The Retail Trends (And Retailers) To Watch In 2025 | Ask An Expert

Summary

Omni Talk Retail Podcast Summary

Episode: The Retail Trends (And Retailers) To Watch In 2025 | Ask An Expert
Release Date: January 26, 2025
Hosts: Chris Walton and Anne Mezzenga
Guest: Ethan Chernofsky, SVP of Marketing at Placer AI

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Introduction

The episode kicks off with hosts Chris Walton and Anne Mezzenga welcoming returning guest Ethan Chernofsky from Placer AI. Ethan brings his extensive knowledge of retail trends to discuss pivotal shifts and emerging retailers to watch as we approach 2025.

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1. The Resurgence of the "Third Place" Concept

Overview:
Ethan highlights the revival of the "third place"—a space outside home and work where people gather, socialize, and engage in leisure activities. This concept is gaining traction across various retail sectors beyond its traditional association with coffee shops like Starbucks.

Key Points:

• Starbucks' Influence:
  Ethan points out that Starbucks, under Brian Niccol, has effectively leveraged the third place concept, enhancing customer engagement and increasing visit durations.
  “Starbucks sees 7% more visits between 3 and 7 pm compared to Duncan's.” [04:25]

• Broad Application:
  Retailers like Barnes & Noble and Macy's are incorporating events and experiences (e.g., book readings, interactive departments) to make their spaces more inviting.
  “Creating areas where customers want to spend more time inherently increases transaction likelihood.” [05:10]

• Strategic Implementation:
  It’s crucial for retailers to tailor the third place experience to their specific environment, ensuring it aligns with their brand and customer expectations.
  “How does the third place fit within your specific retail environment?” [06:21]

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2. Starbucks' Strategic Positioning and Future Prospects

Overview:
Ethan delves into Starbucks' future, emphasizing its robust positioning and expansion strategies that align with emerging retail trends.

Key Points:

• Third Place Success:
  The return to the third place concept is pivotal for Starbucks, especially in suburban areas where return-to-office trends sustain foot traffic.
  “The return of the third place will be very valuable, particularly in suburban environments.” [07:08]

• Expansion Potential:
  Starbucks continues to identify and penetrate markets with less saturation, providing ample growth opportunities.
  “There are still places where Starbucks is not as saturated, and their expansion potential aligns well with these regions.” [07:50]

• Operational Efficiency:
  Enhancing convenience through optimized store operations allows for quick customer turnover, catering to both leisurely visitors and those seeking efficiency.
  “Optimizing the convenience element ensures that customers who want to get in and out quickly can do so effectively.” [07:15]

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3. Calendar Matters: Leveraging Key Shopping Dates

Overview:
Ethan discusses the significance of understanding and leveraging key shopping dates, such as Super Saturday, to maximize retail performance.

Key Points:

• Super Saturday Insights:
  Super Saturday’s performance varies based on its placement in the weekly calendar. For example, December 21st saw different traffic patterns compared to December 23rd.
  “This year's Super Saturday fell on the 21st, but the post-Saturday traffic on the 22nd and 23rd surged due to last-minute holiday shopping.” [10:30]

• Strategic Planning:
  Retailers should analyze the motivations behind peak shopping days to tailor marketing and in-store experiences accordingly.
  “Understanding the drivers of visit motivations allows retailers to message effectively and enhance the in-store experience.” [11:54]

• Operational Adjustments:
  Implementing models like buy online, pickup in-store (BOPIS) can help manage traffic spikes and improve customer satisfaction during peak periods.
  “Creating seamless online-to-offline experiences helps customers transition smoothly from shopping to purchasing.” [11:54]

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4. The Evolution of Malls: From Mall 2.0 to Mall 3.0

Overview:
The conversation shifts to the transformation of traditional malls into experiential hubs, referred to as Mall 3.0, focusing on enhanced customer experiences and diversified tenant mixes.

Key Points:

• Experience-Driven Retail:
  Malls are shifting focus from purely shopping to providing unique experiences, such as interactive promotions and entertainment zones.
  “A mall with a Nintendo promotion, where families engage with classic games, exemplifies the shift towards experience-driven retail.” [15:38]

• Tenant Performance:
  Open-air shopping centers and innovative indoor malls are outperforming traditional anchor stores, indicating a shift in consumer preferences.
  “During Black Friday weekend, many open-air centers outperformed traditional mall anchors in visit trends.” [15:10]

• Strategic Real Estate Management:
  Retailers like Macy's are experimenting with new store formats and locations to adapt to evolving consumer behaviors, though execution remains challenging.
  “Macy's aggressive testing of new concepts underscores their strategic foresight, despite mixed execution outcomes.” [17:53]

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5. Migration Patterns and Retail Opportunities

Overview:
Ethan presents data on net positive migration across U.S. states, highlighting regions where retail expansion may thrive due to population growth and increased disposable incomes.

