Our 2026 Retailers To Watch | Ask An Expert

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

I'm your host, Chris Walton.

And I'm Anne Mazenga.

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.

And our, our next guest, 100% needs no introduction.

Ethan, how have you been keeping?

I've been doing well.

How are you guys doing?

Doing well.

Ethan, we're so excited to have you back.

I'm excited for this round too.

It's a little different than what our audience has seen before and even what Chris and I have seen before.

So the top retailers to watch.

I can't wait.

Yes, Ethan's been on our show many times.

So Ethan is of course, Ethan Chernosky, the chief marketing officer at Placer AI.

And as Ann alluded to, Ethan is here to share his 2020, 26 retailers to watch.

Now, what does that mean?

Well, your guess is as good as ours because now for those listening and watching in real time, listening at home, keep in mind, as we always do, whenever Ethan appears on our show, Anna and I have literally no idea what Ethan is going to share with us.

And we, like all of you, will be reacting in real time to what Ethan says 100% organically.

So should we get started ad should we put Ethan to the test?

Let's do it.

But before we do, really quick, make sure that everybody who's joining us live right now, you have the opportunity to ask Ethan any questions that you might have, any rebuttals that you might have about his retailers to watch.

You put those right in the chat to the right hand side of your screen as we go along.

And Ethan and the Placer team will make sure to answer them as we get started.

So with that, Ethan, what's.

Let's do it.

Just to, just to make sure we check the box.

Okay, we're Ethan, what is Placer and what is it about the data that you collect that makes it such a useful tool to provide the insights into the topic at hand today?

Ethan, what a fantastic question.

So Placer is a location analytics company.

What that means people vote with their feet.

We show you how they vote across the United States every single day by analyzing a panel of tens of millions of mobile devices and then utilizing machine learning and AI algorithms on top to make estimations of visits to retail locations across the country.

And, and we can see everything from visit frequency, the customer journey, true trade areas, visits obviously, and Visit trends and a whole lot more.

I feel like I've heard that a couple times now on this show, you know.

Yeah, it's funny for the audience to know how the sausage is made.

I screwed up our tagline and had to rerecord where Ethan just nails it right from the get go.

So.

So Ethan, with that out of the way, what is the first thing you're going to share with us?

The first one is, is down the middle because when you think retailers to watch, you want to talk about the retailers that you think are going to do very well that you're really excited about.

And this is, this is the.

Where we kind of just tip our cap to great retailers that we think are going to have great years.

And I think what's interesting about some of the retailers that we were focusing on this year is there's different reasons why we like them.

So if you look at something like EOS Fitness, really great retailer, really great offering, really amazing sector, this is a good reason to expect them to do extremely well.

Who is EOS Fitness for those who might not be familiar with them?

So they are one of these rising fitness players that is oriented towards a cheaper point of entry and being kind of more valued, value oriented.

So that is a space that is clearly really exciting.

The fitness space in general is one that you could just throw in seven or eight different chains here because fitness is doing so well.

Give you one of the really interesting data points that we are fascinated by.

Traditionally, fitness does extremely well.

In Q1 we have our New Year's resolution.

It starts dipping.

You see a pop in October and then November and December crater and then you get this big jump between December and January.

That jump used to be massive, 30% plus.

In 20 to 23 that number was 27%.

In 24 and 25 that declined to 22%.

And this year it was, it was down to just 17%.

The jump between December and January.

This while visits were up year over year, even though there was a week where visits were down almost 10% because of the storms.

So what that tells us is this really high performing sector.

It's being driven by the fact that consumer behavior has fundamentally shifted.

Fitness is now non discretionary.

It is something that people are doing, they feel like they need to do it.

Health and wellness is here, it is lasting.

It's a huge shift.

So that's something that again, all the ingredients are there for so many of the players within this segment to do extremely well.

Then there's other players that are kind of hitting on really key themes.

So H E B is one that we're talking a lot about.

We're going to, we're going to give a hint the spoiler for minutes.

Oh, hint of we're going to focus on grocery a little bit.

But H E B is one of these kind of outliers when we think about the middle in grocery.

The traditional grocers, they're feeling a lot of pressure.

H E B has stood out and they've stood out by being unique.

They've been uniquely focused on their local perspective.

They've been focused on how they have this adjacent innovations, these new offerings that make sense, that are still kind of authentic and feel like within the H E B brand.

