Target Gets Pummeled, F150 Lightning Real-World, Apple Doing Its Thing Again

August 18, 2022
On this glorious Thursday we’re covering the continued retail drama as Target reports major Q2 Losses. We also cover a very real-world F-150 Lightning review, as well as Apple’s next big thing.
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Target’s profit down 90% in Q2 citing major discounting and inflation affected shoppers

  • The environment for Target and similar retailers remains "challenging," CEO Brian Cornell told investors, but he said they are seeing "an encouraging start to the back-to-school" shopping season
  • After 7 straight quarters of growth the last two have been rough. Cornell assured investors by saying "The high-level story is: The vast majority of the financial impact of these inventory actions is now behind us."
  • Target has been hit harder than Walmart since their customers rely on them for more discretionary purchases
  • Take away: Another indicator and validator of the current consumer retail mindset



A non-auto industry writer’s take on the new E150 is a mixed bag of candid commentary

  • Nilay Patel, Co-Founder of tech publication The Verge recently reviewed the new E150 and it is a very entertaining read that gives a good feel for what an EV truck owner might experience. He even took it to the dump
  • Highlights: comfort, speed, handling, self driving, front storage
  • Lowlights: very slow and confusing interface and os, charging station woes, range inconsistency
  • “The result is that the software experience of the Lightning often feels trapped in the past, with no clear path to the future because Ford’s real software efforts lie elsewhere. The instrument cluster features the same cryptic icons and fundamental menu layout Ford has used in its cars forever. That huge portrait infotainment screen is woefully underutilized and the menu layout can feel like a randomly generated maze with no destination.”
  • Note: Ford is working with Google to launch an Android powered OS sometime next year
  • Take away: For real, read this article, it will help you empathize and understand the potential CX with EVs


Bloomberg reports that Apple Inc. is aiming to hold a launch event on Sept. 7 to unveil the iPhone 14 line, according to people with knowledge of the matter,

  • New phone, Macs, high and low end iPads, as well as a new rugged Apple Watch are expected
  • Typically the announced new products are available for purchase about a week later and this looks to be the trend as Apple employees have been instructed to be ready for a launch the week of Sept 16th
  • The most significant iPhone 14 Pro changes will be to the camera system, which will appear slightly larger to consumers. The Pro models will gain a 48-megapixel wide-angle camera alongside 12-megapixel ultrawide and telephoto sensors. Apple is also planning improvements to video recording and battery life.

SPEAKERS

Kyle Mountsier, Paul Daly


Paul Daly  00:28

Welcome to Thursday, I'm wearing an Eagles jersey that says a soda con 2022 on the back or towards soda gun 22 on the back. So you know today is gonna be a good day. A good day. They stopped this day one of our very good friends even after cello said Kyle and I to real world, game time equals jerseys, even though cause not an Eagles fan. It says a solo con 22 on it.


Kyle Mountsier  00:56

Look, I'm not I'm not against the Eagles. Like if it was, if we were doing this thing in Pittsburgh, and it was a Steelers jersey. Problem. It's


Paul Daly  01:07

just like we're doing the Dallas Cowboys


Kyle Mountsier  01:09

match. Not a big deal, right. But the fact that it's like Philadelphia first, so to kind of like it's just rods, it's like there's a grid, there's a grid to it. There's a grid to it. So good.


Paul Daly  01:22

So I mean, like okay, so later today, we're going to be recording a lot of podcasts with Michael Cirillo on the ground. There's just going to be so much good about today. We just want to share a few news stories to get the good flow and for everybody, but also just to share the enthusiasm by the way. A lot of people are starting to pick up tickets for the soda con Monday night party. It's going to be insane. Like I think one dealership like they got like 50 tickets. Like we're bringing


Kyle Mountsier  01:50

everybody votes, y'all. Yeah, I guess they like literally, Philly is showing up to that night, and it's gonna be incredible. I cannot wait.