Key Points:

• Southward Shift:
  Significant population growth in states like Florida, Texas, Arizona, and North Carolina presents new retail opportunities in these burgeoning markets.
  “Florida has seen a 3.6% increase in net positive migration, with Texas and Arizona also experiencing substantial growth.” [21:05]

• Targeted Retail Expansion:
  Retailers should consider expanding into these high-growth areas, aligning their store locations with regions experiencing both population and income growth.
  “Brands should explore opportunities in Dallas, Austin, Miami, and other growing cities to capitalize on their expanding markets.” [21:46]

• Audience Alignment:
  Understanding the demographic and economic profiles of migrating populations ensures that retailers can tailor their offerings to meet local demand.
  “It's not just about the number of movers, but also aligning with where higher disposable incomes are shifting.” [23:40]

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6. Brands to Watch in 2025

Overview:
Ethan identifies several brands poised for significant growth in 2025, each capitalizing on emerging retail trends and consumer behaviors.

a. Sam’s Club

Key Points:

• Value and Loyalty:
  Sam’s Club excels in delivering value and fostering customer loyalty through its membership model.
  “Sam’s Club nails value and loyalty with their business model, positioning them well for future success.” [24:21]

• Strategic Audience Shifts:
  As younger demographics with higher disposable incomes move to suburban areas, Sam’s Club is well-positioned to attract these consumers.
  “New suburban audiences align perfectly with Sam’s Club’s offerings, making them a strong contender for growth.” [24:21]

• Innovation Focus:
  Investment in retail media and in-store innovations enhances Sam’s Club’s market relevance.
  “Their focus on innovation, both in-store and digitally, speaks to their preparedness for future challenges.” [24:21]

b. Home Furnishings: Ashley Furniture and HomeGoods

Key Points:

• Comprehensive Comeback:
  Ashley Furniture and HomeGoods are leading the home furnishings sector’s resurgence, driven by strong visit growth and strategic positioning.
  “Visits for Ashley Furniture and HomeGoods have shown impressive year-over-year growth, signaling a strong comeback.” [27:41]

• Competitive Positioning:
  These brands offer value-oriented products that resonate with consumers, differentiating them from mass-market competitors.
  “Their focus on value and price makes them well-suited to attract a broad customer base seeking quality furnishings.” [27:41]

• Market Adaptation:
  While IKEA and Wayfair are prominent players, Ashley and HomeGoods effectively fill niches that mass merchants may overlook.
  “IKEA’s unique limitations create gaps that HomeGoods and Ashley can strategically fill to dominate specific market segments.” [29:16]

c. Focused Grocery Stores: Trader Joe’s and Sprouts

Key Points:

• Specialty Offerings:
  Stores like Trader Joe’s and Sprouts excel by providing unique product assortments and exceptional shopping experiences that differentiate them from traditional grocers.
  “Specialty groceries offer products and experiences that keep customers coming back, beyond what all-in-one grocers provide.” [30:16]

• Expanding Demographics:
  The growing appeal of ethnic and specialized groceries broadens their customer base and aligns with diverse consumer preferences.
  “Ethnic grocery chains like H Mart are experiencing audience growth, reflecting expanding palates nationwide.” [30:16]

• Strategic Placement:
  Integrating digital capabilities with physical stores allows these retailers to enhance convenience while maintaining their unique value propositions.
  “The digital-physical loop enables focused grocery stores to complement, rather than compete directly with, mass merchants like Walmart.” [34:11]

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7. The Future of Grocery Shopping

Overview:
Ethan explores the evolving landscape of grocery shopping, emphasizing the shift towards specialized stores and the integration of digital and physical retail experiences.

Key Points:

• Digital-Physical Integration:
  Consumers are increasingly utilizing services like buy online, pickup in-store (BOPIS) for essentials, while choosing specialty stores for unique items.
  “Consumers prefer to get essentials from all-in-one grocers while visiting specialty stores for products they specifically desire.” [34:11]

• Behavioral Shifts:
  Post-pandemic behaviors have entrenched certain shopping patterns, favoring convenience for staples and experiential shopping for specialty items.
  “The pandemic accelerated visit durations and the desire for experiential shopping, benefiting specialty grocers like Trader Joe’s.” [32:23]

• Strategic Opportunities:
  Retailers must leverage their unique strengths to dominate their niches, fostering loyalty through specialized offerings and exceptional experiences.
  “Focused grocery stores must leverage their strengths to create unparalleled value, ensuring they become essential stops in the shopping journey.” [34:11]

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Conclusion

The episode offers a comprehensive look into the retail landscape of 2025, highlighting the importance of experiential spaces, strategic expansion, and the rise of specialized retailers. Hosts Chris Walton and Anne Mezzenga, alongside Ethan Chernofsky, provide valuable insights and actionable strategies for retailers aiming to thrive in the evolving market.

Notable Quotes:

• “Creating areas where customers want to spend more time inherently increases transaction likelihood.” – Ethan Chernofsky [05:10]
• “Understanding the drivers of visit motivations allows retailers to message effectively and enhance the in-store experience.” – Ethan Chernofsky [11:54]
• “Macy's aggressive testing of new concepts underscores their strategic foresight, despite mixed execution outcomes.” – Ethan Chernofsky [17:53]
• “Their focus on innovation, both in-store and digitally, speaks to their preparedness for future challenges.” – Ethan Chernofsky [24:21]

For more detailed insights and data shared during the episode, interested listeners are encouraged to reach out to Ethan Chernofsky via LinkedIn or email at [e-mail].

Transcript

[Anne Mazinga]

Foreign.

[Chris Walton]

Welcome to the latest edition of the Omnitalk Retail Ask An Expert series. I'm your host, Chris Walton.

[Anne Mazinga]

And I'm Anne Mazinga.

[Chris Walton]

And we are the founders of omnitalk, the fast growing retail media outlet that is all about the companies, the technologies and the people that are coming together to shape the future of retail. Or as we like to say, the media organization that focuses on tomorrow. Today, at least we say that sometimes, don't we? And you, you. I. I love to say that. I love to say that. I feel like I coined that. And then now I hear everyone saying that exact tagline.

