenge more of like, well, they have an ISB, we're gonna go do some marketing. It's like, no, it's there's marketing that's promoting the brand, and ISB is there as like another push to help uh close the deal. Has a different different role. It does a different role, right? And so you want to use that tool to not necessarily just um reach your existing shopper and give them uh a discount. You want to find uh ways to bring the new new shoppers in to consider your um consider your product, and this isb is a great tool to to for trial. Yep. There are two other powerful marketing aspects, and they're I mean, I guess they're somewhat related. I see them a little bit differently in the way that they're executed. One is sampling, yeah. Right. So having a person there that is handing out samples, usually food samples, in order to try, right? Yeah, that's a draw into the club. Um and you know, there was I've heard people like, yeah, we go around lunchtime, so we don't have to go in and and go buy, you know, go buy food somewhere, right? So yeah, and go we just go to the club and that's where we eat. Yep. Um guilty. Yeah, yeah. How so you know what role does that play in the in in uh a brand's strategy for club? Yeah, it's it's really important. Um, I think it depending on what your what your brand is. Um I would hesitate to put all of your eggs in the sampling basket, especially if I'm a if I'm a a a newer brand. I can imagine it's very pricey too to put into it to that. Yeah, it is. Now, there's a lot of value into it. Oh, yeah, sure. Um, but I would I would always say like your first dollar should probably go into search. And then as you think about sampling, like it's all part, it's all feeds into each other. Right. And so I want to build awareness of my product. But again, when I'm in the club, there's that discovery element, there's a certain expectation that members have about their experience in the club. And and sampling is a big part of that. And so if you have uh if you're new to the club, it's a great way to get people to try it. Um, if you have a new skew or a new flavor, also really important. Um, but it's not for everyone. Obviously, food makes the most sense, uh, but I I do see a lot of value in it as a a final push, you know. So if I can if I can get that product in your hand, I'm more likely to purchase it than if I saw on the shelf. I just did this a couple weeks ago um with honey. Yeah, they sold me on it. It was a great sample, it was a great taste, it was a great experience uh at the at the sampling art and I purchased it and I felt confident spending the the money on it because I knew it was good. Yeah. Yeah. And so the the third one that I was thinking of is freeosk. Yeah. And you know, that is kind of in a way, it is sampling, right? It is sampling as well, but it's it's I think it covers the gaps that human sampling, yeah. I sound a weird human sampling, but a a person who is administering the sampling at a different kiosk, right? You know, can you talk a little bit about like Friosk and what role it it plays um in the club? Yeah. So friosks are kiosks that are has traditionally they're placed over by the pros and section. Um, there's a screen attached to it, and members can walk by, watch a video, um, they'll scan their card or their their um their phone with their member ID and they'll get a sample. Uh it's a really powerful tool, especially for brands that are not food or not shelf stable or not shell stable foods, um, to get a product in their hands. Um, there's also a really great way of the screen. So there's ads that are running. So again, visual cues to reinforce brand awareness. And you can actually um uh merch your your product uh on the on the uh kiosk as well. So it's really powerful. But the most important piece of that is when you scan, you have that data on the uh on the member. So you need now this member scanned, so they've seen the video, they have they've picked up a product, and you can now use that for retargeting. And so now you have this rich information of this member um and tracking their actual use of this this product. So this is someone you may want to retarget now. And you can track if if um if that club is performing really well on this thing. And so um, it's a really powerful tool. It's another really great use of of sampling and and an arsenal of really great tactics offered by uh Sam Club. And this one other thing I think of with the club too, and it's not necessarily you know brand play per se, but one of the other things I appreciate about the club is the curation of local, um, local goods as well, right? So it's not just all national brands. It seems like they do a really good job of of curating and giving opportunities to you know local uh suppliers as well. My honey came from. Yeah, is it okay? Well, good, good. So, you know, what's the strategy around that? You know, I I can make some assumption, but what is the strategy around having having that as part of the club? Um, again, it goes back to that curated experience. And so wanting to provide the best value for uh for the members. And then Samsco really views itself as the club of the community. And so each community. I like that. Club of the community. Club of the community. And so that shows up in a lot of different ways. So um it's everything from the events that they run uh within those communities, uh, partnerships with with local, with local businesses and things like that. Yeah. Um, and also the products that they serve uh or sell at the club. So uh it's a really exciting way for a small brand like uh an