Paul Daly  02:04

So there's still dealer tickets left for the event in general. Everything is starting to ramp up really, really quickly. So if you haven't gotten your tickets yet great time to get them great time to book your flights, great time to book the hotels do we have hotels in the main rooms in the main hotel block left yesterday afternoon, there


Kyle Mountsier  02:19

were 19 left out of 109 tickets not a problem. There's only 19 Hotel tickets left at the main spot in the main


Paul Daly  02:28

spot. There's another spot that's just a few minutes away. But I mean, like look at their spots in the main spot left, get them go to a soda conduct calm, get your tickets, and we want to jam with you there and so much more of the industry who's going to show up from the last quarter to the text to everybody else. We're gonna do that also auto collabs episode streaming at noon every single day on LinkedIn, YouTube, Facebook, we've been having an amazing time recording these auto collabs podcasts and just some of the most insightful conversations with the people that I've thought I knew that all of a sudden they dropped this. I'm like what? Right?


Kyle Mountsier  03:05

Right, you get into the interview, and you're like, I thought I knew you. Yeah.


Paul Daly  03:12

I mean, I guess that's that's the I like those interviews the most. So maybe it makes sense that we're trying to conduct those interviews, where you know, a lot of people ask the, you know, the same people the same five questions every time, right? So you kind of know what their script is going to be. So our goal with autoclaves is to get people off script, because that's where the good stuff is. Speaking of off script, segue Okay, so Target's profits are down nine, the percent nine zero over year over year, they're citing major discounting, meaning they had a bunch of stock in warehouses, they're like, We gotta get rid of this stuff. So they discounted big time. Also citing inflation burdens, like we've been talking about this a long time. But here's the thing, the previous seven quarters to the last two target had shown healthy profits. So talk about being off script. You know, so the target CEO Brian Cornell told investors, the retail environment remains quote, challenging. But he also said he's, they're seeing an encouraging start to school shopping season. So


Kyle Mountsier  04:17

it's good. It is good. We had to lean in on some school shopping.


Paul Daly  04:21

I did. That's the big school shopping items this year. Same things every writing


Kyle Mountsier  04:27

thing I had when I was a kid, I Elmers glue. Yeah, they haven't really changed that much. At least in elementary school.


Paul Daly  04:36

Was there like an item that you saw on the list that you were like, Oh,


Kyle Mountsier  04:39

well, I will say they you know, I remember like once I got to middle school, the mechanical pencils are really a thing, right? Oh, yeah. They it was like, number two pencils. That's what your kids need. Like that was the only option. They said we need five boxes of number two pencils, which I just thought was really interesting. Like they're like No, we don't do mechanical pencil. Is it


Paul Daly  05:00

number is a number two pencil. Isn't that like the type of Lead or graphite in them? Or is it the actual like yellow pencil? Thickness of the of the whatever's in it now, have you ever seen something that wasn't a number two pencil? No. I've never seen the


Kyle Mountsier  05:18

number one pencil or inorganic Pencils have like a number one or number three or number. Right? It's the it's like the font weight of your writing. But yeah, number one, find us a number one pencil that is


Paul Daly  05:33

there such thing as practice story, the CEO Brian Cornell, he did assure investors saying that he believes the financial impact of the inventory actions, which does mean all the discounting and clearing out, he thinks they were behind us. Now, if you remember yesterday, or if you haven't heard, you can go back and check it out, we covered Walmart, at showing how their buying demographics changing substantially like a lot more people that make over $100,000 A year shopping there. And then just a significant drop in discretionary items. Here is why this is hitting target harder than Walmart, is because people rely on target for more discretionary items. And they see Walmart as the value big box for non discretionary items.


Kyle Mountsier  06:17

So here's the thing. When you think about this, it's like seven quarters of profits. Were they just good? Or was the inventory, right? And the demand, right?