[Anne Mazinga]

But anyway, we've got followers. Yes, followers. Yeah, all right.

[Chris Walton]

Yes, yes, yes.

[Ethan Chernofsky]

But.

[Chris Walton]

And our next guest, honestly, I think he needs no introduction. He has now been on our show more than anyone. Yeah. So I'm not going to beat around the bush and I'm just going to introduce him to you all. So I'm pleased To introduce Placer, AI's SVP of Marketing, Ethan Chernofsky. Ethan is here this time to discuss the trends and the retailers he thinks we should all watch in 2025. Ethan, welcome back to Omnitalk.

[Ethan Chernofsky]

Thanks, guys. I'm really here to talk about the tomorrow of retail today.

[Anne Mazinga]

You're screwing up his catchphrase, Ethan. You're screwing it up. You're screwing it up.

[Ethan Chernofsky]

But we'll keep. I thought it was there.

[Chris Walton]

That was nicely done. Nicely done. Well, that's exactly what we're actually going to talk about. We're going to talk 2025, which is tomorrow, today. I love it, Ethan.

[Anne Mazinga]

Yes. Well, before we get into our discussion with Ethan, just a reminder, he is a wealth of knowledge. He's always, like I was just telling him before we got on, he is always so busy at all the trade shows because he has so much information that's valuable to retailers and brands everywhere. And you all listening can ask him questions as we go through today's conversation. Just to the right of your screen. So go ahead and do that as we go along. Now, Ethan, we must. Even though Chris and I can recite this right along with you, there are some people who are joining us here for the very first time. So, Ethan, if you don't mind, give us the quick overview on what Placer is and what it is about the data that you collect that makes it such a useful tool in all the topics at hand today.

[Ethan Chernofsky]

I'm so happy you should ask that, Ann. Blazer is a location data company and what that means. People vote with their feet. We show you how they vote across the United States every single day. We do that by observing a panel of tens of millions of mobile devices very critically. This is all aggregate data that has been stripped of identifiers like maids. And we then analyze that data with machine learning and AI algorithms and make estimations and present that in a wealth of different reports within our platform on everything from visits, visit trends through trade areas, cross visitation, and a whole lot more.

[Chris Walton]

Nicely done, Ethan. Nicely done. Yes, you did. All right, so let's not keep the audience in suspense any longer. I mean, the one thing that we love about having Ethan on, for all those that are joining us maybe for the first time and those that are returning is. And I literally have no idea what Ethan is going to talk about, we've had in Ethan on our show so much that we trust him to present really cogent data to us and for Ann and I to react in the moment, which keeps us very lively and also, we think, quite interesting because you're hearing what Anna and I are digesting in the moment. So. So, Ethan, where are we going first?

[Ethan Chernofsky]

I mean, I'm really excited for our April Fool's episode that we're going to do where it's all going to be fake day.

[Chris Walton]

We should do that, actually. That would be great.

[Anne Mazinga]

Real or fake?

[Ethan Chernofsky]

Yes. Oh, my God. That is. We found our next one. We did. But let's start with, like, one of the big trends that is very exciting to me is the overall concept and return to glory of the concept of. Of the third place. And there's two elements in this for me, when we looked at. First of all, I think the big one was Brian Nichol entering into the Starbucks universe, talking about it quite a bit. And what we really triggered for, for me was this concept of where do people want to spend time? We're going to talk about this later within the shopping center context, but it's something we're hearing so much across the wider retail landscape of how do we get people to come to our space and spend more time there? Because if I spend time somewhere, the likelihood that I connect, that I make purchases that I make, that I transact, obviously increases. And I think what's really interesting about this, this wider third place concept is that it's having impacts beyond where it's naturally associated, which is with Starbucks. But if we think about, like, Barnes and Noble or books, a million, these brands that have been rising that we didn't necessarily expect, a lot of it has been how do we create a space where you want to consume information Books a million does like book readings. Barnes and Noble runs events within their stores. And this has been something even think about like a Macy's having like a Tortazo within a department store concept within a mall. This idea of how do we create an area where you're going to spend more time, where you want to engage is really significant. And one of the things that was fascinating for us, especially when we think about some more like Starbucks, is when you look at their data compared to other coffee players, you actually see that they're well oriented for this. So, for example, Starbucks sees 7% more from a proportion of visits perspective of people visiting between 3 and 7pm than Duncan does. Right. And it's so it's not just about product, it's about this space where people want to spend. And I think this is something we're going to see a lot of players, certainly within the food and dining space, but even within wider retail, lean into what this means within their sector.

[Chris Walton]

So you're saying, so say Ethan, you're saying that, you're saying that your hunch is that Brian Nicholl from Starbucks understands that dynamic and hence that's why he's kind of playing into this third place angle in terms of re enlivening the Starbucks. And you're seeing proof of this actually still working at places like Barnes and Noble by the side you have in front of us as well.

[Ethan Chernofsky]

100%.

[Anne Mazinga]

Yeah. This is great. I think the thing that it will be interesting for retailers to think about too, as they're trying to draw people back into stores, is how you scale these operations to like, what other things, technologies, things are you putting in place in order to try to make this as simple and seamless, for this to be done at, you know, not just the flagship locations, but every single Barnes and Noble location across the country, for example.

[Ethan Chernofsky]

But it's also like, where does it work and how does it work within a specific environment? Because I don't think, I think when we think about like the third place, there is this kind of very classic, you know, the piece fits so well within that Starbucks coffee puzzle. And we think about retail, it's going to be different, but that doesn't mean it doesn't, it doesn't exist there. So it's asking like, how does it fit within that environment? And obviously for some brands to be like, this doesn't fit for what we do.

