Placer.ai's Ethan Chernofsky Reveals 2024 Retail Superlative Awards & Surprising Insights | Ask An Expert

Chris Walton: 00:00:08

Welcome to the latest edition of the Omnitalk Retail Ask An Expert series.

Chris Walton: 00:00:12

I'm your host, Chris Walton.

Ann Mazinga: 00:00:14

And I'm Ann Mazinga.

Chris Walton: 00:00:15

And we are the founders of omnitalk, the fast growing retail media outlet that is all about the companies, the people and the technologies that are coming together to shape the future of retail.

Chris Walton: 00:00:24

Or as we like to say here at omnitalk, the media organization that focuses on tomorrow, today and our next guest.

Chris Walton: 00:00:32

I don't, I don't think he needs an introduction in any way, shape or form.

Ann Mazinga: 00:00:36

No, everybody knows him.

Chris Walton: 00:00:37

Yes.

Ann Mazinga: 00:00:38

Or should.

Ann Mazinga: 00:00:38

If they don't, they should.

Chris Walton: 00:00:40

They should.

Chris Walton: 00:00:41

Anyone in our circles definitely knows this gentleman that I'm about to introduce.

Chris Walton: 00:00:44

And I think we could say that he has now been on our show more than anyone.

Chris Walton: 00:00:48

I haven't verified that, but I'm pretty sure that's true because our relationship goes back now, I believe it or not, I think six, five or six years at least.

Chris Walton: 00:00:56

So I am pleased to introduce Placer AI's SVP of Marketing, Ethan Chernofsky.

Chris Walton: 00:01:02

Ethan, welcome to Omnitalk.

Ethan Chernofsky: 00:01:05

Thanks for.

Ethan Chernofsky: 00:01:06

Thanks for having me.

Ethan Chernofsky: 00:01:07

I've decided that next time I'm just going to interrupt when you guys introduce yourself.

Ethan Chernofsky: 00:01:11

So it'll be like, I'm Chris.

Ethan Chernofsky: 00:01:12

I'm Ann.

Ethan Chernofsky: 00:01:13

I'm just going to jump right in and be like.

Ethan Chernofsky: 00:01:14

And it's Ethan.

Ann Mazinga: 00:01:14

I'm Ethan.

Chris Walton: 00:01:15

And I'm Ethan.

Ann Mazinga: 00:01:16

Yes, it's me, Ethan.

Ann Mazinga: 00:01:18

Yeah, yeah.

Chris Walton: 00:01:19

It's a Mia.

Chris Walton: 00:01:20

Ethan.

Chris Walton: 00:01:21

Yeah.

Chris Walton: 00:01:21

So, so, so, Ethan.

Chris Walton: 00:01:24

So for those of you that have seen Ethan on our asking expert in the past, you'll know that we actually have no idea what Ethan is going to prepare for us.

Chris Walton: 00:01:34

We, Ann and I, see what Ethan brings to the table and we are reacting to it in live time, as are you, as you're seeing the content that he's prepared for us.

Chris Walton: 00:01:43

And today he asked us to do something very special and very unique.

Chris Walton: 00:01:47

wants to hand out Placer AI's: 2024

Chris Walton: 00:01:53

And like we said, I have no idea what direction this is going to take.

Chris Walton: 00:01:56

I have no idea what awards he's going to hand out.

Chris Walton: 00:01:58

This could get ugly.

Chris Walton: 00:01:59

It could get fun.

Chris Walton: 00:02:00

It could get great.

Chris Walton: 00:02:00

I'm really looking forward to it.

Chris Walton: 00:02:02

Hopefully it's going to be great entertainment for everyone and very thought provoking as well.

Ann Mazinga: 00:02:07

Before we get into the discussion with Ethan, though, I will just remind all of you who are joining us today for this crazy ride with Ethan.

Ann Mazinga: 00:02:15

You can ask Ethan and the team at Placer any questions that you Might have in the chat session window to the right of your screen.

Ann Mazinga: 00:02:22

Plop those in there, and we'll try to get to all of them throughout our discussion.

Ann Mazinga: 00:02:27

Okay, Ethan, before we get started, you've joked about this in the past.

Ann Mazinga: 00:02:31

Chris and I might be able to give this overview.

Ann Mazinga: 00:02:33

But for those who are joining us for the first time, what is Placer, and what is it about the data that you collect that makes it such a useful tool in providing insights into the topic at hand today?

Ethan Chernofsky: 00:02:44

And I'm so happy you asked that question.

Ethan Chernofsky: 00:02:45

I didn't really see it coming.

Ethan Chernofsky: 00:02:47

But Placer is a location analytics company that means people vote with their feet.

Ethan Chernofsky: 00:02:51

We show you how they vote across the United States every single day.

Ethan Chernofsky: 00:02:54

We do that by analyzing a panel of tens of millions of mobile devices and utilizing machine learning and AI algorithms on top to make estimations of retail visits across the country.

Ethan Chernofsky: 00:03:03

Very critically.

Ethan Chernofsky: 00:03:04

This is all aggregate data that has been stripped of identifiers like maids.

Ethan Chernofsky: 00:03:07

So we are GDPR and CCPA compliant.

Ethan Chernofsky: 00:03:10

We then show that off in a wealth of different reports within our platform and everything from the visitor journey, true trade areas, visit trends, and a whole lot more.

Ann Mazinga: 00:03:20

Ethan, I want you to do a CROCS collaboration that says people vote with their feet.

Ann Mazinga: 00:03:26

Can we, like, figure out some way to get, like, Placer like, things?

Ann Mazinga: 00:03:30

I don't know, some shoe collaboration?

Ann Mazinga: 00:03:32

Maybe not Crocs, but I know that they're open to just about any collab, so I think that should be something that at nrf, we're getting Placer, something that says people vote with their feet.

Ethan Chernofsky: 00:03:43

Because I love the bar has been set for next year.

Ann Mazinga: 00:03:45

Okay.

Chris Walton: 00:03:46

And that seemed like a slight dig to crocs.

Chris Walton: 00:03:48

You're like, don't collab with anybody.

Chris Walton: 00:03:52

Well, I don't.

Ann Mazinga: 00:03:53

I don't mean that in a bad way.

Ann Mazinga: 00:03:55

I'm just saying, like, you know, that they're open to partnerships, and they could probably come up with a really cool, like, product that a lot of the young INS would be into.

Ann Mazinga: 00:04:06

I mean.

Chris Walton: 00:04:07

Yes.

Ann Mazinga: 00:04:08

This is why I'm not on your.

Ethan Chernofsky: 00:04:09

Session on omnitalk called that's a Croc, where you talk about your least favorite thing that you're hearing that month.

Ethan Chernofsky: 00:04:18

Sponsored by Crocs.

Ann Mazinga: 00:04:21

I mean, I'm down.

Chris Walton: 00:04:23

Yeah, you're here for this.

Chris Walton: 00:04:24

Free consulting all day.

Chris Walton: 00:04:25

All right, well, let's get.

Chris Walton: 00:04:26

Let's get to the program.

Chris Walton: 00:04:27

Let's get to why we're all here.

Chris Walton: 00:04:29

Ethan, please hand out the first award of today so it looks like it's most likely to succeed.

Chris Walton: 00:04:36

Parentheses Forever.

Chris Walton: 00:04:37

Is that right?

Chris Walton: 00:04:38

What the heck does that mean?

Ethan Chernofsky: 00:04:39

Okay, so when we were thinking of superlatives, I went back to my yearbook and, like, tried to figure out which ones actually apply.

Ethan Chernofsky: 00:04:45

And so one of them was most likely to succeed, which is a great yearbook superlative.

Ethan Chernofsky: 00:04:50

And I think the.

Ethan Chernofsky: 00:04:51

The winner for us, and we have to put it in that parentheses of forever for the reason I'm going to explain is Costco.

Ethan Chernofsky: 00:04:57

Right.