So this is something that kind of really stands out.

I love other brands.

I'll call it one more and then, and then we kind of like open it up.

But like Michaels is another one that's really been exciting for us because I think it's a retailer that was doing well and then you removed competitors and when you do that they just do extremely well.

And as opposed to some of the competitors, they were always hitting this higher income bracket.

So it's not only are they grabbing that the visits from these competitors, but they have this unique part of the market that gives them even more exciting trajectory.

So these are just some of the retailers are really excited about and they're hitting on themes that generally get us really interested.

Yeah, that's interesting point about Michaels.

I mean, I think I saw an article yesterday saying like they're selling a ton of balloons now, you know, which makes sense because party city, you know, left the landscape and you know, so now it's just a question of how long can they maintain that momentum and also build upon it too.

I'm curious, Ethan, your comment about fitness.

We've had you on the show many times and one of the data points that's been an inspiration for me is the changing behavior of work and particularly work from home in terms of where you need to think about your stores, what it's doing to the grocery industry, the quick service industry too.

Is that also a factor here in the fitness story in terms of people having more time to devote to fitness and it therefore becoming kind of a non discretionary activity?

I think so.

You think so?

I think so.

It's not something that I could prove but I think it's like the biggest piece is health and wellness.

We think about again, if we go back pandemic time, we think about what changed and what changed that was like all Right.

It was a short term shift and then people went back to their normal behavior and what was.

That's it.

We just look at the world differently.

I think health and wellness is one of the biggest things that change.

And you see it in terms of like things like alcohol consumption, you know, the consumption of kind of health oriented products.

These are all interrelated.

We just care more about this issue now and it's becoming something that we lean into and it's again, we're six years later and it's still growth on growth on growth, which is unbelievably impressive.

Yeah, the interesting data point to me would be like, where are people going to the gym?

Are they going.

Do you see more people going to the gym near the office relative to where they were before or relative to their home to where they were before?

You know, is there a change in that pattern?

That'd be something interesting to explore.

All right, Ethan, what's next?

Okay, the next is a group that I'm calling convinced mostly question.

Right.

Oh, wow.

Right.

I am excited about, I feel like, oh, this is like if I would put all my chips into the middle on that first group, I would put a lot of chips, but I'd hedge a little bit.

Right.

And so this is a group that for me, the, the, the number one chain I think of is Starbucks and there's a few others that I think fit here as well.

Starbucks.

And I mean, let's think about the reasons why, like when we're looking at a retailer that we think is going to surprise or bounce back, what we're essentially trying to ask is why are visits down?

Because they usually are for, for retailers going to bounce back.

What has the company announced from a strategic perspective and do the gaps and the indications of why those gaps are being created, does the strategy solve those gaps?

And if they do, then we're like, okay, this is someone that we believe in.

We think this is exciting.

And I think Starbucks checks all those boxes.

So one business weren't down like 30%, they were down a few percentage points.

Obviously it's a huge retailer, but they were down a few percentage points.

And then you have this kind of new leadership that says we're going to try and do something that's complicated.

Right.

Everyone in the space, or most of the biggest rising players, the seven Brews, the Dutch Bros, are like, we're going to be super convenience oriented in and out.

And Starbucks says we're going to, we're going to do that.

We're going to be convenience oriented.

But we're also going to try to bring back the third place, and we love that because we think it creates something that otherwise would be missing.

It zigs when other people are zagging and it leverages their massive strength and reach to kind of double down on what they were traditionally known for.

And I think this combination of strategy alignment, trust in their ability to execute is all working.

And we saw the indications of it already in Q3 and then Q1, this, I should say Q4, 20, 25, apologies.

Like that, that was even, even bigger.

This is, this is like an exciting turnaround.

And then you add on top of that, they just do things that nobody else does.

And I'll give the example from the holiday season.

We know there's going to be a huge spike on Black Friday every year.

Then they do Red Cup Day, which is always a massive spike.

And again, it's a free red cup.

Let's not go crazy.

Like, it's still massive spike in visits.

They did the barista thing, which was enormously successful.

And you're just like, here's a retailer, or, excuse me, a restaurant chain in this case, that knows how to generate urgency and excitement.

And it's, again, it's a cup.

Like, it's just super impressive the way they understand their audience and how they're able to build on their strengths.

I would add to this category one that I think you'll agree with and one that I know pretty confidently you won't.