[Anne Mazinga]

Right.

[Ethan Chernofsky]

Also important, but I think this is going to carry a lot of weight within the year to come.

[Chris Walton]

And Ethan, I'm curious and this Is kind of a self serving question for something I'm working on potentially too. But Jeff, any data, and not again, not knowing what data you brought with you, I don't know if we're going to see this later or not. But Geoff, any data that, that get gives us an indication of whether the Starbucks turnaround plan is headed in the right direction at this point. Are you seeing anything in the data that you're looking at day to day?

[Ethan Chernofsky]

So what's fascinating is literally today I removed the slide on Starbucks at the end.

[Chris Walton]

Oh no.

[Ethan Chernofsky]

So, so I'm so happy you asked that question. Okay. I think Starbucks is one of the, especially when you think narrative wise like they're kind of like a cheap surprise. But I think they're one of the, the surprises of the coming year. And I would add an S at the end and say years because I think there's a few things they have going for them. One, this return of the third place, which I think is going to be very valuable and really kind of work for them, especially in suburban environments. You have the continued kind of return to office, especially in places like New York where they're very strong and what that means for kind of the performance of their locations. I think the optimization of their convenience element, which is how do I make sure that that person who wants to get in, get out can do so quickly and effectively, I think is really important. And then last bit, and this is a data point we found I think well over a year ago. But if you look at the markets where they're looking to expand, where they've announced those expansion plans in the past, they're still like, we think of Starbucks as like, oh, there's a location on every corner everywhere on planet Earth. There are still places where they are not as saturated. And that expansion potential does exist. And I think the fact that their focus aligns with those places gives us a lot of optimism in terms of what the brand can do over the coming years.

[Chris Walton]

Great. Glad I asked.

[Anne Mazinga]

All right, what's next, Ethan?

[Ethan Chernofsky]

Okay, next is calendar matters, right? We, we talked about this briefly with, in the last time we spoke when we were looking at like eclipse data. So everyone go find out that episode. I think it was one of our best and it was. We looked at the alignment of visits to where that solar eclipse could be seen in its kind of full glory. And I think one of the things we were talking about at the time was do you take advantage of opportunities that fall on your lap? I think one of the fascinating things about that is really Understanding the calendar and how it's working on a given year. So let's take this is data from 2024. Now, the fascinating thing about the data from 2024 is if you look at Super Saturday, right? Super Saturday came out on December 21st. And if you looked at Super Saturday data year over year, you actually saw a decline in visible. Now, when we put out our data on Super Saturday, we very intentionally did not include year over year visits. Why December of 2023? Super SA so a year prior, December Super Saturday fell out on December 23rd. So it was the last shopping day before Christmas. The visit spike was absolutely enormous. This year came out on the 21st. So what we expected and then what actually played out was that the Sunday right after on the 22nd did very well and Monday the 23rd did extremely well because you had all that rush of people who need to buy something right before the holiday happen on the Monday, not on the Saturday. And so one of the things that really kind of peaked for us is if you look ahead at this year, Christmas is even further into the middle of the week. So our thought process is you might see an even lower performance for Super Saturday. But that's not because Super Saturday is less important. It's because the context is shifting in terms of the way the days are actually falling out. And it's something that we think offers a tremendous amount of opportunity for those who know how to lean into it and plan around it, as opposed to maybe the kind of quick hit hot take that says, ooh, Super Saturday is losing its value, which is clearly not the case.

[Anne Mazinga]

So what kind of things are retailers doing then to, you know, to kind of keep that maybe even level, like not, not to have the spike that we're seeing on the screen. But what are retailers doing, Ethan, or what do you anticipate that they'll try to do to capture that Sunday, Monday, Tuesday into Wednesday traffic?

[Ethan Chernofsky]

Well, I think it's asking, like, what drives the Super Saturday visit? And we talked about this before, but what makes someone visit on Black Friday versus Super Saturday? What are the differences in those motivations? And then it's going to be the same thing here. The person who's visiting December 23rd, yes, very often is the oh, I need something customer. And it could be sheets or pillows or food or a present that they didn't get last minute. But understanding that driver of visit, that motivation that you can work your way back to, there's this, you know, you know, I'm a big fan of behavioral psychology and this idea of there are predictable, irrational processes that we go through, even if they're not as easy to say. This is how everyone works all the time. I think understanding what are those driving forces can bring a ton of value in terms of how we message, how do we drive those visits and how do we create that in store experience to help people get from point A to point B as fast as possible, especially when we're linking online to offline, buy online, pickup in store, et cetera.

[Chris Walton]

Yeah, the merchant in me is actually looking at this going, okay, yeah, the traffic pattern is one thing, but then there's the margin of the items and the promotional schedule and the markdown schedule of the items too, that have to factor into this. So I think, you know, as you're playing that up, you know, you want to, you want to be very intentional with those strategies as you come in and out of these peaks as well, which is, you know, kind of core and core bread and butter retailing. Go ahead, Ethan.