Ethan Chernofsky: 00:04:58

I think when you look back at: 2024

Ethan Chernofsky: 00:05:09

And I think it's kind of like Hail to the King moment for us.

Ethan Chernofsky: 00:05:13

When you think about Costco, not only do they have consistent visit growth, not only do they see that over time, we know that they're able to drive kind of large baskets.

Ethan Chernofsky: 00:05:21

We know that they've been.

Ethan Chernofsky: 00:05:21

They've proven capable of adapting kind of no matter what the situation is.

Ethan Chernofsky: 00:05:25

So people are making more visits, fewer visits, fewer visits per individual, more people coming.

Ethan Chernofsky: 00:05:32

They kind of succeed no matter what.

Ethan Chernofsky: 00:05:34

But I think the big thing that we saw this year that kind of put it over the top is like, hey, this is the retailer that we were kind of most impressed by is this shift of millennials and younger audiences coming into the Costco mix.

Ethan Chernofsky: 00:05:46

So we think about, like, migration patterns, people moving into the suburbs, that clearly that audience shift created an opportunity.

Ethan Chernofsky: 00:05:53

But what was fascinating is in a lot of cases, we saw retailers move along with their audiences or retail or audiences move and then kind of seek out the closest comp to the.

Ethan Chernofsky: 00:06:02

To the retailers they had been going to in more urban environments.

Ethan Chernofsky: 00:06:05

But with Costco, everyone just flocks there, because if you have space in your house, if you are pursuing value, if you're pursuing product quality, if you're pursuing experience, like, Costco seems to check every box for every consumer group.

Ethan Chernofsky: 00:06:19

And that's why this kind of succeed forever piece is so critical, because they've essentially proven that they are not tied to a specific audience.

Ethan Chernofsky: 00:06:26

They are going to continue to evolve, and audiences are going to find them because what they bring to the table is so unique and powerful.

Chris Walton: 00:06:33

So, Ethan, I got to ask you because.

Chris Walton: 00:06:35

And you know, like we said, we're doing this on the spot.

Chris Walton: 00:06:38

So I don't know what data you have at your fingertips or what data you've looked at in preparation for this, but are these patterns something you're seeing across the warehouse club industry?

Chris Walton: 00:06:47

Like, is BJ Sam, Are they seeing similar type movements across the generations?

Chris Walton: 00:06:52

That's question Number one, and then two, how does Sam's Club fit into this?

Chris Walton: 00:06:56

Because I think the forever question or the forever parentheses is the one that I don't want to speak for.

Chris Walton: 00:07:01

And, but I might take umbrage with here because I think Sam's Club is kind of lurking in the shadows here, ready to pounce on Costco's opportunity or there, or to take or to kick Costco off the pedestal, so to speak.

Chris Walton: 00:07:13

So those are my two questions.

Ethan Chernofsky: 00:07:15

Okay, so the answer is, is one, yes, all of the warehouse players are kind of that those membership clubs are seeing similar versions of success.

Ethan Chernofsky: 00:07:23

But I don't think you can strip away the kind of longevity from the Costco piece.

Ethan Chernofsky: 00:07:28

So Sam's Club had some ups and downs, obviously doing tremendously well.

Ethan Chernofsky: 00:07:31

BJ's was not doing as well pre pandemic saw this big surge because of the pandemic and kind of has ridden that wave.

Ethan Chernofsky: 00:07:36

I think just the longevity of Costco bears kind of note also.

Ethan Chernofsky: 00:07:41

There's an element to Costco about the way they spread into new kind of verticals, new offerings that is super noteworthy.

Ethan Chernofsky: 00:07:48

Like the idea that Costco has like a.

Ethan Chernofsky: 00:07:50

You rent cars through them, you book travel, you get your kind of hearing aid checked.

Ethan Chernofsky: 00:07:55

Like, that is a level of trust in a brand that doesn't really make sense in the retail environment.

Ethan Chernofsky: 00:08:01

And they're so good that it kind of sets them apart.

Ethan Chernofsky: 00:08:04

For me, though, certainly those other.

Ethan Chernofsky: 00:08:06

Those other players are great.

Ethan Chernofsky: 00:08:07

I will say that there was.

Ethan Chernofsky: 00:08:08

There were some other brands we were throwing around.

Ethan Chernofsky: 00:08:11

We were having this conversation.

Ethan Chernofsky: 00:08:12

So one was like Trader Joe's, I think, has done this brilliant job.

Ethan Chernofsky: 00:08:16

And we see fascinating metrics about Trader Joe's, including the willingness to drive farther, to spend, to literally, like go out of your way to make them a part of your grocery mix.

Ethan Chernofsky: 00:08:27

Really impressed with Dollar General this year.

Ethan Chernofsky: 00:08:29

I think when we've seen challenges in the value lane, Dollar General has been amongst the more resilient players within it.

Ethan Chernofsky: 00:08:36

The kind of heavier investment in pop shelf has been super impressive for US brands like HomeGoods and like Lifetime on the fitness side, also super impressive.

Ethan Chernofsky: 00:08:44

But for us right now, we did a post earlier this year, we said if we had to do NFL comparisons for, for retailers, the Costco is the Chiefs, like, they have won a bunch of Super Bowls.

Chris Walton: 00:08:55

They're the power ranking.

Chris Walton: 00:08:56

They're number one.

Ethan Chernofsky: 00:08:57

Number one on the power ranking right now.

Chris Walton: 00:08:58

All right, all right.

Ann Mazinga: 00:09:00

What do you have next, Ethan?

Ethan Chernofsky: 00:09:03

Segment of the year.

Ethan Chernofsky: 00:09:05

Oh, now.

Ethan Chernofsky: 00:09:06

Now we're in award territory, but segment of the year is Fitness.

Ethan Chernofsky: 00:09:13

And I think, I think there's a few reasons why I can't shake the decline narrative that was so prominent a few years ago where we're like, oh, that's it, we're never going to gyms again.

Chris Walton: 00:09:24

Right.

Ethan Chernofsky: 00:09:25

Also we have to remember that even when the sector bounced back, everyone's like, well, oh, that's because Planet Fitness and these value oriented chains are really cheap and so they're kind of tapping into that potential.

Ethan Chernofsky: 00:09:38

Totally true.

Ethan Chernofsky: 00:09:39

But this year we've seen a massive recovery even in the kind of more high end chains, more visits per venue, significant growth.

Ethan Chernofsky: 00:09:47

So the fact that it's across the board is super significant.

Ethan Chernofsky: 00:09:50

So it's this, it's the lasting ness of it.

Ethan Chernofsky: 00:09:53

Like there's a stability to this trend of growth on growth.

Ethan Chernofsky: 00:09:57

It's widespread.

Ethan Chernofsky: 00:09:58

So it's happening kind of across these different, these different subsegments within fitness.

Ethan Chernofsky: 00:10:03

And I think that speaks to the power of it and the ability to succeed no matter what the customer is looking for.

Ethan Chernofsky: 00:10:12

So for customers that are like, hey, I want a peloton in my house, I want to do Soul Cycle a couple of times a week and I want Planet Fitness amazing.

Ethan Chernofsky: 00:10:19

I want to spend more on the gym.

Ethan Chernofsky: 00:10:20

I'm going to go to Lifetime, I'm going to go there every day because I'm not going to spend on other things.

Ethan Chernofsky: 00:10:25

Great.

Ethan Chernofsky: 00:10:26

They're taken care of.

Ethan Chernofsky: 00:10:27

So I think this segment has really grown into its own and driven this increased wave that is lasting several years after that initial peak.

Ann Mazinga: 00:10:35

Yeah, Ethan, I'd be really curious to get even more into the data, like looking at things like, like Lifetime really moving towards this, like not just a fitness concept but a place that's got a, you know, a work component, they've got childcare, they're really kind of designed.

Ann Mazinga: 00:10:51

Their whole theme was like we want to be the like country club experience, not just so you're spending more time there than just for fitness.