API in in uh Tawny Town to get their foot in the door of a national retailer and and see how they resonate and connect with the consumers. Yeah, yeah. It feels like it gives them opportunity or members to support somebody in their community as well. And it feels like your your dollar is going to something that you know is in some way helping the community. Yeah, absolutely. And and Samsung does a great job of that. So you can see that um across any club. There's going to be uh a a number of unique items to that to that region or or locality. So it's it's do you know how hard it is to get in? I don't know how hard it is. Do you have do you have a product? Uh not yet. Not yet. Uh it's awesome. All right. Well, it's great to talk about the club because you know, as we started this conversation, I think it's a misunderstood channel. Yeah. Probably not a stand a channel that everybody spends a lot of time in from a brand perspective and you know, uh, a focus. I would assume that each club, you know, each club retailer has, you know, their own idios secrecies and how they how they run things. But you know, obviously my exposure has been primarily with Sam's club. So appreciate you uh talking through that. So we're now we're gonna move, it's gonna be like a hard gear shift a little bit here because we're gonna go from club, which you know, which we all love club. Yeah, yeah, again, play the 50 Cent. But we're gonna move to talking about AI and creative. Sure. And so, you know, we touched on this a little bit earlier in the show, talking about the the needs from a creative standpoint, um, when it comes to retail, right? So one of the phrases that I've used many times and I learned at Saatchi was the speed of retail. Yeah. And the speed of retail has continued to accelerate. It has not slowed down since I've gotten into this, into this b business. You know, I I know, you know, where you where you're at, and obviously me similarly, um, you know, we we we work within uh uh within systems that are AI around you know helping brands do that more effectively. Yes. Um, and you know, so love to hear a little bit more about like how you're seeing that come around from your side of of the company that you're at. Um, you know, is is are we seeing AI truly make the creative better? More I I like to I think the words that I think about a lot is fit for purpose. Because uh sometimes, you know, when we think about creative, we have this big grandiose idea of these very elaborate, creative, um, creative surfaces that we are building for, but sometimes you don't really need something especially elaborate, you just need something that gets the job job done. So, you know, how are you seeing you know, from your perspective, the usage of AI to help brands, you know, create um create ads in other formats? Yeah, so it's a great question. Um AI is is a really great tool for for speed, but also maintaining quality. So what I've seen is AI has been really helpful for um taking a really good brief and helping to concept and shape an idea. Um, so we use that as a as a as a means to help accelerate um some initial thoughts and then versioning out everything, I think, is is really where it helps. So for retailers, I think a lot of a lot of them, a lot of brands that are a lot of shopper marketers or or brand teams that are supporting retailers are struggling with um that influx of of we need to create content. What they're getting from their brands just doesn't necessarily match the requirements. And so I think of club especially as a really good example is you want to show your club hack, but national teams aren't building messaging around the club pack. Right. Sure. And so that story can what it doesn't it doesn't apply. It doesn't apply. Yeah, right. Crazy. Um every time I've I've heard that story. And so what uh what AI can help you achieve is to take, take maybe a really good idea and build off of it. And so that's what we do at Genesis X is like we'll take your concept and we can version out what makes sense for your retailer. And each format is now tailored for that, for that deliverable. And so now you're just getting one thing that's resized, you're getting it that's unique to the format and also the the insight or the member behavior at that time. So something that's going to show up on um TikTok, a TikTok eye is gonna be different than what you might see on an ICDS screen or in the CTV ad. Um so being able to do that allows the speed and flexibility that's really hard to do traditionally. Um, and then as you think about versioning, um, using AI to test pressure test against certain concepts or ideas so you can see what's working and what's not. You don't have to fast nearly as much if you were to do that with a traditional production crew. That's not to say we don't need production crews and to issue traditional stuff. I think these are these are ways to uh supplement and uh extend out those really great ideas. And so it's less of a battle between one or the other, and it's like how do you work, put them together uh to get the most value for for the brand and ultimately the consumer? So one of the one of the more challenging things to determine in this space is the human intervention. So yeah, what parts of that creative process do you feel a human should be a part of? And what part of the process do you feel comfortable with an agent, an AI agent of some sort doing on his own? Yes, I I think uh there should be humans across the entire spectrum of it. Um we just you know AI is a tool that can help speed that up. It's a framework to do that. Um