[Ethan Chernofsky]

Man. I'll reveal my, my fandom of the, of the Omni Talk world with. I love the video you did with fabric at their fulfillment center, the micro fulfillment center. One of the things that I've always obsessed over from a microfilm perspective. Imagine, you know, we have a Super bowl is coming up, right? If the super bowl happened, I would love to have a package ready for micro fulfillment, especially within urban areas of like two Pepsis, a thing of Fritos, whatever chocolate fits under that banner, like package. Understanding that this is something that people are going to be thinking about. How do I enable that? Especially we've heard about, you know, one hour delivery, all these things really quick. And you think about the mindset of where the consumer is going to be at. And the calendar tells us a lot about what that mindset is going to be and how it's going to differ from day to day.

[Chris Walton]

Yeah, it's funny you brought that up. I can't actually stop thinking about that video since we shot it. So for those that aren't maybe aren't familiar, we shot a video of, of fabrics installation that they're doing at for Save A Lot, where they open a 9,000 square foot warehouse and they're fulfilling all the orders through Save A lot's positioning on UberEats. And there were Uber drivers coming in and out of this warehouse like crazy while Ann and I were there. And it's a really interesting way to attack a new market. So to Ethan's point, you use that at the right times. It potentially even extends your reach for the key products of the moment too. So. All right, Ethan, well, what's next?

[Ethan Chernofsky]

All right. The next is a real focus on why we visit. And I think we've had this conversation in the past about kind of the mall renaissance. But I think one of the things we think about where it's going to head from here. I had an interesting conversation at NRF actually where someone was talking about the goal in retail is not to think a year into the future, it's to think 10 years into the future. And that's how you're going to make the best decisions. And so especially from this was someone on the real estate side. So they were saying, especially in their world. And I think one of the things we think about, you know, let's say where we're at is the mall 2.0. There is this mall 3.0. And what's fascinating is, is what it is going to drive and how it's being developed and what, what that means. So one of the things that was really fascinating for us is when we looked at Black Friday weekend, we saw open air shopping centers and indoor malls in many cases outperforming the anchors of those malls. Wow. Performing some of the key apparel players within those malls. We also saw visit duration rising in the holiday season compared to the standard kind of rest of the year, which told us something really interesting. Which our expectation of what we're going to do in the mall, what drives that visit is changing quite substantially. Yes. And then understanding how, how this is going, what this means, the amount of time we want to spend, what that means for, for tenancy mix, the types of opportunities that work, even promotional concepts that work. So I was in a mall over the summer that had this big Nintendo promotion. This whole area of the mall set up to like try out the classic Mario Kart, video games, Super Mario Brothers, et cetera. And it was really interesting to see how many people were coming along with lots of kids waiting in line, doing that and then consuming some food and leaving. Not classic mall visit that we would come to expect years ago. I think that change and what it's going to mean for retail spaces and the expectations of what retailers need to do to thrive within those spaces. It's going to have a very significant impact.

[Anne Mazinga]

Well, Ethan, it gets back to what you were saying too about like the, the programming for the third space, right. I mean the things you're able to do like think about even the malls locally, like doing like horse and carriage rides at the outdoor malls. Like you. It's totally hitting on I think what you were talking about in the first slide of like what are all the things that you can do especially centered around what we know about the calendar to be true. Families being together during those times, needing an activity to do, having being able to eat at the same store spot and then go. It's less now about the waiting in line outside of the Kohl's or Macy's for their Black Friday Day deals and the mall being a destination for entertainment, it sounds like, and I think with.

[Ethan Chernofsky]

That, that also has this, this, this impact of a trend that we talked about years ago on, on this kind of platform, which is the mall waterfall. Which means it's like if the focus of going to these top tier malls is so much more about experience and so much more about these kind of high end, exciting retail concepts, other places are going to be the destination for more traditional expectations of retail. And there's opportunities likely not in those hot places, but notch below for retail success for certain brands that their place just no longer is within those top tier centers.

[Chris Walton]

Yeah, this, to me, this is a truth bomb slide, Ethan. I mean that, that's how I look at this. And I mean like, like you look at the data here on this slide. I mean, I mean it's, it's, it's atrocious for Macy's and Kohl's when you look at it from that perspective. And then you know, you started with real estate in terms of how does this thing evolve? This gives you an inclination. What the question I start to ask myself is do the Macy's, the Macy's executive team in particular already understand this and hence why they've tried to move themselves off of malls to get that trip that you're talking about where people traditionally want to go for the actual shopping of it, but yet they haven't exactly figured out the code on that given their recent store closure announcements they had earlier this past January. So, so yeah, I mean this, this is a, a really telling slide when you're thinking about how does retail evolve over the next 10 years in terms of what type of stores are we building and where are we building them? And then of course too, to your point, what is version 3.0 of the mall as?

[Ethan Chernofsky]

Well, it's so interesting that you know the Macy's point because again, execution of new ideas is always going to be a challenge and people can judge what they think of each concept. I've always looked at Macy's as a really interesting kind of canary in the coal mine where from a strategic perspective they are trying things that seem pretty far ahead of the curve. It doesn't mean you always love the execution. And there's lots of opinions on why things work or why they don't. But they are one of those few, not few, but they are one of the top retailers, especially for that size, that seems to be aggressive in trying new things and focusing on that, where things are going. And it's one of the reasons, kind of, I have a little bit of an obsession with Macy's, and I think it's because they do feel like, from a strategic perspective, kind of ahead of it, they understand where the world is going.

[Chris Walton]

Yeah, no, you're right. I mean, they do deserve a lot of credit for not not wanting to give up. I think the question that is just in everyone's minds is, you know, at what point is the fight not winnable anymore? And I don't think any of us know that, because you can learn a lot of things through experimentation, particularly with the different brands that they have too. Right, Ethan? I mean, Bloomingdale's is not the same thing as Macy's, and Bloomingdale's is not on this slide either. And so we have to keep that in mind. But yeah, yeah.

