In this episode:

Wendy Liebmann talks to Diana Melencio, partner at XRC Ventures, an investor in the early-stage intersection of consumer behavior and technology, and its investment approach in the health, beauty, and technology sectors.

They discuss:

  • How XRC finds opportunities (one way: scraping the web)
  • The touchpoints of the consumer journey that have become so critical in understanding opportunities
  • The challenges of growth when physical retail is shrinking, where stores will become showrooms, and DTC profitability is a challenge
  • Retailers who win are those at the forefront of testing new things in growth marketing and performance marketing
  • How AI is a must for accelerating growth opportunities
  • How Retail Media is fast becoming the profit center for many retailer
  • The concern for brands in the middle and their potential race to the bottom

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Watch the video episode:

Wendy 00:09

hello, everyone. I'm Wendy Liebmann, CEO and chief shopper at WSL Strategic Retail, and this is Future Shop. This is where I talk to iconoclast, to disruptors, to innovators, about the future of retail. Today, my guest is Diana Melencio. She is the partner par excellence at an extraordinary she's laughing already at an extraordinary organization, which some of you may know, and some of you may not yet, called XRC Ventures. And XRC Ventures that does a lot of investment work in the health, beauty, tech space, retail space, so very close to our hearts at WSL, so welcome Diana

Diana 00:53

Thank you so much for having me. Wendy, I've been really looking forward to this conversation. Yeah, you

Wendy 00:57

before we begin, just want to remind you, do us all a favor at WSL Strategic Retail, and just click Subscribe, doesn't cost you anything. It just shows us you're listening where you are, we can use that as a way to prove to ourselves that you are out there. I'm not talking to myself all the time. And also it's a great way, if you want to have a conversation with us, drop in a comment, whether wherever you get your podcasts, whether it's on Google or Spotify or our website or anywhere else, just click subscribe, and then we'll know you're there. Thanks for that. And now let's get on to my conversation of the day.

Wendy 01:33

I think I was first introduced to the organization through Steve Sadove, for those of you who don't know him, was ran Saks Fifth Avenue, came out of Clairol, Citi, and is now an advisor to MasterCard, but very involved. And he's the one who said to me, you've got to know this company, Diana, you know, just but, but for those who don't know the organization, tell, tell us a bit about the company, and tell us a bit about what you do and your background, that'd be great.

Diana 02:02

Yeah. So I'll start with with XRC. So XRC stands for Accelerate Retail and Consumer. We're an early stage fund based out of New York and Los Angeles, and we really focus on investing at the early stage intersection of consumer behavior and advancement in technology. And what that means is, not only do we invest in the products themselves, like Naked Sundays is a great example, but we also invest in the technologies that help get that end product to the consumer. So supply chain logistics help the consumer transact. So commerce enablement, payments, new retail platforms, new retail channels, help get that end product, gain awareness from consumers, so marketing technologies, and then as of the past few years, as the sort of health care has shifted, really, from the doctors offices into our homes, which was accelerated by COVID, We were spending more and more time also investing across the consumerization of healthcare The first 10 years of my career was in more traditional finance, primarily buy side funds, before starting my own company in supply chain, which was invested by XRC. And how I got to know Pano Anthos, the founding partner and at XRC, I run primarily focus on the consumer practice, consumer packaged goods, but I also sit on the Investment Committee of the technology fund. Yeah,

Wendy 03:32

It just feels, I must say, having listened to you and worked with you on board, I've really learned a tremendous amount, but I you don't know this, but I in a in a recent presentation I did actually in Las Vegas yesterday, I quote, and I'm going to turn around and pull it off the wall. There is an XRC quote that I just love. Hold on. I'm Hold on, everyone. I'm coming back on my other thing. I'm still coming back, and I will read it “to thrive in the years to come the future retailer or brand will need to adapt to operate in a world where every point of human contact is a commerce channel. Doing so will necessitate a complete rebuild of core business models and enablement of the tech stack of most brands and retailers” and so I used that quote and quoted correctly yesterday in a presentation for an organization. And it it feels so timely and relevant, as we think about innovation for the future, that every point of human contact, it's that journey. All the touch points of the journey become so critical in this process. Done. I mean, we're seeing we're seeing

Diana 04:43

we're seeing, we're seeing that now, right, right. There's QR codes on packages. There's you enter, you know, we envision a future, future where you enter a hotel and the screen is selling something relevant to.