Ann Mazinga: 00:10:59

So I'd be curious either this time if you have that data to support like which brands are really strongest here or you know, if impacted things or if there's been things that have impacted it.

Ann Mazinga: 00:11:10

Like a lifetime that's opened, say at a shopping mall destination or something like that, like if some of these things have changed, you know, the growth in this area or impacted the growth in this segment.

Ethan Chernofsky: 00:11:21

Yeah, I mean broad strokes, it's, it's what you're talking about.

Ethan Chernofsky: 00:11:24

It's the players that are on that higher end of the spectrum are winning based off of repeat consumer visitation.

Ethan Chernofsky: 00:11:32

So More visits per venue.

Ethan Chernofsky: 00:11:34

Whereas the value chain is benefiting off the idea that, hey, I can be part of the mix and still succeed.

Ethan Chernofsky: 00:11:40

And for us, that also shows a real rationality to the decision making, like it makes sense.

Ethan Chernofsky: 00:11:45

So you think it's more lasting because the consumer is making a very clear choice of, hey, I'm going to do a value gym because I want to make it part of a wider mix.

Ethan Chernofsky: 00:11:53

I'm going to choose a more expensive gym and I'm going to make that my core place.

Ethan Chernofsky: 00:11:57

And I think chains in general, across the board that really know who they are and what they bring to their audience are those that succeed most.

Ethan Chernofsky: 00:12:06

And this is a sign for us that these players really have a sense of who they are and what they bring to the table.

Chris Walton: 00:12:11

So.

Chris Walton: 00:12:12

So, Ethan, going back to the, to the first award, based on some of the data you shared, I'm curious because this, this, this segment of the year, it kind of flies in the face of the macroeconomic, you know, conditions, right?

Chris Walton: 00:12:23

You know, high inflation, people cutting back on their spend on certain things.

Chris Walton: 00:12:27

But yet here the fitness industry is, you know, for all intents and purposes is still getting that spend.

Chris Walton: 00:12:33

So are you seeing that spend from all demographics, from all age demographics, all income demographics, or is it weighted one direction over another?

Ethan Chernofsky: 00:12:42

I think thus far, when we've done these analyses and these comparisons now, granted to do it really well, you do need to look in each region and understand the differences in each space.

Ethan Chernofsky: 00:12:51

But overall, again, broad strokes, it's fairly across the board.

Ethan Chernofsky: 00:12:54

And I think that's the interesting.

Ethan Chernofsky: 00:12:56

What's so effective about the sector is these brands are puzzle pieces and they're fitting within each individual's ideal fitness mix.

Ethan Chernofsky: 00:13:03

And so the idea that I can be more value oriented via certain chains, I can look for this more holistic country club experience via other chains.

Ethan Chernofsky: 00:13:12

It's creating homes for lots of different segments.

Ethan Chernofsky: 00:13:14

I think so long as expansions and growth is handled intelligently and not, we don't see it overdone.

Ethan Chernofsky: 00:13:21

So if we had to put a flip side of this, we had a skew negative.

Ethan Chernofsky: 00:13:24

I would say that the dollar store segment was probably would be our flip side of segment of the year.

Ethan Chernofsky: 00:13:30

Just because they were riding this wave and then seeing this kind of come down.

Ethan Chernofsky: 00:13:34

And a lot of that is just because too rapid expansion, not a clear sense of like where are we going and why are we going to those places.

Ethan Chernofsky: 00:13:41

And I think so as long as this space avoids that, they're going to see this continued success.

Chris Walton: 00:13:46

Right?

Chris Walton: 00:13:46

So it's Interesting.

Chris Walton: 00:13:47

So it's kind of similar to what we've heard around the travel, that travel and fitness are becoming kind of necessities for people and things that people still want to spend money on and they want to find their, their cutback lanes through other.

Chris Walton: 00:13:58

Other means or other vehicles.

Chris Walton: 00:13:59

That's.

Chris Walton: 00:14:00

That's really interesting.

Chris Walton: 00:14:01

All right, what's number three?

Chris Walton: 00:14:02

What's the third award you're handing out?

Ethan Chernofsky: 00:14:04

This is the favorite data point of the year.

Chris Walton: 00:14:07

Oh, my God.

Ethan Chernofsky: 00:14:09

It's a tie.

Ann Mazinga: 00:14:10

You're the only one giving this award.

Ann Mazinga: 00:14:12

You're the only one giving this award.

Chris Walton: 00:14:13

Data point of the year.

Ethan Chernofsky: 00:14:15

This is, this is.

Ethan Chernofsky: 00:14:18

I'm kind of giving this award to.

Ethan Chernofsky: 00:14:20

To the data itself and because I don't think the data itself ever gets to win the award.

Ethan Chernofsky: 00:14:25

And there's two, but for two different reasons.

Ethan Chernofsky: 00:14:27

The one.

Ethan Chernofsky: 00:14:27

Okay, the one with the map is visits alongside the full solar eclipse that took place in April.

Ethan Chernofsky: 00:14:36

And the reason we love this data point so much is look how beautifully you see that rise in visits compared to exactly where the path of the eclipse was.

Ethan Chernofsky: 00:14:45

It's just like a stunning example of data visualization.

Ethan Chernofsky: 00:14:49

But also when we kind of look at retailers or restaurant groups within the space to see how some of those really leaned into the success, like Warby Parker, you know, offering those free.

Ethan Chernofsky: 00:14:59

See the eclipse glasses, Krispy Kreme, a specific kind of donut, and the lift and visits that came from it.

Ethan Chernofsky: 00:15:04

Something that we really love.

Ethan Chernofsky: 00:15:06

The second, and this is this, this is where if I had to like leave someone off the stage, I would still err that this is my favorite is the return in visits for home furnishings and consumer electronics.

Ethan Chernofsky: 00:15:18

And here is why.

Ethan Chernofsky: 00:15:20

If you look at conference board consumer confidence index that was re.

Ethan Chernofsky: 00:15:26

ver month jump since March of: 2021

Ethan Chernofsky: 00:15:36

Why is this interesting?

Ethan Chernofsky: 00:15:37

Because we have been looking at consumer electronics and home furnishings as an early indicator for consumer certainty is what we call it.

Ethan Chernofsky: 00:15:43

We don't call it consumer confidence returning.

Ethan Chernofsky: 00:15:45

And what we've said is these are big purchases and they're purchases that can very often be delayed.

Ethan Chernofsky: 00:15:50

And as a result, if we see the visits returning there, we're getting a sense the consumer is getting more comfortable with larger purchases.

Ethan Chernofsky: 00:15:56

And so that as an early indicator and then seeing consumer confidence come back shortly thereafter for us made this one of our favorites because we do think some of these behavioral patterns do give us an insight into the where the consumer is at.

Ethan Chernofsky: 00:16:09

Even A little bit before the consumer recognizes that they're there.

Chris Walton: 00:16:14

Interesting.

Chris Walton: 00:16:14

And which one?

Chris Walton: 00:16:15

Which one?

Chris Walton: 00:16:15

If you had to pick, which one of these two would you pick?

Chris Walton: 00:16:17

I'm going with the map because the map.

Chris Walton: 00:16:18

The map to Ethan's point is so stunning.

Chris Walton: 00:16:21

I think that's the way I'm going with.

Ann Mazinga: 00:16:23

Yeah, that's surprising.

Ann Mazinga: 00:16:25

I didn't realize so many people cared about the eclipse, but clearly the data has proven us wrong.

Ann Mazinga: 00:16:29

about this spike in August of: 2024

Ann Mazinga: 00:16:34

Like, what drove that?

Chris Walton: 00:16:35

Quite a spike.

Ethan Chernofsky: 00:16:36

Yeah, it was.

Ethan Chernofsky: 00:16:37

It was.

Ethan Chernofsky: 00:16:37

I mean, well, it's.

Ethan Chernofsky: 00:16:38

It's.

Ethan Chernofsky: 00:16:38

To be clear, it's like about 6 or 7%.