[Ethan Chernofsky]

All right, Ethan, let's. Let's. Moving forward. I think the next slide. This is a slide that I was really excited by. This was actually. I replaced the Starbucks thing for this.

[Chris Walton]

I'll tell you where retail will happen. Okay?

[Ethan Chernofsky]

This is breaking down all of the states that had net positive migration since from between 2020 and 2024, who had the largest share of the net positive migration. And what was interesting is we've looked at this before, and we usually look at it as, all right, what's been the trend? And it's like, all right, Florida is 3.6% up, and Montana is 2.7% up. Isn't that exciting for all of them? The answer is yes. But when you actually do this type of breakdown, it pops just how significant the move south has been. Florida, Texas, Arizona, North Carolina, these significant pops in these new regions. And I think what's really interesting is when we think about where retail is going to happen, the excitement around these spaces where people want to spend time, by the way, the alignment of not just where people move, but where people who have disposable income moved and now have potentially more disposable income because they were coming from places with a higher cost of living, places with a lower cost of living, There are places where I think retail pops. We're only just beginning to see and I think understanding how that shifted where those opportunities may lie is going to have a big impact. Even things like flagships. You know, again, we were all at nrs. Lots of people will talk to you, especially these digitally natives. Oh yeah, we're have something in New York, we're going to have something in la, right. Like, but have you thought about Dallas and Austin? What about Miami and even places like Tampa for some brands, is it Phoenix and Raleigh, North Carolina? There's these areas that are popping that I think are going to continue to rise in terms of their overall influence and potential.

[Anne Mazinga]

Yeah, there's so much opportunity in these spaces too. Like, I think that's the really cool thing for those listening who aren't, aren't watching. When you see states like Ethan's talking about, like Arizona, where we're hearing tons of pilots happening with retailers in the Phoenix area. Texas, 15.9% increase here in, in where, you know, where retail is going to happen, 24% in Florida. So I think you're right, Ethan. There's so much opportunity in these spaces to be able to do. And it's why we're hearing more tests. That's why we're hearing more tests of things in Dallas and you know, in Arizona and Florida too. So that, that all aligns with what we're seeing here on the.

[Chris Walton]

Well, and the other point I love about having Ethan on too is like, particularly for me, like in, in the, in the, in the writing and the commentary that we do. Like, I actually like putting these different data points together to try to understand, you know, and read the tea leaves about where retail's headed. So I go back to what you showed on the last slide with Macy's and then I look at this and I go, wow. Macy's has been very deliberate in trying to capitalize on this pattern or trend, particularly by doing a lot of their testing of their smaller format stores in, in the Texas area and then subsequently shuttering those and not being able to make them successful despite the macroeconomic tailwinds at their back. When you look at this slide that Ethan's showing us, so, so there's, there's, there's a, there's a lot here to unravel or at least a lot of things that make me stop and go, huh, I didn't thought about it that way before. And so I, that's why I love having Ethan on.

[Ethan Chernofsky]

No, I think this is like a surface level metric too. I think it's super like it pops. But even that question of like all right, Florida is clearly a place of excitement. Is it exciting? For me, like, even that question that we were asking before, we were talking to a brand, I mean, literally at nrf, and they had tried locations that hadn't worked. They shut them down. And the way they had tried locations was on the coasts. And what they found, what they said was, our most of our audience is actually a certain kind of income class within a certain type of individual that lives in the Midwest. Well, I said, then why did you open up your locations on the coast? You know, there are places to go where your audience might be more focused or more. More saturated, and orienting yourself towards that audience is where you want to be. So I think there's always that level, deeper task. Okay, people have gone there, but is it the right people for me and the places that people have left? Does that mean some of my competitors have moved who may be better oriented for that space? And now I have an opportunity in the place I was already operating if I know how to take advantage of that market.

[Chris Walton]

Right, right. And like we always say, for every trend, there's a counter trend too, particularly when you start thinking about the regional plays here as well. All right, Ethan, you always surprise us with something at the end. You have anything for us today?

[Anne Mazinga]

I have.

[Ethan Chernofsky]

I have something for you. You do? Our brands to watch are. I'm very excited about. And this is. This is from our. Our 10 Brands to Watch in 2020, 25 report that we do every year. We've included some because we don't have to follow all the rules here in our report where you're not allowed to be on the. On it two years in a row. And this one I included on it last year because, you know, rules are for other people, not for me. But our first one.

[Chris Walton]

Yes.

[Ethan Chernofsky]

Is. Is Sam's Club. Okay. And Sam's Club, for a very specific reason. I think they obviously nail value, they obviously nail loyalty with their business model. But I think one of the things we're really excited about is the idea of audiences shifting into relevance for certain retailers and its context, not necessarily some decline in terms of their power or potential. So what do I mean by this? I don't know. 30 somethings older, millennials living in the city. Is Sam's Club a great fit for them? No. Would a 30 something 10 years prior have already moved to the suburbs? Maybe. As this audience now shifts into the suburban environment, are they positioned to take full advantage of all of the benefits that a Sam's Club has to bring? I think the answer Is Yes. And you combine that with their focus on innovation both in the in store, in terms of retail media, all these other things. I think it speaks to a brand that is super well positioned to have a lot of success in the near term largely because there are these new audiences that now make sense for their offering. So they were doing great things before and now kind of the stars are aligning for that great those great things to bring maximum benefit.