Wendy 05:01

To enhancing the experience of that hotel stay as an example, right? It's really commerce everywhere.

You've seen a lot of change in the last, yes, four or five years, pre COVID, during COVID. Now, what are the what are the biggest changes you're seeing?

Diana 05:18

in terms of, like, rapid change in, call it the last 12 months. It's really largely around leveraging AI in, in everything right from personalized communications to product recommendations, which honestly we saw back in 2015 to product development to generation, generating creative assets like put together a picture of me putting or of a American, Asian woman putting on Naked Sundays sunscreen. And there are tools now that will create some better than others will create that image for you. And we've invested. We've invested against that. We've got an AI content generation company called Go Charlie, which does exactly that, like give me an image of someone looking in a mirror with a red light therapy wand, and it's still, it's, it's continuously improving, but those are some of the things that we've been seeing and investing against now since 2016 Yeah,

Wendy 06:37

Yeah. I mean, The AI conversation on a regular guest on on this podcast is Justin Honaman from Amazon Web Service, and we talk a lot about, you know, the evolution of AI. And I said to him the other day when he was on, I just feel like, at least for my awareness, the practicalities of it have become so much more evident of late. And I mean, you see it because you're looking as early investors into new things that are emerging, but even in just the broader landscape, we he and I talked about the fact that, you know, Walmart talked about saving 4 million programming hours or something, and some of their work, and you see people in the stores looking on their phone, not just what's the price, but also what's right for me, while I'm in the aisle, things like that. Yes, I really find that now so grounded in it's here. Well, it's always been here, right? I mean, not always, but AI has been around for a long time. But this speed to which AI is now transforming businesses big and small, seems to be such an important characteristic of growth heading forward. So when you look at companies now, you and I keep talking about Naked Sundays. For those of you who know, full disclosure, we are both on the board of this Australian company, wonderful company in the sun skin care world, founded by the fabulous Sam Brett. And as we think about, as you think about new companies to invest in, how much of that AI component do you either need to bring, or do they need to bring for you to look at a business, not Naked Sundays, but anything else to say, yes, we want to put our money there, or we can help them grow by putting our money there is that become a major criteria for you. When you think about investment, I would say yes, because

Diana 08:27

I would say yes, because AI has become ubiquitous enough that everyday people use it. My mother-in -law writes the newsletter for her HOA, I won't tell you her name, so that people, her neighbors, will continue to believe that she writes all of the newsletters, but she uses chatGPT to do that, and it's as simple as I'm building an AI script now to have all of my calendar invites include like the my last few interactions with that person, and what the topic of the conversation is. So it's not as complicated as, you know, learning languages, but it's really just everyday people using things. There's this great, I think, like a better Google called perplexity.ai, and you could literally ask it questions, like, I'm going through perimenopause, what product should I be using out there? Or I'm at Target, or I'm at Bristol Farms, you know, what are the best magnesium supplements out there? And it will give you a very, very detailed analysis of of these answers, citing sources in terms of investment. I'll I'll tell you a little bit of some of the things we're doing to source consumer packaged goods. So we have actually built an AI tool to scrape the World Wide Web in categories that we're highly interested in. So we're interested in sun care. We're interested in you. Eczema, pet supplements, a variety of consumer product categories, and we're able to surface 60 to 70,000 deals every single every single month. Sort it by monthly visitors or revenue. WillWe will always get the revenue part right where, well, we're ballparking it based on data, but that is the first step of our sourcing process. It's no longer founders coming inbound to us like, Hey, I'm fundraising. We're very thematic investors. We talked to a lot of CPG executives in in at large, strategics, publicly traded companies. So we sort of take our AI tool as one part of the Venn diagram, the other part is strategics, telling us we want to acquire in these categories, and then from there, we sort of like hunt at the intersection of those two of that Venn diagram. So that's from the sourcing perspective, when we look at technology or even the operational processes of these consumer brands, we're constantly looking for, okay, that that onboarding process feels manual. What can we do? Where is it on the roadmap to how we can automate that and generate greater scale like as an example, we something that we saw in our data was that when customers DM direct message brands on social media, they have high intent to purchase, whether that's a Direct Message to the brand or in the comment section. And so we found a company called Nectar Social that learns the voice of the brand and replies. You can press it at scale, or you can press it as a as an assistant, or you review the comments that they're suggesting, or products that they're recommending, and does that personalized communication at scale. And so it's, literally, what are you doing manually? How can we scale it and add value for the customers as well? Using, using AI, I think, I think you it's like, it's, it's imperative, yeah, yeah, to use it to grow quickly in today's environment.