Ethan Chernofsky: 00:16:40

Like, it's.

Ethan Chernofsky: 00:16:40

It's not as massive it looks just compared to the.

Ethan Chernofsky: 00:16:42

To the decline.

Ethan Chernofsky: 00:16:43

But I think a lot of it was time available.

Ethan Chernofsky: 00:16:45

So it's August, so we can go look and, you know, a trip to.

Ethan Chernofsky: 00:16:48

To kind of a home goods, et cetera.

Chris Walton: 00:16:50

It's.

Ethan Chernofsky: 00:16:50

It's a little bit more lengthy.

Ethan Chernofsky: 00:16:52

It's a little bit harder to do.

Ethan Chernofsky: 00:16:53

So that.

Ethan Chernofsky: 00:16:53

That was part of it.

Ethan Chernofsky: 00:16:54

But I do think a big piece of this is just, hey, this is a purchase that we're back to considering.

Ethan Chernofsky: 00:16:59

Right.

Chris Walton: 00:16:59

It's.

Ethan Chernofsky: 00:16:59

It's not, oh, we're maybe next year because we're so worried about what the economic situation is.

Ethan Chernofsky: 00:17:04

It's something that we're back to thinking about significantly again.

Ethan Chernofsky: 00:17:06

Like, we don't normally go to furniture stores for fun, like some people do, but I don't think most people do.

Ethan Chernofsky: 00:17:13

And so I think that visit is a super significant sign of intent.

Chris Walton: 00:17:17

And I have had that argument a lot.

Chris Walton: 00:17:19

I think she's coming around.

Chris Walton: 00:17:20

I think she agrees with us now that no one actually wants to go furniture shopping that often.

Chris Walton: 00:17:25

But.

Chris Walton: 00:17:26

But, yeah, but it's interesting that it's interesting that it's definitely reversing the trend.

Ann Mazinga: 00:17:30

All right, Ethan, what's next on the list?

Ethan Chernofsky: 00:17:33

Next is most important takeaway of the year.

Ann Mazinga: 00:17:37

Okay.

Ethan Chernofsky: 00:17:37

Okay.

Ethan Chernofsky: 00:17:38

This is.

Ethan Chernofsky: 00:17:38

This is a significant one.

Ethan Chernofsky: 00:17:40

So cross shopping is up, right?

Ethan Chernofsky: 00:17:44

Cross visitation with brands is up.

Ethan Chernofsky: 00:17:46

We talked about this before.

Ethan Chernofsky: 00:17:48

For brands, especially specialty grocery or brands like Trader Joe's, the share of visits that are coming from longer distances is increasing significantly.

Chris Walton: 00:17:58

Yep.

Ethan Chernofsky: 00:18:00

Visit duration in a lot of segments is down.

Ethan Chernofsky: 00:18:03

Groceries, superstores, et cetera.

Ethan Chernofsky: 00:18:05

So we have more visitation.

Ethan Chernofsky: 00:18:06

We have more cross visitation, people willing to go further and spending less time in a specific store, even when you have the capacity to do a lot of things in that one store.

Ethan Chernofsky: 00:18:15

And that tells us about our favorite Takeaway that convenience is massively overrated.

Ethan Chernofsky: 00:18:23

I didn't say it's not important, but it's massively overrated.

Ethan Chernofsky: 00:18:27

And I think it tells us a lot about where retail is going and where we need to look at for significant retail innovation.

Ethan Chernofsky: 00:18:34

So if, and again, if this is in Forbes immediately after the post pandemic retail environment, confidence is king.

Ethan Chernofsky: 00:18:41

But no, it's not.

Ethan Chernofsky: 00:18:42

At best, if we use like a deck of cards, it's a 10 or a jack, but it is not king and it's certainly not an ace.

Chris Walton: 00:18:48

Confidence or convenience, Ethan?

Ethan Chernofsky: 00:18:50

Convenience.

Ethan Chernofsky: 00:18:51

Excuse me, you meant convenience.

Chris Walton: 00:18:52

Okay.

Ethan Chernofsky: 00:18:52

Convenience is king.

Chris Walton: 00:18:53

Okay.

Ethan Chernofsky: 00:18:53

I think confidence is great.

Chris Walton: 00:18:54

Confidence is great.

Chris Walton: 00:18:55

Yeah.

Chris Walton: 00:18:55

Don't get me wrong.

Ethan Chernofsky: 00:18:56

I love confidence, but you match convenience.

Chris Walton: 00:18:58

Okay?

Ethan Chernofsky: 00:18:58

Confidence is getting the next award.

Chris Walton: 00:19:00

All right.

Ethan Chernofsky: 00:19:01

But I think loyalty is and share of kind of shopper list.

Ethan Chernofsky: 00:19:08

Those are the battlegrounds.

Ethan Chernofsky: 00:19:09

So, right, if we sat in a pandemic environment where, all right, visits were going to be harder to come by, but once I had them in my four walls, I was going to drive a significant basket, right?

Ethan Chernofsky: 00:19:19

That's changed and it's changed fairly dramatically.

Ethan Chernofsky: 00:19:21

And it forces innovation to address this new reality where the visit isn't as hard to get, but the significance of the visit is slightly less.

Ethan Chernofsky: 00:19:31

So I need to take significant steps in order to drive a larger basket size and get the consumer to spend more within my four walls.

Ethan Chernofsky: 00:19:39

Drive that loyalty, drive that kind of wallet share, et cetera.

Chris Walton: 00:19:42

I, the, the one thing I would call it on this slide, too, and I actually wrote it, I put a post out on LinkedIn last week about this was the, the call out of Sprouts is really interesting to me and because, remember, we were out with Sprouts in Phoenix touring some of their new stores, and they talked about this phenomenon that Ethan's bringing up very deliberately.

Chris Walton: 00:19:58

They said, look, we know we're going to need to get that extra trip.

Chris Walton: 00:20:02

You know, we know that.

Chris Walton: 00:20:03

We know that no one's going to do all their shopping with us.

Chris Walton: 00:20:05

So how do we think about our real estate strategy in a way that complements that, that still makes it convenient.

Chris Walton: 00:20:11

So convenience is still a part of it for the shopper.

Chris Walton: 00:20:13

Right.

Chris Walton: 00:20:14

Where these stores are located still matters because you don't want to make them drive too far.

Chris Walton: 00:20:18

But that was a deliberate part of how Sprouts is thinking about this and, and the way they're doing their stores, you know, to your question and like, what are they doing here?

Chris Walton: 00:20:26

They've been doing a great job with that and they're kind of My sleeper for what I wrote in the LinkedIn post is they're kind of my sleeper for retailer of the year right now because they have, they have been killing it.

Chris Walton: 00:20:35

And I see, you know, given what's been happening with Whole Foods, I see there's a lot of on ramp here for them to continue to do really well, particularly when you're looking at this data that Ethan shared.

Chris Walton: 00:20:43

I don't know.

Chris Walton: 00:20:44

Ethan, any thoughts on that?

Ethan Chernofsky: 00:20:45

No, I totally agree with you.

Ethan Chernofsky: 00:20:47

I think there is.

Ethan Chernofsky: 00:20:47

There is a new scenario evolving and I think it's very different from what we've experienced the last few years where there were certain things we had grown accustomed to.

Ethan Chernofsky: 00:20:56

And I think retailers like Sprouts are certainly getting ahead of it.

Ann Mazinga: 00:21:00

Well, and I think, Chris, you call out an important point here about what Sprouts is doing that was kind of getting to my earlier question to Ethan is like, what are they doing to capture more of the basket once you do get them to that trip?

Ann Mazinga: 00:21:11

And we know Sprouts is really heavily invested in like featuring new products and a constantly rotating array of, you know, products that are especially going to get that next generation of consumer in.

Ann Mazinga: 00:21:22

So I'm curious if we'll start to see more of that even from like Trader Joe's for example, which we know is a beloved brand, but, um, but we don't see the innovation like Chris is talking about with the, the change to stores at least.