I think Home Depot's in this category too.

I think they've had some, like, challenges that are like, you know, the push, pull forward of demand and all that.

And I think they're going to come back and I think I also, and I might be swayed by their recent announcements, but I'm tentatively excited about Target because I think Target is starting to talk about things that we spoke about at the end of last year, where this is a retailer that does certain things very, very well and they need to put focus on fundamentals.

And it feels like these recent announcements speak to, hey, we're going to focus on those fundamentals.

So that also makes me excited.

Yeah, Ethan, I think one other important thing to, to call out too is Starbucks adhering to some of the trends that we're seeing in the market that we just talked about on the last slide.

Increased use of GLP1s, making sure that they have protein offerings now in their coffee.

Like, they're also, in addition to making sure that they're the most convenient.

I, I think where the potential for Starbucks is is that they are able to do some of these things at scale that it's, it's hard for a small independent coffee shop to offer protein, cold foam, right?

But Starbucks now can double down on that and be the place where when we see a reduction in alcohol consumption, an increase in coffee consumption as the, the third place or the, you know, the thing to do to go out and grab with a friend.

I think those are other trends that are like going to help as you're talking about here.

Starbucks hopefully kind of come up and continue to see success in the, in the year ahead.

Yeah, absolutely.

I agree with everything there.

Yeah, that's a good point.

And the one question though that I have too Ethan, and it's, I think why you say you're convinced mostly is there's still a lot that's got to be shown out here because like if I look at this graph particularly like if I just put these quarters on top of each other, it essentially looks like it would become a flat line which you know, and that flat line performance has not been where it needs to be be for Starbucks.

So that still is a question.

So at some point for this to turn around we need to see that bounce above the top line on, you know, on the two year stack trend.

So yeah, it'll be interesting and you know, and, and then when I think about Home Depot, I 100, I 100% agree with you.

I would be betting on Home Depot but with Target that's where the big question for me is.

I'm curious like that that traffic line has not even stayed flat.

You know, as you look at it, it's been decidedly going down over the years.

So, so they've got a much bigger kind of, they've got a much longer road in front of them so to speak than say Starbucks does on their recovery, if you take that perspective on it.

All right, what else you got?

Okay, I have the future of grocery question and I'm stealing from my friend Eric Hahner from Dunhumby.

He put this, he used language that I really liked and he basically said grocery success is being driven by what he, he, he labeled it as three groups and I think it's, it's a good classification.

The first is quality first.

So like the sprouts is of the world and they're going to win on quality.

The second is value first.

The algaes, the lidos of the world, they're going to win on being like, you know, cheaper.

Right?

You're going to get the things you need and you're not Going to spend as much.

Yeah.

He's like, those are great.

He's like, the middle is going to feel compressed.

He's like, but there's a group within that middle or even on the edge of the spectrum that are even more interesting.

And he calls those the, you know, he basically says they have a unique offering, they do something uniquely well.

And he would put H E B in that category and he would, I think, put Trader Joe's in that category too.

Obviously values there too.

But of like, whether it's local focus, their innovation, the, the draw of their products and brands that they, that they house, those are things that they do something really special.

And what I thought was fascinating there is if we accept that we're going to see pressure on the middle, those traditional grocers who are going to have to battle more for that share of lists.

And this was something that was coming up again and again.

We spoke to groceries at some of the big events that we've been to in the last few months.

It's not just basket size from a dollar perspective, it's the number of items in the basket that's getting them a little bit nervous.

They're trying to figure out how to increase then.

And we know that consumer behavior is leaning towards more stops within a kind of segment, less time at each individual location.

You really have to ask, why am I buying things from you?

What is the thing that is special that I'm getting from you?

And I think that's going to be a huge driving force.

And I, I'm really interested because I think, look at a chain like Kroger.

They've been unbelievably innovative in trying things.

They've been pushing the envelope in a lot of areas.

Not all of it's worked, but they're trying things.

And like, these things that they're trying make sense.

And so does every one land.

No.

But you wonder what they're going to roll out over the next year.

And we think about that previous slide when we talk about challenges and then does the strategy address the challenge?

What I'm really interested to see is the things that you hear that they're inevitably going to roll out over the next six, nine, 12 months.

Are they looking to address this issue and therefore what are they doubling down on?

And do you think Kroger's doing that?