Wendy 12:22

Yeah, it's so interesting, You say that because I remember doing some work for a private equity firm, oh, I don't know, for it sounds like 1000 years ago in tech terms, and they asked us to do some due diligence for them, both with retailers and looking at category and looking at our shopper sentiment work to just give them some, you know, context for where things were, and, and, and I remember it was so manual in the day. That was so manual, and the ability now to use technology, to use AI in whatever form, to begin that process, and all of this, are there some industries that you see are doing a better job of incorporating technology than others or…

Diana 13:06

I would say within we're specialists. So within the sort of like sub sectors that we invest, supply chain has probably seen the most invest, investment and the most advancement and every part of the sort of supply chain is getting disrupted now, I would say grocers are doing a better job than retailers, which are often the last people on the innovation chain, and then, like emerging brands, are also at the forefront for testing new things, particularly when it comes to growth marketing, performance marketing. I think a lot of the CPG companies are not only acquiring those companies for in organic growth, but also for digital capabilities. That,

Wendy 13:56

That, to me, is really interesting watching some of the really big CPG brands in the, for example, beauty space. I like a L'Oreal who realized they needed to really up their digital game in every aspect of their business and and invested very heavily. I'm sure there are many others, but that one struck me because it was a, it was a very concerted effort to say we need to be thinking about technology and digital in every in every aspect of our business, from innovation to how we communicate with our shoppers, retailers, all of the above, you made the distinction between grocery and retail. What did you How do you distinguish that? What does that mean? Oh,

Diana 14:39

Oh, like for for example, let's take one piece of it, which is the adoption of retail media networks. So just to break that down, a retail media network is is really any owned property that a retailer owns, so whether that's their newsletter. Coupons, their website, on cart, in store, displays. They it's one of the fastest growing revenue lines for for grocers, and it's because they have so much data on which brands are doing well, what categories and so now they're selling those that real estate in their retail media network to the brands that they they have in store. It's absolutely brilliant, and grocers are at the forefront of that versus retailers. And I guess that's the difference between like, CPG, FNB, consumer, package goods, food and beverage, versus apparel and accessories and consumer durables, yeah, yeah.

Wendy 15:50

Now that's that's helpful, because we would lump those all into retail and but, but absolutely right, everywhere you go, retailers, especially grocery retailers, but lots of others in that. CPG, fast moving consumable space are really doing so much work.

Diana 16:06

Yeah, I think it also depends. I would say, like the one, some innovation I've seen from I guess it's more of a brand. Was as a Uniqlo, for example. Have you been to the new the New York store, where you drop I know the bag

Wendy 16:22

stunning, right? They drop your stuff…

Diana 16:24

stuff into a bag right before you exit. And they, they just, they pull it up so companies like Fast Retailing, who owns Uniqlo, Helmet Lang and Theory, yeah, are doing a lot of experimentation on on the technology side,

Wendy 16:43

yeah, and if you haven't, listeners, viewers, haven't gone to a Uniqlo store and seen that, you literally take a mixture. It could be your T shirts, could be your undershirts, it could be a sweatpants, whatever it is, in a bundle, and you literally drop them in what looks like a bucket right next to the checkout. That's part of the checkout, and all of a sudden it lists, it reads everything, and it's there. So it's not somebody scanning it, not somebody taking off the label, things that you know, they forget to, I mean, it, it's amazing. And you think, how do they know this way better than, you know, sort of weighing the groceries, and did I get all the groceries right in the self scan at the supermarket? Quite extraordinary. So when you look at that, and then you think about the labor, the correct information or things, it really is stunning, already in our everyday lives, right, all of that, yeah,