Ann Mazinga: 00:21:35

I feel like we haven't seen that to the level that Sprouts has done it so far.

Chris Walton: 00:21:38

All right, Ethan, let's keep rolling.

Chris Walton: 00:21:39

What's next?

Ethan Chernofsky: 00:21:41

I couldn't not.

Chris Walton: 00:21:43

Fuzziest topic.

Chris Walton: 00:21:44

I love this one.

Ethan Chernofsky: 00:21:45

Fuzziest topic.

Ethan Chernofsky: 00:21:46

I think the winner is retail media.

Ethan Chernofsky: 00:21:48

We were, we were collectively, the three of us had the joy of going to grocery shop together and if you walk the exhibition floor.

Ethan Chernofsky: 00:21:55

But 50% of it was dedicated to brands that were.

Ethan Chernofsky: 00:21:58

Or technology providers that were focused on retail media.

Ethan Chernofsky: 00:22:01

The buzz around this topic is very legitimate and very real.

Ethan Chernofsky: 00:22:04

And the reasons are because there's huge upside, right?

Ethan Chernofsky: 00:22:07

People are in discovery mode.

Ethan Chernofsky: 00:22:08

You can guide the journey.

Ethan Chernofsky: 00:22:09

There's high margin revenue.

Ethan Chernofsky: 00:22:11

It doesn't feel super complex to get from point A to point B.

Ethan Chernofsky: 00:22:16

Like it's not like a gigantic technological leap.

Ethan Chernofsky: 00:22:19

Like most of the things we need exist today.

Ethan Chernofsky: 00:22:22

And so there is a ton of excitement.

Ethan Chernofsky: 00:22:24

With that said, it's not our favorite topic or I wouldn't call it trend of the year because there are risks.

Ethan Chernofsky: 00:22:30

And I don't think we're properly acknowledging the risk.

Ethan Chernofsky: 00:22:33

And this has Become kind of the very significant footnote that we try to add.

Ethan Chernofsky: 00:22:39

We are at least I personally, massive believer in this trend and why it's so exciting.

Ethan Chernofsky: 00:22:45

And again, the overhyped trends are coming in just a second, just to tease that one more time.

Ethan Chernofsky: 00:22:49

But there are.

Chris Walton: 00:22:50

So this is just buzzy.

Chris Walton: 00:22:51

It's not overhyped.

Chris Walton: 00:22:52

Hold on.

Chris Walton: 00:22:52

I want to make sure I understand that.

Chris Walton: 00:22:54

Okay.

Chris Walton: 00:22:54

Okay.

Ethan Chernofsky: 00:22:55

I'm not.

Chris Walton: 00:22:55

It's close to being overhyped, but not quite overhyped.

Chris Walton: 00:22:58

Okay.

Ethan Chernofsky: 00:22:58

a contender for overhyped in: 2025

Ethan Chernofsky: 00:23:01

But I'm not.

Ethan Chernofsky: 00:23:02

I'm not there yet.

Ethan Chernofsky: 00:23:03

I'm not.

Chris Walton: 00:23:03

This is the B in the animal kingdom of headlines.

Chris Walton: 00:23:06

That's what you're of superlative awards.

Chris Walton: 00:23:08

Okay.

Ethan Chernofsky: 00:23:09

Because it's.

Ethan Chernofsky: 00:23:10

The problem is it still is so exciting and it.

Ethan Chernofsky: 00:23:13

There are important steps being taken and it does have significant potential.

Ethan Chernofsky: 00:23:17

And I just think that we need to like acknowledge real risk.

Ethan Chernofsky: 00:23:20

Right.

Ethan Chernofsky: 00:23:20

And the real risks are.

Ethan Chernofsky: 00:23:22

I think there's a good.

Ethan Chernofsky: 00:23:24

One of the risks is less concerning.

Ethan Chernofsky: 00:23:25

To me, two of the risks are very concerning.

Ethan Chernofsky: 00:23:27

The risk that is less concerning is the idea that it's going to be annoying.

Ethan Chernofsky: 00:23:30

I think what we've seen, there's a lot of polling around this is it actually contributes to the discovery journey.

Ethan Chernofsky: 00:23:35

It's not super annoying.

Ethan Chernofsky: 00:23:35

Like we're learning that lesson from that and those initial iterations of retail media in the digital environment.

Ethan Chernofsky: 00:23:41

But I think there are two things that do concern me.

Ethan Chernofsky: 00:23:44

One is the idea of accessibility.

Ethan Chernofsky: 00:23:46

Like it can't be 85 different networks.

Ethan Chernofsky: 00:23:49

There needs to be a single point to then enter a lot of them.

Ethan Chernofsky: 00:23:52

Otherwise everyone's going to focus on Walmart, the huge ones, you know, the Albertsons Kroger combo.

Ethan Chernofsky: 00:23:57

But you're not going to get to all of this kind of long tail that exists.

Ethan Chernofsky: 00:24:00

And then the last bit, and this concerns me even more after seeing some of these providers, is the solution can't be too digital.

Ethan Chernofsky: 00:24:07

Like, we need to understand the difference between the physical environment and the digital environment and embrace the fact that physical stores bring very significant value.

Ethan Chernofsky: 00:24:17

They don't do what digital does well.

Ethan Chernofsky: 00:24:18

Digital does incredible things, but it doesn't do what physical does well.

Ethan Chernofsky: 00:24:21

And the more we try to turn the store into a digital environment or a digital environment into the store, eg, the Metaverse, it doesn't actually work Right.

Ethan Chernofsky: 00:24:30

And that's because of technological gaps.

Ethan Chernofsky: 00:24:32

It's because what the consumer is expecting and looking for.

Ethan Chernofsky: 00:24:34

And so we really need to kind of lean in.

Ethan Chernofsky: 00:24:37

Like, I'm not a huge fan of like everything being a QR code, are there certain things that are great for it?

Ethan Chernofsky: 00:24:43

Yeah, but yeah, keep me in the physical environment, give me the support that enhance it, but don't take me out of what makes that environment unique and special.

Chris Walton: 00:24:52

Why is Sam's Club picked out on this in this, in this graphic particularly?

Chris Walton: 00:24:57

Just out of curiosity.

Ethan Chernofsky: 00:24:57

I mean we could have done anything but we wanted to show here.

Ethan Chernofsky: 00:24:59

It's like one of the things I love most about retail media is the idea of new forms of segmentation.

Ethan Chernofsky: 00:25:04

So we work with a lot of, we work with advertising companies, we work with brands, we work with retailers.

Ethan Chernofsky: 00:25:09

And one of the interesting things is how often they look at cuts of retail from a very simplistic form of like, hey, stores that are in the Northeast, stores that are in the Southeast, and stores that are in the Southeast operate this way.

Ethan Chernofsky: 00:25:22

And it's like, well, that's actually not the ideal way to think about inventory, especially from an advertising perspective.

Ethan Chernofsky: 00:25:27

So this is Sam's Clubs, locations that are over indexed for wealthy suburban families.

Ethan Chernofsky: 00:25:30

Right.

Ethan Chernofsky: 00:25:31

If I know that those are the Sam Clubs, I want to do my retail media through and I want to have certain product mixes within.

Ethan Chernofsky: 00:25:36

And so I think that kind of, that is the perspective we're bringing to the table here.

Chris Walton: 00:25:40

Yeah, interesting.

Chris Walton: 00:25:40

So, yeah, you know, my takeaway from this too is like as and like we talked about on our show recently too, particularly because this has been in the news a lot like the manifestation of retail media in the store.

Chris Walton: 00:25:49

You've got Sam's Club trying to, you know, force scan and go usage in its Grapevine Texas store, putting items on display that you can't buy in the store, you can only buy through your smartphone and have them delivered to your house.

Chris Walton: 00:26:00

You got Amazon thinking people are going to walk Whole Foods and buy Pepsi while they're shopping the aisles on their phone.