but we think about briefs, when we think about taking an insight, um, those those should be should still remain human. Um an idea or a concept for a of a campaign or or something that is that's based on creativity, and creativity needs to come from limb experiences, emotions, empathy, um all of the things. Well, a machine, AI can't do that, right? Right. So still needs to be human-led. Um and then taste and judgment, I think, just becomes more important now than ever. Right. Um, so having a really good idea, understanding what your business solution is, like those things are always going to be human. Um, because at the end of the day, it should be created and led by humans because the final deliverable is for a human. And so in the middle, um, AI is really good at helping to consolidate. It's really good for helping to streamline. Um, but at the end of the day, you still want a person making sure that it's brand safe, that's telling a message that's right, um, and that it's human, you know, that it's it's connecting to it to a human. So that's why those slop ads that you see on YouTube don't really resonate. It's because they're they're not designed for that. Right. Ads for a brand, a large brand that's going to be on the shelf of a Sam's Club or a Walmart, they they can't take those sorts of risks. They have to build something that's of quality because um their reputation is on the line and they sell a product that people have come to expect um to be to be good and true. And so um inserting and making sure humans are a part of that process, I don't I don't think should ever go away. Um agents are are tools to help accelerate that, but they're not placements for um for taste judgment and and right lived experience. Yeah, like sometimes I have conversations with companies that want to do fully dynamic ads where you know technically the ad isn't created until it's needed. And so there's, I mean, there's obviously dynamic creative has always has existed for quite a while, data-driven creative has always existed for a while. So, you know, there are brands, there are brands that say, you know, well, what can you update this in real time? So, you know, let's just say there's an admin that's running and there's some sort of signal, and there's some aspect of it that without even a human in involved in at all, like, you know, just you know, the whole thing is programmed to operate in a certain way. What is your perspective on on that side, that side of or that style of of creative? I I think the dynamic aspect could vary quite a bit, right? It could be anything from yes, color that's probably on the lowest end of the spectrum to message, yeah, to the structure of the ad. Um you know, uh, because everybody is unique in their own way, right? And so if you're trying to speak to somebody, there may be some type of data insight that may allow for a communication to be more amenable to to someone and maybe drive more action or at least whatever the immediate objective happens to be. Yeah. Um, I I think it's a really interesting component to it. Uh I'm not scared of that. I think it's I think it's a natural progression in AI. And I think with the right models, um, you know, I think it, I think it works again, kind of going back to like that A-B testing, like it's a great way to kind of learn is this the right direction or not. Right. Um, but dynamic, but dynamic uh deliverables like that are like you said, they're not they're not new. Um, so I think AI is just a natural progression of improving upon it. Yeah, it doesn't bother me. What about disclosure? So we kind of hit on this a little bit about distrust on on AI uh creative um earlier uh in the quick hits portion of the show. You know, what are your thoughts on disclosure? It doesn't seem like there's a lot of disclosure that takes place on stuff that is clearly AI generated for advertising purposes. I don't even believe that the the uh mechanisms for advertising really allow for that. I know sometimes when you you put a if you do an AI generated image on LinkedIn, there's a little tag that it'll put on the on the image, but it doesn't seem like there's other solutions out there, unless you know of any, that really make sure that the person seeing the ad understands that AI was used and the creation of it. I don't know of any tools that that are commonplace that will identify that. Yeah, I'm sure, I'm sure there are some. Um we have run ads with larger, uh, large brands, and we have put those disclaimers on there. Um so I think right now, as far as I'm aware, there is no there's no rule of disclosing or not disclosing. But I think for a brand, especially a brand like that that is very large, to want to um to disclose that, I think is is a safe bet in this world where there's people who are a little bit unsure of uh of what AI is. And I think once you see like that example, uh it's it's really well produced, it's really well, well made. Um, it makes you say, Oh, that's AI. Okay. Like that, that's that's good. That's great. And so um, I think it's a great, a great way to ease people into this new future of of marketing and and advertising and how creative can creative using AI can be implemented where it feels uh not so scary. Yeah. Yeah. Yeah. You know, I think there is a certain amount of disclosure, I think, sometimes is is needed, and I think it's gonna be on a case by case by case basis. Um unless that's the ad is really to say, look, they're not photoshopped. Well, yeah, yeah, yeah, yeah, for sure. So maybe, maybe, maybe that isn't anything that we're gonna need to worry