Checkout comes to ChatGPT, Walmart to remove dyes and additives, and how Cakes is redefining brand corporate culture

0:02e-commerce customers need instant effortless support and anything less leaves your sale at risk So with peak season coming soon, check out Finn, the number one AI agent for e-commerce support. Finn scales with your business from seasonal surges to growth and expansion, delivering the highest resolution rates and highest quality experiences across every step of the customer journey. But if you're wondering whether it really works, just ask the thousands of customers like Nuuly and Avocado who are using Finn to provide end-to-end e-commerce support every day. Check it out at fin.ai slash modernretail to learn more.

0:56Hey everybody, welcome to the Modern Retail Podcast. It is our show that covers the ways the retail industry is changing and modernizing. I am senior reporter Gabby Barco. I'm here with co-host Melissa Daniels. How are you, Melissa, this week? You know, it's the start of Q4. There's a new Taylor Swift record, and I'm oohing and aahing over Selena Gomez's wedding looks. I honestly couldn't be better. We were just talking about that off mic, and yeah, I like them. And, you know, I'm sure the wedding industry loves the three outfit change trend that keeps going strong. There's always a retail angle.

1:38Exactly. All right. Well, this week I'm excited about our segments. Later on in the episode, we're joined by the co-founders of Cakes, Taylor Capuano and Casey Sarai to talk about the new era of the company culture. They are a buzzy TikTok brand. For those unfamiliar, they make nipple covers. And they are also creating a really interesting strategy when it comes to their workplace and the benefits. So listen out for that later. But first, let's chat through some news of the week. So this week, we had OpenAI announce a new feature called Instant Checkout. And this basically is going to support, just like it sounds, single item purchases on ChatGPT.

2:25And also Walmart announced that it's going to remove synthetic dyes from its private label food. So I'm excited for that one. I know we both have a lot of thoughts on dye removal this year. But yeah, let's start with this OpenAI announcement. We should mention that the tool is initially open to Etsy sellers in the US, and then they're going to add Shopify merchants later. So you'll have all the brands on Shopify pretty much. are going to be surfaced in the results. But yeah, what are your thoughts on this? I mean, it's kind of only a matter of time, right? Yeah, yeah. I think a lot of us, you know, had already talked about this potential and it was kind of teased out a little bit earlier this year and we sort of knew it was coming.

3:13But I think it's just been so clear the way that people are using ChatGPT and their shopping journey and other AI tools, sure. But specifically, OpenAI's ChatGPT has become just a big thing that people use in their shopping journeys. And it was only a matter of time before someone figured out a way to make the connections to make sales happen off of it faster. You know, my kind of biggest questions going into this are like, what are the brands going to get out of it? Like if someone buys something from me on ChatGPT, like, do I get that customer data the same way I would if they showed up on my site, like, gets into all that sort of like zero party stuff.

3:51But yeah, I think it's going to be a game changer in a lot of ways. You know, the amount of people, especially younger generations like Gen Z, who are using AI for shopping has got to be a majority at this point. Yeah, it sort of has exploded in the last few months. And we'll talk a little bit in a minute about how brands are reacting or trying to adapt to it. But yeah, I don't know what brands are gonna have access to, but I do know that OpenAI is going to get a transaction fee from purchases on there. So much needed revenue for the company given that they're famously unprofitable. So yeah, I think obviously they're trying to move toward this e-commerce integration.

4:38And, you know, during the rise of GEO, which has essentially replaced SEO for a lot of digital marketing, that's generative engine optimization, we should say. But yeah, the tool itself, I was talking to our colleague, Julia Waldo, who's, as we speak, is working on a story talking to Etsy sellers about, you know, what's going on with this tool. It sounds like they kind of were caught off guard. Like, I don't think Etsy communicated with them that this was coming. This was sort of just a joint announcement on Monday by the two companies. And, of course, you know, the reaction was that both of their stock spiked.