[Anne Mazinga]

Yeah, I wonder Chris too like I think about their merging with Walmart plus and as you start to think about.

[Chris Walton]

Down the road if they do that.

[Anne Mazinga]

What, what? Well just like they merged their supply chains with Walmart so I started yeah with Walmart but I think with the Walmart plus membership, if you start to think about too Ethan, down the road how this could continue to evolve like where as an, as a older millennial, maybe I don't want to go to Sam's Club to get to fully stock up or I'm not fully prepared to have you know, giant things of toilet paper and whatever in my small, small living space. But I think that you start to think about you know, seeing the adoption that Walmart has had with especially that upper income level to now have Sam's Club to kind of into integrated or kind of teasing them a little bit with bringing in Sam's that that does offer so much more potential I think for Sam's Club too down the road just as they gain more exposure through, through some of the Walmart plus membership perks and just some of the experiences that those shoppers are having at Walmart. I think this combined with the things you're talking about, their digital investments make for, make for a good pick here with Sam's Club.

[Chris Walton]

Yeah, I mean I'm, Ann and I are all in on this slide, Ethan. I mean you know, and to your point too, I mean I think, you know we've long wanted them to join those programs together. We don't know Will, but to the point that Ethan opened with, you know, looking 10 years out, you know Walmart's the best at doing that and so they're giving themselves the option to potentially go that route. The other part of that too, like going back to the fabric conversation we had too. Walmart just made that big investment in symbotic or hard to explain that that, that, that deal. But yeah, but anyway let's just say there's, there's a nice partnership developing between them and robotics and trying to do similar type things here to get at your point Ann, which is making, making their reach as easy for their consumer, whether it's in the rural areas or in the cities, which could be a part of both the Sam's Club and the Walmart strategy in the long run. So, yeah, I mean, I think net. Net. I think we're all in on. On the slide you're showing here, Ethan, for sure.

[Ethan Chernofsky]

Excited for this one, too. All right, next one is the home furnishings comeback. And I think it's going to be led by Ashley and Home Goods, but I think it's the beginning. Oh, wow. Look at the visits for Ashley Furniture and Home Goods. They are. They were impressive year over year, throughout the year, like really growing back. And what's interesting is I think it's the first indication because these are the ones that really embrace either naturally or because of a concerted effort, value price, you know, price being a major priority. And so when you see that kind of trigger back, it does give you this indication that this space is very much poised for a very significant comeback. Again, I think it's going to be led by Ashley and HomeGoods in the next year, but there is big potential for the wider space in 2025.

[Chris Walton]

Wow, Ash. Ashley, getting a shout out from Ethan. I mean, homegoods, I'm all in on that. But. But Ashley, like the one furniture store brand that you can actually name that still exists is getting you singled out for you, from you as the retail to watch. That's. That's fascinating. That's a big surprise for me, Ethan.

[Ethan Chernofsky]

Yeah, you have to. I mean, HomeGoods is always there, so you have to go with the other one too. But I think they've also done just a really brilliant job of positioning themselves. But then I've got one last one, guys.

[Chris Walton]

Okay, wait, before you move on, do you think. So I have a question about this. Do you think this will translate to, like, the home furnishings business for the mass merchants, like the targets, the Walmarts, who are also big in this exact same space, particularly against Home Goods and.

[Anne Mazinga]

Ikea and Wayfair, like, how did they factor in ikea?

[Ethan Chernofsky]

Yeah, yeah. I actually think Ikea's. I'm pretty bullish on what IKEA can do. I think it's understanding where they have to do it and they're kind of the very unique limitations that they. They face from like a real estate perspective and because of the shopping journey they expect you to go on. There are certain places where it fits really, really well. And there are certain places where it's, I think, less of a fit. And so understanding that gap is going to be really significant for them.

[Anne Mazinga]

Okay.

[Ethan Chernofsky]

Wow.

[Chris Walton]

The wayfare question is really interesting too though. And because like their CEO just came out and said they're going to invest more in stores. That's why they shut down their German operations. So he could be hitting the trend here at the right time to start building out more stores too.

[Anne Mazinga]

Right.

[Chris Walton]

Showing here.

[Anne Mazinga]

Yeah. They certainly fit into that between Road of Home Goods and Ashley from Price point.

[Ethan Chernofsky]

Yeah.

[Anne Mazinga]

Perspective. So that makes, that makes a lot of sense. All right, Ethan, last one.

[Ethan Chernofsky]

Focused grocery now.

[Chris Walton]

100%. 100%. 100%.

[Ethan Chernofsky]

We're all about Trader Joe's and Sprouts, but I would even included things like H Mart, ethnic grocery here. One of the things we've been seeing a lot more is a widening of the audience that go to like specialty groceries. So you know you would have like kind of Asian oriented chains like an H Mart. That audience is growing and it's expanding and it's showing the excitement around different types of food, widening palates nationwide and the opportunity that exists for people who can drive those visits. Especially when we've seen consumers more willing to make more locations, more visits a part of their kind of monthly grocery mix. So whether that's more stores, more, more, more visits overall, all of these things benefit those that have something very special to bring to the table. And it's all this orientation of like unique selling point, like what do I have to bring to the grocery mix that is extra valuable that's going to drive this visit. And the fascinating thing here is there's going to be a battle between those all in ones trying to regain more of that shopping list and chains like this who have a very clear area where they are awesome but don't. Can't necessarily compete on the wider breadth of options and what wins out for consumers in different areas, which chains are able to leverage their strengths to dominate more of that space.