Wendy 22:31

yeah. And I you just made me think about, on the one hand, we've got drugstores that, sadly, having to lock up so much merchandise, so then having to create an app that helps you open the unlock the locked door to get into something, and there's Uniglo dropping it all in a bin and saving all that time for figuring it all out. And then you can just put it in your bag and go, kind of things.So when you think about retail, where do you think beyond grocery. Beyond grocers, are there other and Uniqlo ?Are there other types of retailers who are exciting for you in terms of either investment potential or for the brands you invest in when you look at a sort of a distribution strategy, how do you how do you think about that? How do you evaluate that when you're ready to put your money in?

Diana 18:24

I'll answer it two ways. So the first is that if you're a CPG company, you have to go into retail. People want to touch and see the product. And frankly, because of the iOS 14 changes and the rising prices at Meta in particular, it is, is a very challenging to be profitable in DTC and so nearly from from early stage growth to acquisition, it's now Become an imperative for consumer brands to, firstly, like, start thinking about retail in their product in their product roadmap, because there's just there. It's just more sustainable growth, particularly in like, beauty and personal care. I mean, FNB distribution is everything. So I'll put it that way, in terms of retailers and like what we look for from an investment perspective, I would say that we Okay. I'll answer it three ways. I would say that there are, we have publicly traded retailers that are investors in our fund. The largest global mall operators are investors in in our fund, and we do leverage their insights to understand what are some near term pain points? Because unless it's near term, they're going to punt it. So what are like near term pain points in terms of what you're solving for on the technology side? So we use retailers for diligence. From an. Investment perspective, I don't know that. I would say that it's very challenging to invest in a retailer or like a marketplace, there's demand and supply challenges. Once a brand does find success, they'll immediately want to diversify their distribution, we partner with large public retailers, and then retail as a channel for CPG is a mandate if you are pursuing institutional capital. Yeah,

Wendy 20:34

yeah. One of the things that strikes me, particularly in this country where growth for CPG brands, but not only has been very much, I've always called it a real estate play. I mean retail, okay, we want to grow. We're opening more stores and more stores and more stores and more stores. And clearly that's not the solution anymore. So when I'm a brand, and I think about now, where do I go? Where do I grow? And how much can I grow in the shrinking, physical retail space that becomes, in some ways more of a challenge, I think. And do you see it that way or not, really? Yeah, I think, I think

Diana 21:18

think. I think retail is really become a showroom, especially for certain categories, because most people shop with their phones, if they have the time to do cost cost comparison. It's a little different at grocery, because you're shopping for near term needs, so for longer term, larger investments. You're really looking at a showroom model versus, for example, the the discount retailers who are driving deals and newness every every week. And it's actually a really great channel, also for brands to offload, maybe some like low performing, low performing goods. So, so yes, I think it still has a place people want to touch and see and taste and try on goods that they want to purchase, test out, beds, etc. But I think the transaction more and more, unless you're incentivizing them with promotion or service in store. I think it will, it will the retail, the physical rotations will play a more as a discovery branding tool. And even for CPG, they'll do, you know, they'll do replen on, on Amazon, yeah, yeah.

Wendy 22:40

yeah. It is. It is so interesting. You remind me of a conversation again on this, on Future Shop, I had good friend Norm de Greve, who was the CMO at CVS drugstores, and is now the global CMO of General Motors. But one of the things Norm talked about, we talked about, you know, the day when you go to the showroom to get your car, and you talk to the salesman, and you get all the information there, and now how that journey, that shopping journey, has changed so much that people do so much homework before they go, pricing features, all of the above, and really it's only at the very end, When they've made their choices, often already made their brand choice, that they go into the showroom to sit, to smell the leather, to see how comfortable the seats are. Does it fit the golf because somebody said to me, three sets of golf clubs or something? Why anybody would want three sets of don't go there. I don't know each to their own, but whatever it is. And so even in, you know, industries like that, he's talked about, you know, how do you think about the quality, then, of that showroom experience? Much more about this immersive last, last step in the process to close the deal, rather than that beginning step of, what am I? What's my considerations? We see, obviously, in lots of our work, that, you know, people, to your point, still want to go and touch and feel the goods. And younger shoppers, especially you know, who've not grown up that way, see it as actually quite exciting. So, but