Chris Walton: 00:26:07

So Ethan, my take is that you're not as big, you're like us, you're not as big on that type of thing.

Chris Walton: 00:26:12

Particularly the latter as probably Amazon would be as an example.

Ethan Chernofsky: 00:26:17

No, I think, I don't think we do enough.

Ethan Chernofsky: 00:26:22

We take enough time to say, hey, what does the consumer actually want?

Ethan Chernofsky: 00:26:26

What's going to make their life better?

Ethan Chernofsky: 00:26:28

And I don't know.

Ethan Chernofsky: 00:26:30

Again, I've gone into a Target and bought a Starbucks and been super thrilled with that and walked a store with my coffee and loved it.

Ethan Chernofsky: 00:26:38

But I don't know that when I go to the supermarket I'm like, I really need a, need a, need a Pepsi right now.

Ethan Chernofsky: 00:26:43

Especially since There is Pepsi in the store and if I really want to, I can just grab it and I'm like, you know, check it out and pay.

Ethan Chernofsky: 00:26:48

Like I don't know that.

Ethan Chernofsky: 00:26:49

It's solving a huge need.

Chris Walton: 00:26:51

Which goes back to the routine trips of the previous slide.

Chris Walton: 00:26:54

Right.

Chris Walton: 00:26:54

Like people are going to have the routines of which stores they're going to shop at.

Chris Walton: 00:26:57

And breaking through, that's going to be really challenging.

Chris Walton: 00:26:59

That's interesting, Ethan.

Ann Mazinga: 00:27:01

Let's go on to the next one.

Ethan Chernofsky: 00:27:02

Most overrated innovation.

Ethan Chernofsky: 00:27:04

Now, it doesn't have to do with album specifically, but it doesn't have to do with just walk out technology.

Chris Walton: 00:27:09

Yeah.

Ann Mazinga: 00:27:11

All right.

Chris Walton: 00:27:12

I like there was, look.

Ethan Chernofsky: 00:27:16

Please don't tell anybody, even though there's an audience.

Ethan Chernofsky: 00:27:19

I worked in Blockchain.

Ethan Chernofsky: 00:27:20

I remember when everyone was excited about that and I was like, did people not see how unevolved the technology is yet?

Ethan Chernofsky: 00:27:27

I saw the metaverse up close, never really believed in it.

Ethan Chernofsky: 00:27:30

Now just walk out though, takes the cake for me.

Ethan Chernofsky: 00:27:33

And the reason it takes the cake is because there's a way where just walk out fuels something super exciting.

Ethan Chernofsky: 00:27:42

But I think we were convinced that like the most important thing is people don't want to waste time going to the cashier.

Ethan Chernofsky: 00:27:48

Like that is this significant friction.

Chris Walton: 00:27:51

Right.

Ethan Chernofsky: 00:27:51

But I don't think it really was.

Ethan Chernofsky: 00:27:53

If we had been told that, look, we want to get more data about the store, we want to understand what's going on.

Ethan Chernofsky: 00:27:58

Just walk out is something that facilitates that that's what we're going to.

Ethan Chernofsky: 00:28:02

That's where it's going to drive the revenue that's going to fund this project.

Ethan Chernofsky: 00:28:05

And it's going to work for the people it works for and we're still going to have cashiers.

Ethan Chernofsky: 00:28:08

I'm all in.

Ethan Chernofsky: 00:28:09

I think it's great.

Ethan Chernofsky: 00:28:10

But this idea that like what's really bothering me as a consumer is the cashier I think has been proven to be not true.

Ann Mazinga: 00:28:20

Right.

Ethan Chernofsky: 00:28:21

The question now that is kind of set up for us is do we see this kind of segment abandoned and I hope we don't, or do we see it done more intelligently?

Ethan Chernofsky: 00:28:31

So like, I think small, like bodega esque retail experiences, like what you see in like the Amazons within the airport, that's super cool.

Ethan Chernofsky: 00:28:40

I think that makes a lot of sense in major cities.

Ethan Chernofsky: 00:28:43

Super cool makes a lot of sense.

Ethan Chernofsky: 00:28:45

But if it's going to come to these larger format grocery stores, it needs to be done within a wider perspective.

Ethan Chernofsky: 00:28:51

And I think, you know, at this stage we have to call it for what it Is the just walk out trend just didn't live up to the potential.

Chris Walton: 00:28:58

Yeah.

Ann Mazinga: 00:28:59

Ethan, I think you do a really good job of calling this out because I think that the issue, one of the issues here was that I think we assumed that the convenience like you talked about earlier, that convenience was really what was going to drive these trips.

Ann Mazinga: 00:29:11

And what we're finding out is that for this, the staying power here, it that you know, you have to have the right assortment, you still have to have the right products, which is challenging in an environment that has just walk out technology.

Ann Mazinga: 00:29:23

So I think you're 100% right.

Ann Mazinga: 00:29:25

When we're talking about the bodegas, the smaller, you know, airport convenience stores, this does still make sense because convenience is key here versus these bigger shopping trips where you, you really want to have the quality of product first and then the convenience is a secondary aspect almost.

Ethan Chernofsky: 00:29:43

Yeah, absolutely.

Ethan Chernofsky: 00:29:44

Especially since like, I mean what's the amount of time you need to save for it to move the needle?

Ethan Chernofsky: 00:29:49

And we talked about this with conveniences camping.

Ethan Chernofsky: 00:29:51

But I do think that like measure of like, I think convenience is binary.

Ethan Chernofsky: 00:29:54

Like if I'm going to, and it's depending on what I'm, what I'm looking to buy.

Ethan Chernofsky: 00:29:58

But if I'm going to the grocery store, I'm willing to go X number of minutes for a product, a certain type of product and I'm not willing to go past that.

Ethan Chernofsky: 00:30:06

But anything within that catchment area is where I'm willing to go.

Ethan Chernofsky: 00:30:09

It's not as simple as like, oh, I'll go to the place that's the most convenient.

Ethan Chernofsky: 00:30:12

And so I think once we kind of ask ourselves that question, like what is that?

Ethan Chernofsky: 00:30:16

That threshold, that's where we get to a much more effective understanding of what convenience needs to mean and we don't overvalue it.

Chris Walton: 00:30:25

Yeah, I mean I've never thought about this before, but this kind of swy.

Chris Walton: 00:30:28

I love doing this show too because you get these epiphanies in the moment.

Chris Walton: 00:30:31

But you know, at the end of the day the beauty of, the beauty of the just walk out technology is actually the computer vision cameras that are understanding everything that's happening in the store so you can process the data and better personalize the experience to your customer.

Chris Walton: 00:30:44

The just walk out aspect of it is almost marginal.

Chris Walton: 00:30:48

Right.

Chris Walton: 00:30:48

It's, it's, it's almost, it's, it's, it's in comparison to like self checkout, there's not that big of an upgrade on that.

Chris Walton: 00:30:54

So.

Chris Walton: 00:30:54

So in a lot of ways when I step back from this conversation.

Chris Walton: 00:30:56

I think the biggest disservice Amazon might have done was calling it the just walk out technology.

Chris Walton: 00:31:01

Had they named it like the smart store technology of the future or some stupid thing like that that I'm coming up with off the top of my head, would we have seen more traction with it versus this gimmicky just walk out idea, which to your point, and I think still is applicable in event spaces and possibly at airports.

Chris Walton: 00:31:18

Although I think the question is still there because it's hard for people to acclimate towards it, especially with self checkout, even at airports.

Chris Walton: 00:31:24

So.

Chris Walton: 00:31:24

So, yeah, I don't, I don't know what you guys think about that, but I never thought about that.

Chris Walton: 00:31:27

Like, did they just market this wrong?

Chris Walton: 00:31:29

You know, is that, Is that what we're seeing here?

Chris Walton: 00:31:31

I don't know.

Ethan Chernofsky: 00:31:32

That's what I thought at one point.

Ethan Chernofsky: 00:31:33

I was like, pretty anti.