5:22But, yeah, as far as how it actually is being used, I guess, practically, you know, it just rolled out. So, you know, this is just take this with a grain of salt. But yeah, Julia was testing it out. And she said that so far it's showing her Etsy listings, but it kind of sent me some screenshots that I'm describing. But it's essentially showing you like, you know, a vase. And then it's like, visit Etsy. And you're being taken, I guess, to the Etsy website that way. Whereas I guess I was under the impression, and I believe this is true, is that you should be able to purchase in-app. So maybe some glitches.

6:02Again, this is all just our first blush experience. Yeah, I mean, I have like a dormant Etsy shop and I don't believe I received anything in my email about this happening this week. So I'm not sure about how much communication has happened to sellers. But I really wonder how much they're going to adopt to it and how much they're going to like it. I mean, on one hand, yes, okay, sales are sales and anyone buying your product from whatever channel is probably a good thing. But, you know, there's sort of an ethical tension sometimes with the use of AI and people who make creative work for a living.

6:35So I don't know how many of them are going to, you know, like their products kind of coming to customers through this channel. So it's an interesting discussion. I'm very curious to read what Julia writes about. The other thing that I think is interesting here is that, you know, we heard that OpenAI plans to introduce multi-item carts and sort of, you know, expand more on what you can buy and where. and it's just interesting to me that like we're already talking about growing this before people have already really had a chance to use it and get used to it. Like it just reminds me that there's so much like run before we walk with some of this AI stuff and like, well, I'm not discounting the fact that it's prevalent and game changing.

7:13You know, I think it's okay to try things out before we say how they're going to be expanded. Yeah, I mean, you know, this is tech we're talking so it's par for the course. to kind of envision where it's going to go. Yeah, I'll get off my soapbox. But yeah, she did say, yeah, she's like, my roommate and I both clicked on a total of like 20 items, but couldn't purchase any of them in the app directly. So we'll test it again over the weekend and let you know. But yeah, like just to kind of go back to the beginning of talking about how is this going to impact merchants, right? Because eventually it is going to open up to over a million Shopify merchants.

7:55They, I think, name dropped Skims. Shout out to our last episode. And Glossier has some of the brands that are coming on board. So yeah, I mean, how do you create a marketing strategy around that? And yeah, your thoughts on how brands have been preparing for this moment, right? By kind of beefing up their GEO or their content and all of their organic marketing channels to be able to kind of be, you know, surface in the results when people are searching for something. Yeah. Yeah. I think you and I've both had a lot of discussions with brands about that this year. And a lot of them are really excited about it and really trying to figure out, okay, what are, you know, the sort of keywords or things I have to do on the back end of my website to make sure I can get that traffic from ChatGPT, Gemini, Hyperplexity.

8:43And there's also a lot of kind of PR and marketing around it too, because brands know that a lot of earned media is what's going to help them in these AI chatbots as they're analyzing the web for responses, right? They sort of look for that validation from third-party sources. So we think, you know, suddenly you and I are hot commodities, right? Because we write about brands in our stories. Yeah, there's that. It's just, yeah, beefing up your presence generally, but also don't worry, the ad agencies are catching on. They're building, I was talking to someone the other day and their agency is potentially building out a search program, a way to help brands figure out how to get their ads, yeah, in front of these platforms.

9:31So we shall see, but yeah, ChatGPT, Gemini, Perplexity, they're already bringing so much traffic to e-commerce. So yeah, we'll see how this plays out. And as far as how it's actually working in practice, I'm just going to give tech the benefit of the doubt and think that it's only been a few days. Maybe it'll check itself out. Yeah. Yeah. Okay. I don't have Chad GPT on my phone. So I should probably download it for research purposes. But yeah, I put it on recently. That's more of a personal decision. I put it on recently for, you know, just to kind of see how I end up using it. I do use it on desktop, though, full disclosure.

10:19It's all good. You and like millions of other people. Yeah. Well, we'll follow this along as it unfolds. But let's move on to our next topic of the day. Okay, so Walmart is removing synthetic dyes from all of its private label food items in the U.S. As I wrote that sentence out during prep, I couldn't help but notice. I was like, oh, these are like a bunch of qualifiers. But hey, you got to start somewhere. Yeah, yeah. Well, they can't control what other companies do, right? The only thing they have control over is what's in their own private label products. Yeah, I mean, for those who didn't catch this news when it was announced, Walmart is also going to remove more than 30 other ingredients like certain preservatives, artificial sweeteners, fat substitutes, not just dyes.