Paul Daly  06:31

Sounds like another industry, I know,


Kyle Mountsier  06:32

another industry that we may want to just be aware of how much inventory is like inventory and demand, how much that plays into our profitability. And that's a tie in right there. Because I mean, think about like, what what Walmart is accessing, and the way that they're approaching, like delivery and pickup in the way that they're approaching the goods that they're that they're providing for people and recognizing affordability and consumer demand is waning and changing. These are things that we can look to other retail industries and understand about the automotive industry and how the next, you know, because we don't we don't have that inventory and or demand level issue yet. But as it changes, what have you done to make sure that ship is right, so that your Walmart situation and not DOJ Wait,


Paul Daly  07:19

are you saying and


Kyle Mountsier  07:20

I'm saying


Paul Daly  07:21

are you saying that if dealers had more cars, on the lot stocking up that rebates and discounting and incentives would come back?


Kyle Mountsier  07:31

No, we're never going back again. Paul, can you believe can you


Paul Daly  07:35

use we've learned too much. We've learned too much to go back, says everyone all the time. Well, I think I don't know if today's episode is met last year if it's tomorrow, but we talked with Matt Lasher, marketing director of the West herb group about this very issue. So I don't know if it's today or not. But either way when it comes out, he's got a few poignant thoughts as always on this but hey, let's take some cues from retail. Let's learn some lessons and do the best we can to not repeat the same mistakes. Speaking of repeating mistakes, segue.


Kyle Mountsier  08:10

This makes me so sad.


Paul Daly  08:13

So I had a really long conversation about automotive entertainment systems and interfaces today. Well, there's a non auto industry writer who has a take on the new F 150 lightning that we thought was a really great candid commentary. It's a real mixed bag. Nilay Patel, the co founder of The Tech publication, the verge we cite their articles often on the show, he recently reviewed the new e 150. And we thought was a very entertaining read and gives you I think a good feel for what an Eevee owner might experience getting into their first Eevee right.


Kyle Mountsier  08:52

I mean, he even took the truck to the dump. Right He did all the things right he made like it wasn't like the typical like oh I went around the for the you know for right turns back to the dealership type thing. Like he put it through its paces the tray understand both the usability, the functionality of the vehicle, as well as the technology and his insights are really strong. He gave some highlights the things like the comfort, the speed, the handling, even the self driving the storage in the front of the vehicle, all where things are. He's like this is this is really good. These are things that we can look up to,


Paul Daly  09:26

you know, I hold your hand before we get into the other ones. He said something that isn't in the shownotes but so he's also got a Ford Raptor, so he hasn't he's a Ford truck owner to begin with. And he said something that made a ton of sense. He goes well because of the batteries are low, low center of gravity with nothing in the bed. He doesn't get that bounce around that you get in a pickup truck with no weight in the back. So I was like, Oh man, imagine what that is like driving a very stable, non bouncing pickup truck with no payload. I was like, like


Kyle Mountsier  09:54

more like a car like ride sounds awesome.


Paul Daly  09:56

Yeah, I'll get right in. But it wasn't all real. As you go ahead, Kyle, Tom. Well, and


Kyle Mountsier  10:02

what's really sad is that it sounds like Ford has done a good job at maintaining driving dynamics and even making them better. Which, if you think about an OEM, that's probably what they're going to be able to focus on more is low lights, we're on the technology side, which has been a concern for me all the way through, on and primarily looking at not just charging station range type stuff, you know, this particular normal stuff, we're all We're all worried about. But he clearly stated that the interface and the operating system of the technology on the onboard technology was slow, confusing to work around, the user experience was not good. This is his quote, the result is that the software experience of the lightning often feels trapped in the past with no clear path to the future, because Ford's real software efforts lie elsewhere, the instrument customer features the same cryptic icons, fundamental menu layout Ford has used in its cars forever, that huge portrait entertainment, which


Paul Daly  11:03

looks awesome, by the way, that's the one that's actually got a jog. Not a jog dial mount is


Kyle Mountsier  11:08

so cool, like, it's massive, it's huge, and all that type of stuff. It's woefully under utilized. Like that's some strong words, boss. And the menu layout can feel like a randomly generated maze with no destination. And then we both


Paul Daly  11:28

Yeah, he talks about this one part, he's like, Well, in the beginning gives you two options. There's controls, and then there's settings. And then if you click on controls, there are also options in the Controls tab that also say set it seemed like settings, settings for the controls that are the settings. Right, so understood. But I mean, there's a bright side to this. And that's that Ford is working with Google to develop an Android operating system that we would all expect, moves a lot more quickly. I mean, most