about in the future. I don't know. Everything's moving so fast. Um, I don't know the answer to that. It's very possible that um we won't think about it. Yeah, it's just another another day. Um, or you know, it'll be a requirement. Uh, I'm not sure. So, where do you see this going? Where do you see AI creative development going for advertising? Like, where what what do you what do you see in the future? I do think there's more adoption coming. Uh what what's happening now is there, as you said, like there's there's a constant need for content. Their budgets are getting smaller, um, expectations are getting higher. And as you look at like retailer-specific media, especially, like there's just so much being asked of marketers these days. And so let's take a really good big idea from a national level, and then how do we use that appropriately and and quickly to to resize, to reformat, to repurpose in creative ways? AI is gonna be able to accelerate that. Yep. So I think we're in this, we're in this uh interesting phase right now where there are people who are very early adopters, they're very excited by it, they see the future. And you have some people who are unsure, and I think, you know, understandably they're they're scared of what that means for their role and their position. Um, and there are some others who too will never want to adopt it in any way, shape, or form. For sure. So um the the those in the middle, those that are curious, that are, you know, have some trepidation, I think those are the ones that are gonna be coming around to it uh slowly, but I think surely, as they see that um there's still such a human element to it, and you still need people who understand the business, who understand what marketing is, what taste looks like. Yep. Um you just have to be ready to embrace what the what the tools are and and find the way to make them work for you. Yeah. I mean, my saying is you'll know AI has made it when we don't talk about AI anymore. Right. And it's just part of everything we use. And it will be uh soon enough, I'm sure. Awesome. Yeah. Well, I appreciate your your insights on the club and on AI and uh retail creative. So with that, we're gonna move on to our final segment, which is bold vibes. Let's do it. You ready for this? So I'm gonna throw out some statements. Okay. And you give me your gut reaction. Sure. All right. So, first one club is the most misunderstood channels in retail. Absolutely. I also think it's the most interesting of channels, too. A lot of potential there. Most brands are underinvesting in club specific strategy. Yes. You should be thinking about the club at and what makes it the club unique and what that member is. And you should be telling stories specifically for them, not repurposing other retailer stories for that channel. Awesome. Sampling is a form of retail media, even if we do not call it that. Yes, absolutely. Um, retail media is media and information trying to convince a uh a consumer to try your product. That's that to me is part of the marketing piece. And that very much sits within the retail media landscape and an offering that any retail media network should should have in their uh disposal. Great. Um a bigger pack is not a club strategy. Um yes, not a club strategy. Not just that alone is not a club strategy. There you go. That's that's even better. AI is better at making more creative than making better creative. Uh depends on the creative the people who are using the tools. Oh, very well, very good. Very, very good. The real AI risk is not replacing creatives, it's flooding the market with average creative. That's the biggest risk. I think the biggest risk is bad creative. Um yeah, I think it's it's using the tool. Uh, if it's not helping, it's making noise. And so you have to be intentional with how you're using it. More doesn't mean better. More needs to be done more smart, smartly. Smart. Yeah. Smarter. Yeah. Smarter. There you go. It has to be smarter. And so AI, when used by the right people in the right way, will create more content better. If you're using it the wrong way, you're going to create a lot of noise, but you're just going to create a lot of junk out there. Okay. Consumers do not hate AI generated marketing. They hate marketing that feels fake. Yes, they do. Yes, they do. All right. And then the last one human taste will become more valuable as AI generated content becomes more common. Yes, I see that every day. Okay. Yes. Awesome. Great. Awesome. Well, thank you for playing bold vibes. Thank you, Brian. Appreciate that. That was good. Uh, very good. All right. All right, y'all. It's time to wrap up this episode of Retail Media Vibes. TJ, thank you so much for joining me today. Thank you. Um, before we get out of here, is there anything that you want to share or plug? Yes. If you are um if you support the club channel anyway or any retailer, I'd love to meet you. Um, my company Genesis X is uh here to help uh streamline your creative process. So let's chat. Awesome. Um and would you come back and be on the show again? I would love to come back, would if you would have me. Okay. All right. Well, we'll see. All right, everyone. Thank you for watching and listening. Retail Media Vibes. If you've enjoyed the episode, please be sure, be sure to share it. Um, anybody that's missing out on the old Pizza Hut, make sure you share it with them and um those Pizza Hut red cups. Uh, so to check out all of the episodes of Retail Media Vibes, you can go to retailmedia vibes.com. Thank you all. And as always, I'll be sure to do better next time. B V outfit.