11:09Some of the impacted brands include Great Value, Market Side, Freshness Guaranteed, and one we've discussed prior on the Modern Retail Podcast, Better Goods. I think it's by January 2027 at the latest that some of these rollouts will include the new ingredient lineup because it does take some time for manufacturers to figure out the swaps. Yeah, you know, we're talking about a little bit more than a year from now. So, you know, it's going to be a pretty quick turnaround in the context of things. But they do already have about, they say 90 % of Walmart's U.S. food private brand products are free from synthetic dyes already.

11:51So I guess, you know, they just got to build on that. Sure. Yeah. Well, and just for some context, I mean, the synthetic dyes issue is not a new one, right? You know, here in the state of California, they already banned synthetic dyes from food served in school lunches, which are also free in the state of California. You know, and there's been a lot of other companies, which I think we'll probably get into, you know, and we've talked about before that there's a lot of companies moving away from synthetic dyes. And I think if you're a startup right now in the food CPG category, you wouldn't even consider a synthetic dye.

12:23So this is as much of a correction for Walmart as it is, you know, them being proactive. Yeah, it's still a big deal because it is the largest grocery chain, largest retailer in the country. So the fact that they are taking a step in this direction is pretty notable. They are following in the footsteps of, like you said, some other conglomerates. Earlier this year, we talked about Kraft Heinz pulling their artificial dyes from products also by 2027. So this is a pretty big trend right now. And Walmart itself actually acknowledged that this is coming from real feedback from their customers, actually.

13:06So yeah, what are your thoughts on this data that they announced during the release? I think it was smart of them to sort of show, hey, this is where this is coming from because there is so much conversation in the ether right now about the role that Secretary of Health Robert F. Kennedy Jr. is playing in cleaning up food and food supply. But what Walmart said was that 62 % of their customers say they want more transparency in their ingredients and 54 % say that they review food ingredients, which tells us that there's a majority of their shoppers who want to know what's in their food. And they want to know that the company is being honest with them and telling them what that is.

13:49So I think it's a win, you know, for Walmart in a lot of ways to do this. I do think maybe it's a little bit of a better late than never from some in this field and some who've been watching this. But I think it will probably only yield dividends. I mean, I can't see customers, you know, clamoring for this kind of stuff when Walmart's already done enough research to show that people really are looking for this. There's also the fact that Walmart has already dipped its toe into this arena with Better Goods. You know, they're calling that their quality chef-inspired private brand, which has a line of plant-based and made without kind of items.

14:29And it's also really affordable with about 70 % of the items under$5. And as we've covered before on this podcast, Better Goods has just been kind of a real runaway hit. I mean, I think it had 300 % growth, according to a numerator survey, after it launched in April 2024. It's got a 46 % repeat rate and a 20.6 % household penetration rate. So I think when Walmart put out BetterGoods and saw how well it was received, it probably got them thinking, you know, hey, how do we sort of take this ethos to the rest of our private label? That's just pure speculation on my part, but I would imagine that sort of real-time feedback they were getting with Better Goods helped inform this conversation.

15:11Yeah, I mean, that line was sort of testing the waters as far as the Walmart customer. You know, their preferences have changed so much in the last few years to a decade. And so introducing things like plant-based and gluten-free products in Better Goods really showed them that there's a huge market here. So I'm sure it's good for business too and the customer's health. All right. Well, next up, let's preview our segment with cakes for the listeners. That's coming up after the break. We had a really fun time talking to the founders for this segment. Right, Melissa? I feel like this is an area we don't really, you know, discuss a lot on the show because it's not necessarily like a business angle.

16:01But I think startup work culture, workplace culture is becoming more and more important as people, you know, just inflation, expenses, people are having to weigh all of their options when they do take on a new job. And yeah, you can maybe give a little bit of preview of what Cakes is doing. Yeah, I mean, this was a great conversation with Taylor and Casey. They launched this brand of nipple covers that have been really a runaway success and then also launched in Ulta Shelves earlier this year in addition to their own DTC business. And what they've done as their company is scaled is make sure that they're kind of putting benefits out there that are really going to help their performers do their best, right?