Diana 30:24:11

yeah, I, I was, I had a dinner with a very successful founder of a brand and an agency, I don't know if like, trading down is the right word, but they'll find maybe, like, the Prada skirt that they want, and they'll see if it's available on Re-SEE, which is a reseller based out of Paris, or the RealReal, like, there it's your price comparing designer goods. So, so, yes, I think you have to find a compelling reason for people to go into the store. Yeah,

Wendy 24:48

yeah. I mean, and in that instance, the brand could be so well known, so the ability to use media, and all the new forms of media to build, continue to build that awareness. But once it's done, do I have to have the, you know, hot off the presses, or could I go to a resale consignment? Whatever? I think they're some of the things that we we that have moved very fast. We assume people with lots of money, will spend lots of money, and we actually know part of the reason they have lots of money is because they're smart about how they spend it. So anyway, you know, we're a moment now, obviously, with what feels like tremendous financial turmoil in this country. And so how are you seeing all that discussion, whether it's about tariffs, whether it's about inflation, I mean, all of those things. How does that impact how you're advising your companies and considering new investments.

Diana 25:43

I will take the investment perspective question first, and then I'll go into tariffs. I would say there's a bifurcation in the in I I'm not the only one that investors are looking at in terms of price, so you're looking at prestige, so you have enough margin because you're selling less, or you're looking at at mass. A great example in beauty is, is, you know, Bubble on the mass side, pursuing in your home country of Australia, Kohl's versus Mecca, right? Or, and in this country, Walmart versus Ulta, and, and, and and Sephora. And then you're seeing other brands, which I won't name, you know, charging almost $400 for a perfume bottle, and that is doing well enough, particularly on the profitability side, because they've got 90 plus percent margin. So I would say on the investment side, you are trying to figure out how to maximize margin that's both in the channels that you're operating, but also in your contribution margin. So for for something that like Bumble, you need volume, you need mass adoption, which it has successfully done, it is an incredible company and doing really well. We are not investors. And I think some of the brands that are in the middle, and not necessarily, and I'm just talking from like the brand side, even, frankly, like the store side, and not really seeing a differentiation, just competing on price. Yeah, it's almost like a race, a race to the bottom. So how, how are you even, like, the middle market retailers? How are you differentiating yourself? Yeah, on the tariff side. Um, so, to to get scale, to have, like, an outsized venture return, and, yeah, I'm sort of like centering it on like, CPG, you it's it is that is determined in the United States, like the sales are determined in the United States. And I think a lot of American companies and other companies, I try to pursue channels like APAC, very difficult, even despite its size, or Europe, which is, I think, brand establishing, but does not have scale and has a lot of geography complexity, just from a regulatory language standpoint. So because we are focused on venture scale, and predominantly you achieve that by penetrating the American market we’ve seen like less impact on the tariff side, though, it is a conversation that we're having in nearly every board meeting that I've been in over the course of the last three quarters. So it's something that everyone is monitoring and starting to diversify from a like, a sourcing, a sourcing standpoint, even if the impact is, say, low single digits on the margin side, they're already actively talking to suppliers, local suppliers. Now, just in case the tariffs start to to Yeah, have have broader reach.