Ethan Chernofsky: 00:31:35

Just walk out for a while.

Ethan Chernofsky: 00:31:36

And then.

Ethan Chernofsky: 00:31:37

And I.

Ethan Chernofsky: 00:31:38

And then I was having a conversation with a major brand that was talking about their inability to really have a deep understanding of what's happening in the four walls of the store.

Ethan Chernofsky: 00:31:46

And I had kind of the epiphany you did, Chris.

Ethan Chernofsky: 00:31:49

But I just thought I was missing the point.

Ethan Chernofsky: 00:31:51

I was like, oh, that's what they're.

Ethan Chernofsky: 00:31:53

That's what they're building, clearly.

Ethan Chernofsky: 00:31:55

And I was like, this is genius.

Ethan Chernofsky: 00:31:57

Hats off.

Ethan Chernofsky: 00:31:57

But I think it was.

Ethan Chernofsky: 00:31:59

I think in some cases, maybe that was what they were going.

Ethan Chernofsky: 00:32:01

It's.

Ethan Chernofsky: 00:32:01

It's possible.

Ethan Chernofsky: 00:32:02

And we'll see kind of new iterations of it.

Ethan Chernofsky: 00:32:04

But I think there is a massive opportunity in terms of understanding what's happening in the store.

Ethan Chernofsky: 00:32:09

How are people moving?

Ethan Chernofsky: 00:32:10

What are all the things I can glean from that journey?

Ethan Chernofsky: 00:32:13

I think it's a huge play, but yeah, I don't think it's about.

Chris Walton: 00:32:16

Yeah.

Chris Walton: 00:32:17

And there's.

Chris Walton: 00:32:17

And there's much more efficient and less capitally intensive ways to get that same data via computer vision that is robots, as an example.

Chris Walton: 00:32:24

All right, let's keep rolling.

Chris Walton: 00:32:25

What's next?

Ethan Chernofsky: 00:32:26

Last one.

Ethan Chernofsky: 00:32:28

Biggest surprise from: 2024

Ann Mazinga: 00:32:32

Okay.

Ethan Chernofsky: 00:32:33

I call out at the beginning of every year.

Ethan Chernofsky: 00:32:37

Oh, by the way, it's a lie.

Ethan Chernofsky: 00:32:40

There's two more left.

Ethan Chernofsky: 00:32:41

There's this one and one more.

Chris Walton: 00:32:42

Okay.

Ethan Chernofsky: 00:32:43

We call out at the beginning of every year what we think is going to succeed, but we also call that.

Ethan Chernofsky: 00:32:47

And we did it together.

Ethan Chernofsky: 00:32:48

The three of us call out what we think is in is going to face trouble in the year to come.

Ethan Chernofsky: 00:32:52

And I had theaters as a segment that was going to have a Very rough year.

Chris Walton: 00:32:58

That's right.

Chris Walton: 00:32:58

We did.

Chris Walton: 00:32:59

Yeah.

Ethan Chernofsky: 00:32:59

I thought the stars were aligned against them.

Ethan Chernofsky: 00:33:01

Right.

Ethan Chernofsky: 00:33:02

It was headwinds, it was the writers strike.

Ethan Chernofsky: 00:33:05

And the standard set in: 2023

Ethan Chernofsky: 00:33:09

And Barbenheimer and Taylor Swift and Beyonce.

Ethan Chernofsky: 00:33:12

What could this year possibly bring to the table that would match it?

Ethan Chernofsky: 00:33:15

And in the beginning of the year, I felt really good about myself.

Ethan Chernofsky: 00:33:17

I was like, ethan, good call.

Ethan Chernofsky: 00:33:19

But then the summer hit Inside out too, and Deadpool and Wolverine and Twisters and all these other kind of remakes just crushed.

Ethan Chernofsky: 00:33:30

And they brought significant visits.

Ethan Chernofsky: 00:33:32

And one, I think it's worth calling out just how impactful this segment has been when again, we all called it for dead, or not all of us, but many called it for dead just a few years ago.

Ethan Chernofsky: 00:33:43

And I think it speaks to this still risk because obviously the experience needs to continue to evolve.

Ethan Chernofsky: 00:33:51

A movie theater is not what it was 10 years ago.

Ethan Chernofsky: 00:33:53

And it must continue to embrace this idea of it's like a day out.

Ethan Chernofsky: 00:33:57

There's something exciting about it.

Ethan Chernofsky: 00:33:58

It's got to be a, you know, more interesting, better seating, more food options.

Ethan Chernofsky: 00:34:02

It's got to be a reason to go.

Ethan Chernofsky: 00:34:05

But there is life there that I don't think we gave credit for.

Ethan Chernofsky: 00:34:08

And certainly I even.

Ethan Chernofsky: 00:34:09

I was super excited about the segment, and I think I underestimated it quite a bit.

Ethan Chernofsky: 00:34:13

But.

Chris Walton: 00:34:14

But hold on a sec.

Chris Walton: 00:34:15

Net.

Chris Walton: 00:34:15

Net.

Chris Walton: 00:34:15

When I'm looking at this graphic, were you wrong?

Chris Walton: 00:34:17

I mean, they had a couple months where they were doing better than the year before, but, like, overall, I mean, this is not a pretty picture on this page.

Chris Walton: 00:34:24

Right.

Ethan Chernofsky: 00:34:24

I mean, that return to, like, prominence, I think, with all of the negatives.

Ethan Chernofsky: 00:34:28

Like, I'm a big believer in, like, hey, we got to judge things within context.

Ethan Chernofsky: 00:34:32

And so, like, sometimes things decline.

Ethan Chernofsky: 00:34:34

Right.

Ethan Chernofsky: 00:34:34

You have, like, unique performance.

Chris Walton: 00:34:36

So you're saying they can buck the trend.

Chris Walton: 00:34:38

Okay, I got you.

Ethan Chernofsky: 00:34:39

I think they were.

Ethan Chernofsky: 00:34:39

The fact that they were able to in August when we're comping it to, like, Barbie.

Chris Walton: 00:34:44

Yeah, right.

Ethan Chernofsky: 00:34:45

Taylor Swift, Beyonce.

Ethan Chernofsky: 00:34:47

That's a pretty significant achievement.

Chris Walton: 00:34:50

It's not necessarily an industry in decline.

Chris Walton: 00:34:52

Okay.

Chris Walton: 00:34:53

Yes, exactly.

Chris Walton: 00:34:54

Gotcha.

Chris Walton: 00:34:54

Gotcha.

Chris Walton: 00:34:55

Okay.

Chris Walton: 00:34:55

All right, all right.

Ann Mazinga: 00:34:56

Ethan, you said you have one more for us.

Ethan Chernofsky: 00:34:58

It's the biggest sneaky upside retailer to watch out for.

Ethan Chernofsky: 00:35:02

This is the long story.

Chris Walton: 00:35:03

Upside retailer.

Ann Mazinga: 00:35:04

Yeah, this is.

Ethan Chernofsky: 00:35:06

This is what the Oscars get wrong.

Ethan Chernofsky: 00:35:08

It's all their awards are too shortly named.

Ann Mazinga: 00:35:11

Yes, clearly not.

Ethan Chernofsky: 00:35:12

Here.

Ethan Chernofsky: 00:35:13

We don't mess up.

Ethan Chernofsky: 00:35:14

We know as long of a name as it demands, we bring in more.

Chris Walton: 00:35:18

Words at Omnitalk Retail.

Ethan Chernofsky: 00:35:20

Yes, yes.

Ethan Chernofsky: 00:35:21

And my sneaky upside retailer to watch out for is Macy's.

Ethan Chernofsky: 00:35:26

But also I'm going to widen it, the department store sector.

Ethan Chernofsky: 00:35:29

And there's a few reasons and I know.

Chris Walton: 00:35:31

Oh, my God.

Chris Walton: 00:35:32

Okay.

Chris Walton: 00:35:32

Oh, my God.