16:43They've got some really great childcare benefits. They do some quiet periods, including like a bunch of Q4, which I think if you told most brands, hey, you're going to take four weeks off during the busiest season of the shopping year. I think a lot of brands would blanket you twice like you were crazy, but Cakes has a way to figure it out. And I think it was just a really smart conversation with a lot of great insights for anyone who's interested in the behind the scenes of how brands are not just selling product, but building companies and building businesses. Well, listen out for that after the break.

17:29E-commerce customers need instant, effortless support, and anything less leaves your sale at risk. So with peak season coming soon, check out Finn, the number one AI agent for e-commerce support. Finn scales with your business, from seasonal surges to growth and expansion, delivering the highest resolution rates and highest quality experiences across every step of the customer journey. And no matter how complex your tech stack may be, Fin seamlessly integrates with your existing tools like Shopify, Stripe, and more to take action instantly, delivering accurate on-brand and real-time answers to your customers that feel genuinely personal, all while you maintain complete control.

18:11But if you're wondering whether it really works, just ask the thousands of customers like Nuuly and Avocado who are using Finn to provide end-to-end e-commerce support every day. Check it out at finn.ai slash modernretail to learn more.

18:34When Taylor Capuano and Casey Sarai founded Cake's Body back in 2021, they were doing something pretty novel in the undergarment space. They make reusable silicone nipple covers designed to provide coverage and a seamless look under clothing. It was a scrappy bootstrapped beginning, but thanks to a host of organic TikTok content, their products have become a viral hit and the brand has now surpassed$100 million in revenue. This summer, they also made their national retail debut in Alta Shelves nationwide. But behind the scenes, company culture has been a huge focus for Cakes as they've been scaling.

19:13That includes standout employee benefits like child care support, unlimited PTO, plus weeks-long quiet periods, even during a crazy Q4. So we're going to get into how Cakes is recreating corporate culture for the modern era in the retail and e-commerce space. Taylor, Casey, thank you for joining myself and Gabby Barco today on the Modern Retail Podcast. Thank you. What a nice intro. It's always like going into a serious podcast like yourselves and coming from the background we are with, you know, running a nipple cover boob solution business. It's a lot to be able to get the depth across in a quick amount of time.

19:53So I really appreciate that. Oh, you flatter me. You flatter me. I think boob solution is a very serious topic, though. I don't think there's anything frivolous about it. Well, it was funny because when we started, we started because, I don't want to say as a joke, but it was like this very simple problem and solution that we were trying to create. And very soon after we launched, though, we did start hearing from women in every stage of life, from breastfeeding moms, women going through breast cancer, body changes, menopause and everything in between. And we did realize it was a little bit deeper than just the pads and sports bras.

20:33but it's always a fun, fun brand. Absolutely. I mean, now you're probably present at weddings everywhere because of people wanting that look, you know, for the uninitiated with cakes. It really, it does allow you to wear like a strapless or a backless situation where a regular bra might show in a much easier way than some of the other traditional strapless bras out there or backless bras. So I feel like, yeah, you're probably at like 90 % of weddings in America or something. That was something that was like one of the first aha moments that we were on to something and it was becoming a big thing.

21:07Because when you're starting your business direct to consumer on social media, it almost feels fake. Like when you're growing, you're like, is this real? Like, and even you start to see the numbers grow and you're like, but it's hard to like almost like picture people actually wearing your products or using your solutions. And so we were at a friend's wedding and this group of like 10 girls all whipped their cakes out of their dresses for the wedding. And we're like, oh my God, like this is a real thing. So it's just like, there are kind of a million struggles that I'm sure we could share, but it's always nice.