Wendy 29:40

Yeah, it's, it's been interesting in, in work we've been doing of late. Again, shopper sentiment work, even though there's this sense of, I guess it's the uncertainty, right? But that whole conversation from a shopper perspective, of being increasingly cautious, starting to say, mm. Hmm, I don't know. I'll, if I got money, I'm going to wait a little bit. The market doesn't make me comfortable. Or if I, you know, if I'm just a regular mate, right? Well, I What will I do? Will I trade down? Will I use up what I got? Will I wait for that big purchase, all of that? Or will I buy a car fast before I need new parts that are coming in from somewhere else? So lots of those considerations around that, and that uncertainty about so much, obviously, is of the of the economy is driven by consumer spending. So that just nervousness and will people have the patience, not that they've got any options to wait. So thinking about a lot of those things, are the things that we're looking at quite closely. Do you see white spaces that may be without giving away the secret sauce that we haven't talked about yet, that you're keeping an eye on, anything that lowers

Diana 30:50

health care costs? We are actively looking at whether it and whether it's democratizing radiology, which is one of the highest spend areas, not only in in healthcare, but actually for for employers. So we made an investment in a company called one imaging as basically like a marketplace. It is a commoditized service, but depending on where you go, you get one scan that costs $200 same exact scan, right? $3,000 and if you implement that with a large enterprise that you're employing, you know, 20,000+employees in in the Us, that's a that's a single digit impact to your your EBITDA margin, immediately, immediately. And so there's things like that on the healthcare side that impacts retailers, in particular, because they're one of the largest employers. We've deployed a lot of capital in some of the categories that we already talked about, retail, media, networks, AI and machine learning was part of Fund One. I will say that everybody, including the consumer, is focused on, like, true efficacy, yeah, um, and so, how can you actually, how can you build products with that, or invest in companies with that, with that DNA, versus product marketing-oriented consumer brands or retail positioning?

Wendy 32:31

Yeah, yeah, it does feel I saw today that Pepsi bought Poppi, yes, yes. And so, you know, so interesting. I was wondering who was going to buy it, right? Do you see any of the big CPG companies who have created an internal innovation model in whatever form, whether it's product, whether it's marketing, supply chain, I guess I would say all of those areas. That's that companies that as opposed to acquiring it, do you see that there are companies that have that we're going to invest in doing it ourselves, or is it now a mixture of, always both? Or some companies say we can't do it fast enough or efficiently enough, we're going to buy it. So what? Where does that fall on the spectrum of companies that you look at,

Diana 33:20

or that we that we work with, I would say that most companies are have become self aware that they're not strong on innovation or brand creation, And that's simply the bureaucracy, the decision making process, internally,

Diana 42:38

My experience being privy to some proprietary brand building at some of these CPGs is it takes them two years to if they had an idea they identified a white space. Firstly, they have to identify the white space. There's work that needs to happen, but let's just say they did all the work, or Bain did all the work, or BCG did the work, or McKinsey did the work. They identified a white space, and now they want to pursue it. It probably takes at least two years to get to market. Yeah. So, for example, I know of a couple of incubations that took, like, several years, small tests, stopped it, like, stopped it, versus starting a brand. Now, we're not investors in this, in this either, but there's a company called Gorgie, and I spoke on a panel with the founder at Expo West, and the first thing she did was she asked her friends and family to send a form out, like a customer questionnaire out, not for them to fill it out, but for their friends and family to fill out, like, I'm trying to build this better for you. Um. Um, I think at the time, it was a supplement, but now it's morphed into a beverage. What form would you like to see it in? What are sort of the ingredients or minerals or vitamins that you that you would want? What are the flavor profiles? Where would you buy it? How much would you pay for it? And this is in contrast to some executives I know that I've started, left very large brands and started their own brand and ran, you know, focus groups just on the name. So it's, it's a very they go so much faster. She launched within, like, a few months. I. So I haven't seen too many successful incubations internally. But I don't believe internally there's the right independence, there's the right autonomy on P&L and testing to, you know, break things go fast, which is what you need to do if you're trying to, you know, if you're trying to take advantage of trends that you're seeing right now. Yeah, yeah,

Wendy 36:14

no, that's, that's always the thing that's so that strikes me these days, that, you know, the the iterative process. And I guess the risk, if you're a big public company, you know, of that, but the speed at which, you know, it's like, let's put on a show. I've got a great idea, you know, who do I trust? Friends and strangers, friends and family. You know, ask the question, and, you know, begin to build and move and learn and iterate and all of that. So it is extraordinary times, and you sit right on the edge of it, because you are looking at, what did you say? 60,000 things, you're scraping 60

Diana 36:51

to 70,000 brands on a monthly basis, just on brands on the technology side, we're probably reviewing, I don't know, around 50 to 80 a month,37:03. So as my as my last question, because this has been not only very grounding, but also inspiring to think about how we all have to think about doing business these days. Your favorite place to shop? You know, you're a mother of a young one. I

Diana 37:19

I I shop direct to, direct to the brands, because I see so many of them. Um, I'm, I, I'm, I'm a fan of the brands that I've invested in. So Naked Sundays is, is definitely like, high on my list, and wearing them today. I wear them every day.