Chris Walton: 00:35:33

Yeah, you are.

Ethan Chernofsky: 00:35:34

We need to go bold, right?

Ethan Chernofsky: 00:35:35

So one, I think we're seeing again, when we talked about this on this, on, on this program of the bifurcation of retail.

Ethan Chernofsky: 00:35:43

If that's true and then we're seeing some of the challenges there and the moves to luxury and value, then there's the opportunity exists in the middle.

Ethan Chernofsky: 00:35:49

I think that is a piece.

Ethan Chernofsky: 00:35:51

I think a greater focus on curation.

Ethan Chernofsky: 00:35:53

Like, you see Macy's really talk up this idea that they're trying to improve their mix.

Ethan Chernofsky: 00:35:57

What they have there, how they draw people to the stores.

Ethan Chernofsky: 00:35:59

Focusing on kind of upgrading the locations that they have, I think is a big part of it.

Ethan Chernofsky: 00:36:03

And I think the right sizing efforts are going to start to stabilize where the right locations are kept.

Ethan Chernofsky: 00:36:08

And what we've seen when we look into the data, a lot of these right sizing efforts made a ton of sense.

Ethan Chernofsky: 00:36:12

Like they weren't.

Ethan Chernofsky: 00:36:13

It's not about closing a location.

Ethan Chernofsky: 00:36:14

It's about figuring out how many locations do you need in a specific area.

Ethan Chernofsky: 00:36:18

And we've seen a lot of that work.

Ethan Chernofsky: 00:36:19

So a lot of the areas, stores that are getting closed, there was a lot of cannibalization with other locations of the same chain.

Ethan Chernofsky: 00:36:25

So I think those efforts altogether speak to this sneaky upside.

Ethan Chernofsky: 00:36:30

I would, I would be clear that this is the biggest sneaky upside retailer to watch out for.

Ethan Chernofsky: 00:36:34

This is not the.

Ethan Chernofsky: 00:36:35

Oh, this version is going to be the best retailer next year.

Ethan Chernofsky: 00:36:37

But I do think there is a rebound on its way.

Ethan Chernofsky: 00:36:41

And I hope this is not like my Bed, Bath and Beyond.

Ann Mazinga: 00:36:44

Yeah.

Ann Mazinga: 00:36:45

Or Staples.

Ethan Chernofsky: 00:36:47

I wanted to use staples too, but.

Chris Walton: 00:36:49

I know I have no doubt double down on staples.

Chris Walton: 00:36:52

Oh, my God.

Ethan Chernofsky: 00:36:53

Giving up on staples.

Ann Mazinga: 00:36:57

Okay.

Ann Mazinga: 00:36:58

Well, Ethan, sneaky upside.

Ann Mazinga: 00:37:01

I mean, I feel like we need a whole podcast to just, just to like define what sneaky upside means.

Ann Mazinga: 00:37:06

Exactly.

Ann Mazinga: 00:37:06

But I think you do make some good points.

Ann Mazinga: 00:37:08

Like, Macy's is really focused right now.

Ann Mazinga: 00:37:11

Like, we just met with their head of pr, Private brands.

Ann Mazinga: 00:37:13

They're really focused on bringing these new brands to get people in to really define who Macy's is as a retailer.

Ann Mazinga: 00:37:20

So I'll be watching it.

Ann Mazinga: 00:37:23

I'll be.

Ann Mazinga: 00:37:24

I can see there might be a sneaky, sneaky comeback here.

Ann Mazinga: 00:37:28

But Chris doesn't look like he's.

Ethan Chernofsky: 00:37:30

That is that is as much support as I could have possibly hoped for.

Chris Walton: 00:37:34

Yeah, right.

Ann Mazinga: 00:37:34

That's about all you're gonna get.

Chris Walton: 00:37:36

Yeah, no, I'm putting.

Chris Walton: 00:37:37

I'm putting Ethan's feet to the fire on this one.

Chris Walton: 00:37:39

So, Ethan.

Chris Walton: 00:37:39

So.

Chris Walton: 00:37:40

So I want to make sure.

Chris Walton: 00:37:40

So what Data Point is telling you that they're the sneakiest retailer to watch in next year?

Chris Walton: 00:37:45

What is.

Chris Walton: 00:37:46

What Data Point is it.

Ethan Chernofsky: 00:37:47

It's super sneaky.

Ethan Chernofsky: 00:37:48

Like, you didn't see this one coming, so.

Chris Walton: 00:37:51

I definitely did not.

Chris Walton: 00:37:52

Yes.

Ethan Chernofsky: 00:37:53

So it's sneaky, but okay, I.

Ethan Chernofsky: 00:37:58

I feel like for it to really be a biggest sneaky upside retailer to watch out for when it has to really embrace, you know, the.

Ethan Chernofsky: 00:38:06

The category, and this is again, one of the classic retail award categories.

Ethan Chernofsky: 00:38:10

It's given out and so to embrace that in full.

Chris Walton: 00:38:14

Okay, got it, got it.

Chris Walton: 00:38:15

Just going out on a limb.

Chris Walton: 00:38:16

You're just going out on a limb.

Ethan Chernofsky: 00:38:17

Look, one day and in the not so distant future, this is going to be a full on award show and people are going to show up in their tuxedos and this is going to be one of the awards we hand out.

Ethan Chernofsky: 00:38:26

I don't know what the symbol is going to be yet.

Chris Walton: 00:38:28

Oh, for sure.

Ethan Chernofsky: 00:38:28

It's going to be great.

Chris Walton: 00:38:30

For sure.

Ethan Chernofsky: 00:38:30

All right.

Chris Walton: 00:38:32

Yes.

Chris Walton: 00:38:32

retailer to watch out for in: 2024

Chris Walton: 00:38:38

I want that on record.

Chris Walton: 00:38:40

And we got to keep that on record.

Chris Walton: 00:38:42

And we are going to revisit that each time next year when we bring Ethan on our show.

Chris Walton: 00:38:46

So awesome.

Ethan Chernofsky: 00:38:47

Short term memory loss.

Ethan Chernofsky: 00:38:48

So, like, I will remember this in a few months, but it'll be great.

Ethan Chernofsky: 00:38:51

Yes, I'm feeling good about it.

Chris Walton: 00:38:53

Predictions are the basis form of journalism.

Chris Walton: 00:38:55

Absolutely.

Chris Walton: 00:38:55

100%.

Ann Mazinga: 00:38:57

Well, Ethan, if people have any questions about this or they'd like to further dig into what sneaky upside means, what is the best way for them to get in touch with you, to get in touch with Placers, to dive into this type of research.

Ethan Chernofsky: 00:39:12

So if you want to get in touch with me, I'm at Ethan Lacer AI.

Ethan Chernofsky: 00:39:15

You can also find me on LinkedIn.

Ethan Chernofsky: 00:39:17

I love getting questions.

Ethan Chernofsky: 00:39:18

I love having conversations.

Ethan Chernofsky: 00:39:19

We've seen so many of them come from this channel.

Ethan Chernofsky: 00:39:21

So always, always happy to have that conversation there.

Ethan Chernofsky: 00:39:24

If you're interested in learning more about Placer, come to Placer AI.

Ethan Chernofsky: 00:39:27

We have a free version of our product.

Ethan Chernofsky: 00:39:29

It's super cool free tools available in a section aptly named Free Tools.

Ethan Chernofsky: 00:39:32

So you can go check that out and get a real taste for what is the data that kind of informs some of these decisions and see what conclusions you might come up for for biggest sneaky outside retailer to watch out for.

Ann Mazinga: 00:39:43

All right.

Ann Mazinga: 00:39:44

Well, that wraps up our show today.

Ann Mazinga: 00:39:46

Thank you so much, Ethan Chernofsky of Placer AI for sitting down with us.

Ann Mazinga: 00:39:51

And to all of you who joined us live on LinkedIn.

Ann Mazinga: 00:39:53

And as always, on behalf of all of us here at omnitalk, be careful out.