21:41I know a lot of people listening are in kind of the earlier stages of entrepreneurship and just being like, this is a real thing. We're onto something. Well, and I think that's actually a good segue into, you know, what sort of your behind the scenes was like as you started scaling, right? So aside from the kind of product and public facing journey itself, you know, what kind of conversations did you all have about corporate culture? You know, what did you decide that you wanted to do differently once, you know, you started hiring employees and the like? Well, we always joke, we had our initial, I put in air quotes, business planning retreat.

22:18That was Taylor and I at a hotel bar, just the two of us. And we were like Googling how to start a business. And we had this big ambition of knowing we wanted to create solutions and start a business. And we really, you know, we started with no money, no social media following, no investors. So it was really a lot of things to navigate. And at the time, Taylor was navigating being a new mom in corporate America, which is nearly, I don't want to say impossible, it's possible, but it was very, it's very challenging. And from the beginning, we said, we want to create a culture that we want to work at.

23:01We didn't really know we were going to have this whole team of employees and everything, but we were like, let's just create the kind of culture that we want to work at. And I always joke, like one of the first questions Taylor asked to me when it was just the two of us was, what kind of company culture do we want to have? And I remember laughing, being like, what are you talking about? But it was such an important question to ask ourselves early on because it really planted the seed of being thoughtful around the type of environment we wanted to work in and how we were going to share that with eventually a team.

23:34I think from here, this is a good time to get into the granular benefits that you've built into your packages. One of the notable ones is, of course, the child care benefit, but it goes beyond that. So I want you to talk a little bit about the remote first setup, which, of course, has become popular post-COVID. But then you've also got the aforementioned quiet periods and the unlimited PTO and just all the other good stuff that a lot of people, I'm sure, look forward to when they interview at the company. Yeah, it all has kind of evolved somewhat organically in terms of like it started without necessarily policies in place, but us just, I mean, I don't think anyone's ever asked for time off in the first two years before.

24:24We didn't really have formal policies or HR because we were still building our business. But now that we're at the point four years in where we are able to establish these types of core business principles and put them on paper and use them to rally our team behind, it's helpful for us to be able to make all of this feel more tangible. Well, one of the, out of all the things that we have accomplished in the last four years, the thing I am most proud of is the Cakes Child Care Credit, which we rolled out May of 2025. And that was really in response to us both experiencing unbearable child care costs when we were working in corporate America.

25:10I was a new mom and I remember going through my personal expenses. And it almost didn't make sense for me to even continue working because I was basically breaking even with the cost of childcare. At that point, it was like, I need A, to make more money. I need more financial freedom. But on top of that, I need the emotional support of childcare to be able to thrive at work and thrive at home. And I just need more support. So as we have gone through Cakes, we have both had babies. We were on back-to-back maternity leaves last year. And the company saw its greatest peak of growth that we ever had while we were both on maternity leave.

25:54And I think that was very telling to us of how powerful time off can be, but also how powerful having the right support at home when you're going through new motherhood can be. So that really inspired the core of our workplace philosophies. The child care credit was, it's fully subsidized child care for parents with kids under the public school age. So we reimburse up to$3 ,000 a month per employee. And it's really meant to relieve the emotional and financial burden that these crazy child care costs can create. And our goal from the beginning of launching this was like, if we can just keep either one woman in the workforce or man, because all of our employees are eligible for it.

26:41If we can keep one person in the workforce who otherwise would have to leave because of these costs, that's a win. Or if we could maybe make someone feel more comfortable starting a family who was intimidated by the financial pressures of it, that will be a win to us. now like it's not necessarily purely altruistic i think we have seen the flip side when employees are supported and primed to do their best work by being able to take a breather because they know their kids are in good hands they're performing much better at work so it's a win-win for us for our employees for the economy which there's a ton of research that shows when um when both parents if they choose to want to stay in the workforce, it's good for all of us.

27:27So it's really just the beginning. Like there's, this is step one of controlling what we can control within our four walls. But it's like, honestly, if it's really opened our eyes to so many more challenges and opportunities to create a more conducive environment for working parents, because it's just, it's borderline impossible to make it work as a working parent. Yeah, as someone who's tried to work from my couch with a two and a half year old next to me, can confirm, not a great idea. Not a good solution. Kind of just end up failing on both fronts and feeling like a moron in more ways than one.