Kyle Mountsier  11:56

inflicting goodness, yes. And thank goodness that Apple CarPlay and Android Auto exist, and they do the heavy lifting


Paul Daly  12:06

of the infotainment, right, but not like climate in settings. I know. And it's like so look, I think the takeaway from this is that you can use this knowledge and what you've just heard, to start to empathize and pre empathize with what consumers may be experiencing not only in the Evie experience in the transition, learn a few more benefits that you can actually talk about, especially to truck buyers, if you can get one to sell them, but also just kind of understand and get good at you know, explaining how to make the best use of what there is that's there. I mean, we just thought it was sounds like


Kyle Mountsier  12:39

this sounds like a dialed in delivery is necessary to make sure a customer feels confident utilizing this system,


Paul Daly  12:47

right. If you if you walk them through it, then they won't have to figure it out. It's figuring out the maze. That's difficult if you can like help them coach them through the maze, a little bit of guide Paul is longer. Gosh, I just need a guide. Speaking of a guide, segue there are a few things more entertaining than having the staff of Apple guide us through the latest Apple presentation. And according to Bloomberg sources familiar with the matter I love how they have their inside sources. It makes me so happy maybe when they will have well, our own insights sources Apple, Apple is aiming to hold their next launch event on September 7 to unveil the iPhone 14 line. So they're also going to unveil new Macs, high end low end iPads. I remember how stuff used to be so secret and now it's just apparently all available everywhere


Kyle Mountsier  13:37

Apple actually know what's coming, as well as the new


Paul Daly  13:41

Apple Watch. You know, they typically released the product about a week after it shows up on the preview and they have been telling apple and police to gear up for some kind of launch on was it September the week of September 16. Let's read some stats for you if you're an iPhone person, which I think probably the majority of the audience is but we love our Android users too. We just there's just never really any really great Android launches. The most significant or it's too fragmented right Samsung has a launch PC so the most significant eye for 14 Pro changes will be to the camera system which will appear slightly larger to consumers i It doesn't appear larger to pros I guess the Pro models will gain a 48 megapixel wide angle camera so much more a higher resolution wide angle camera which we love that wide angle here it is so do we didn't know we don't know why oh no another 12 megapixel ultra wide and Apple is also planning improvements to video recording and battery life. So you know your customers are going to be talking about this. The people in your stores are going to be talking about this so you know paying attention to it.


Kyle Mountsier  14:50

And seriously y'all when we say get an iPhone and start making content. Like this is another reason there are making more updates to your ability to create content for your business and the ecosystem demands it and people want it so go find out how to do that.


Paul Daly  15:11

Without a doubt. Oh, there was something else in there about the iPhone was gonna say, dodo Dodo, it's probably gone. I've been making content thing you just had. You had me at hello Kyle with making more content. Oh, okay. Oh, man, it's right. I'll tell you I'll tell you this. Tell me what I was thinking.


Kyle Mountsier  15:27

I literally just happens anyway, watch this episode in just a minute. But I literally just got off an interview for auto collabs with a gentleman named Jeff Avila. You can look him up. He runs marketing, our V i l l. A, you're gonna want to listen to the episode. But literally, this guy. It's unbelievable. they monetize their YouTube on content.


Paul Daly  15:49

A dealer monetizes their YouTube. Because they make good content that's


Kyle Mountsier  15:53

like, that's like the tip of the iceberg for all of the really cool stuff that they're doing and in amongst their community and driving traffic to themselves. So like when we say the reason why we look at an iPhone and its ability to create content is because these are the types of things that you can be doing for your dealership and dealership group. That will literally change the game.


Paul Daly  16:13

Well, there you have it. That's only Thursday. You got a lot of work to do. We got a lot of work to do. We got a lot of Philly to take over. Right. We got to make sure things are right with the venue and the tech and all that you have to make sure that your customers right your team is right. So go out there. Get Thursday. We're so rounded out a good week here.