37:34? It's,. Sorry37:39But from from a from a fashion perspective, and I think I could say this, because I'm not invested in anything like it was interesting last night, because these, like the the founder that I had dinner with, had an exit to a very well known CPG company, so she's doing really well. House in Beverly Hills. And she and we were talking about, where do we, where do we want to shop? And I don't think we're not like we didn't say Saks. We didn't say sorry Steve, we didn't say Barneys, because that's gone away. And I was a big Barney shopper when I lived in New York a few years ago. we shop at, like, the RealReal and Re-SEE. I love Re-SEE. It's super well curated. I'm a big fan of the RealReal real, I guess those are the most relevant ones. I mean, on the grocery side, I buy all my staples at Whole Foods, because Amazon has all my information, and they remind me when they think I've run out of stuff. And for things like, like milk, because I have a toddler, right? I probably buy, I like cartons, gallons and gallons of milk every single week. And there's other, like, snack things that I purchase. And then for sort of, like, when I go in in person, I'm an Erewhon member.

Wendy 39:05

Say, I knew you had to go to Erewhon.

Diana 49:39:08

Hello, very close to one. And so I, I walk there, yeah, and it's just a very relaxing and honestly, everything is good there. Everything is high, high ingredient quality, their act, their buyers, for their their CPG categories are actually very good. I'm surprised at how many of the companies that show up on my screen are showing up on shelves at Erewhon I should probably try to get a hold of them and figure out how they're seeing how they're seeing brands, how

Wendy 39:38

they're doing. Yeah, and you'll buy this $16 smoothie because you'll feel good after you've had it, or whatever, that it

Diana 39:44

it it is delicious, like, I don't know how they made liver in a smoothie tastes delicious, but it's,

Wendy 39:51

it's, actually is, and it's good for you, right?? It's amazing how we can all be very theoretical, practical, financially driven. And then. When we talk about shopping, it's the best, you know, we talk about our our passion and so much, so much we learn from each other. I was

Diana 40:07

in Miami recently, I just the Curio at the Faena Bazaar. They're very well done. It's very expensive, and it's a very Miami, colorful resorty look, but it very much reflects, like the clientele, it reflects the environment. Yeah, yeah. But it was very well. I haven't been in a shop like that since, like Colette in Paris existed.

Wendy 40:33

This was terrific. I knew it would be because you have such a unique and compelling perspective on this world and where we're headed, So I wish you well in these turbulent financial times, I think there's opportunity in all of this, if we are optimistic and look for it. So thank you, Diana, as always, and no doubt I'll see you across a board screen.

Diana

Yes, Thank you, Wendy. Cheers. Bye.

Wendy

There's almost no reason to summarize what Diana was talking about today. She was so clear about this. You know, where to think about, or where they as an organization that invests in in companies and really accelerates their growth, how they think about, where are the opportunities? I mean, scraping the internet, scraping the world, to look for emerging companies in their categories of expertise, recognition that big companies today are not fast enough, are not agile enough, are not financially willing enough to take the risk to innovate quickly. also seriously thinking about the role of AI. You've heard us talk about it with Justin Honaman, most recently, the role that has in terms of accelerating growth, whether it's behind the scenes in supply chain, whether it's efficiency in marketing, in so many ways today that makes companies, especially small companies, more efficient, but really big companies, and the dollar signs there. So Diana gave us a very concise roadmap of how a company like XRC really looks to invest in the criteria for all of that in this new, fast changing world. And she, like the rest of us, will keep our eye on the impact of the financial turmoil we are all trying to figure out, including the T word tariffs. Speaking of the future of retail, I will leave us all with that thought and see you in the future. Cheers for now. Bye.

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