[Anne Mazinga]

Wow.

[Chris Walton]

Yeah. Which is something that's really interesting because we've heard from Sprouts leadership explicitly that that's their strategy. They, they just know they're going to be the, the extra stop in the shopping center that captures their customer and, and they draw them in with great products you can't find anywhere else or a great experience that you can't get anywhere else. So, so, yeah, and so basically so if I, so if I go back then, Ethan, to some of the last few times we've had you on. So this is really kind of a, this is a trend that's been exacerbated by us coming out of the pandemic too. Right. In terms of us having more time to do these types of things.

[Ethan Chernofsky]

What's fascinating is immediately post Pandemic we were still in a stage where visit durations were up, visits were over, oriented towards kind of the all in one grocers. And then that started to fade. And I guess the one exception to that rule was Trader Joe's has been incredible from about like a month into the pandemic and they were just back.

[Chris Walton]

Yeah.

[Ethan Chernofsky]

But all the other ones that was more specialty. I do think there was this. They took a little bit of a hit for a few years and now you've seen over the last year or two this shift away from convenience and there's lots of reasons why and the shift towards the types of products that people are really excited by and it's, it's. I think value is a piece of the puzzle and it gets a lot of the. When people are saying why this is happening, value is clearly a part of it. So much of it is what you mentioned before. Products that I can't get anywhere else. Products that I'm excited about that, you know, the things that really pop in terms of my overall grocery list, the things that get me really excited as a consumer. Very often I'm getting at specialty grocery or the grocery chain that doesn't have everything I need but has the things I really, really want.

[Anne Mazinga]

Yeah. Well, Nathan, I think it brings up an interesting point too. Like we're seeing increased foot traffic in places like Sprouts and Trader Joe's. And when you think about their shopping experience, I mean it is more of like a surprise treasure hunt kind of experience where you know, going in is the way that you're going to find these new products. And I wonder if you, as we continue to see Walmart's further penetration and grocery like are you just reordering or doing pickup for those other things that maybe you don't need to go into a Walmart store for or your traditional grocery store, but you are going into Sprouts because the shopping experience is great. The products assortment is going to be new and fresh every time. Like those are the places where if I'm going grocery shopping, I do want to spend the time versus, you know, Walmart. I've got my groceries on repeat at this point. Like they're delivered to my house. I don't need to go for those specialty items. But it's still worth a trip to some of these stores. It's interesting. I wonder if we'll continue to see that as 20, 25 unfolds I think.

[Ethan Chernofsky]

You absolutely nailed it. This is. I'll go back to a conversation I had with a mutual friend of ours, Ben Miller from Shop Talk, where we talked about kind of the. The digital physical loop.

[Anne Mazinga]

Yeah.

[Ethan Chernofsky]

You go into a store and there's some things you don't want to have to go back in the store for, like, I don't know, toilet paper or paper towels. I love Charmin. You don't need to convince me otherwise. Possible package.

[Chris Walton]

You don't need to squeeze it.

[Ethan Chernofsky]

Yeah, yeah, I'm there.

[Anne Mazinga]

It's great.

[Ethan Chernofsky]

You've convinced me. And so just send that to my house. I don't need to go shopping for that. But then there's going to be some items that I want to specifically pick out in a store. Or I went to Walmart to get something else and I'm going to utilize their grocery as a part of it. And then the places that have the products that I really do want to go and find and excite me. I think that that kind of wider journey is about to change in a really significant way. Even the way you talked about it with Sam's Club vis a vis Walmart, you know, I think that's where that sector is going.

[Chris Walton]

Well, and you guys are hitting on it, too. This is the value of Walmart plus for the higher income graphic as well. You know, the higher income demographic is going to be the one shopping at Sprouts, not the lower income demographic for the most part, I would assume. And so the higher income demographic can use Walmart plus to put everything on repeat. They don't have to go into the Walmart store and that frees up their time to then go to Trader Joe's and Sprouts and all that. So there should be some natural tailwind, you know, to those retailers as well. Fascinating.

[Ethan Chernofsky]

And with that, with that boom, that's what I got for you guys.

[Anne Mazinga]

Ethan, you're the best. I love your boom mic drop for yourself. We really appreciate it.

[Ethan Chernofsky]

I don't even know what I dropped. I dropped something. I dropped a big package of Charmin.

[Anne Mazinga]

Yes, you dropped a giant value size packages Charmin on all of our audience today. Ethan, thank you so, so much for pulling this together. It's always so fun to talk to you. If people want to dig in more to any of the data you shared today, they want to talk to you about setting something up for their own stores or brands. What's the best way for them to get in touch with you?

[Ethan Chernofsky]

So, I mean, you could do the. If you're watching us live on LinkedIn. You can click on my name and message me if you are. If you want to email me, I'm @ethanlayster AI. You can also check out Placer and all of our amazing stuff, including our free version of our premium product at Placer AI.

[Anne Mazinga]

Excellent, Ethan. And you'll be out at Shop Talk this year, too. So for all those listening, check Ethan out there. Maybe he'll have some more fun data to share with you. I'm sure you will, right?

[Ethan Chernofsky]

I'll have so much fun, dude.

[Anne Mazinga]

You might have to get in line, though. Ethan's booth is always highly trafficked.

[Chris Walton]

It is.

[Anne Mazinga]

All right, well, thanks again. That wraps us up. Ethan Chernofsky, svp@placer AI. Thanks for joining us. Thanks to all of you who joined us live on LinkedIn. And as always, be careful out there.