I think Kroger is a super strong player that has good visit metrics and is dealing with the challenge that everyone's dealing with after that not being a challenge at all three years ago.

So 21, 22.

You won the visit, you won the basket.

Now that's a big problem.

It's not a given anymore.

And so I think Kroger was looking at things like how do I take this storeless future to new regions?

Because that would be a more efficient way to break into those.

They rolled most of that back.

I don't think that's their future.

And so I, I think there's a lag between.

This is what we think the biggest problem is.

Here's the innovation, we're rolling out to solve it.

And now there's a different challenge.

So what's the innovation they're gonna roll out?

I still am a huge believer in retail media because of this.

Cause I think it raises the value of each visit.

I'm a big believer in things that are gonna boost discovery.

I think elements like increasing the caliber of products is gonna be something you're gonna hear a lot about because we'll talk about this a little bit more.

But I think value is a super opaque area and it's, it's not going to serve traditional grocery as well anymore.

But I have a lot of confidence that you're going to see exciting things from Kroger.

Yeah, that's a really interesting perspective that I haven't heard before, particularly with the new CEO coming in too.

What's his take going to be on how to do this?

And the other point too, that I think is really germane to how you frame that up too, Ethan, is where are they going and how are they trying to ameliorate the pressures?

And they've said that they're going to go into their larger formats, at least prior to the new CEO coming in.

But I'm guessing because they announced that a few weeks ago that that's prob.

Probably still on the table.

You know, that's to get the margin mix of, you know, the discretionary categories that a supermarket doesn't traditionally carry.

And that's the outgrowth of why, of, of, of why they're doing that because of what you're saying here, because that's where they're feeling the pressure.

So that's, That's a really interesting take, Ethan.

I, I guess I'm to kind of.

I was thinking along the same lines that Chris was.

And if you, we take your.

A step back and we look at, you know, you're talking unique, unique food offerings, localization with things like sprouts or Trader Joe's, and then you juxtapose that with, you know, Kroger taught what Chris just talked about talking about opening larger formats with more general merchandise and trying to fulfill more of that trip type and maybe focusing more on convenience.

Do you, do you feel like you, there's one that, that you think stands to give Kroger a better chance than the other?

And if you were advising this new CEO, like which direction would you suggest that, that, that he go in?

I like focus.

I think focus is easier to deliver on because you know exactly what you're trying to deliver.

I think going broad, like there are people who've done it.

Like Costco.

Yeah.

Costco does things that make no sense, but Costco is just so good at everything that they can pull it off.

Costco is the LeBron James of retail.

Right, but they're focused, right?

Yeah, but it, but they do things that, like why are there TVs at Costco?

Yeah.

Why are you selling long furniture?

But it works like you'll buy it there.

Again, like my, my father in law gets his hearing aids done at Costco.

Like that doesn't make sense.

But it's, it's like again, they're so good.

I don't think that that's easy to replicate.

Whereas like I'm not.

None of this is easy, but I think it's, it's easier to say we're gonna, this is who our audience is.

This is what we bring to them.

This is what we do.

Very special.

And we're just gonna keep on doing a little bit more of that.

That's an interesting point too.

Like, let's just become a better grocery store and what does that get us versus like, you know, you try to build out a, you know, a mass, mass merchandising experience like they're saying they're going to do with these large format stores.

That's going to take time, it's going to take a lot of capital.

And it's a really crowded space as we just talked about with Target.

Target's not necessarily doing that well in that space right now either because of all the competitive pressures they're facing.

So yeah, that's, that's a really interesting way to look at it, is like just become a better grocer.

If I'm putting words in your mouth.

Ethan, I'll give you an example of one that I really like.

I, if you go to Publix, they have a huge section now for like protein based foods and they're all like packaged like you're not getting a box of Quest bars, you're getting like one.

So there are these high margin Items that are almost like a convenience store perspective of like, I'm sending the single one, so I'm gonna make more dollars per.

Per entity, per.

Per unit.

And then this is an area that they clearly think is a bigger part of the shopping trip.

And so they're expanding their footprint for that area.

Like, that's.

And that's something that I. I think.

And it's like having a wider range of products.

People get pretty passionate about which products they use within that space.

And it's like the opposite of a loss leader.

It's like an I love it leader.

I don't know.

That's whatever working title.

Yes.

Yeah.

Work in progress.

It's the product I'm really passionate about that I'll make the extra trip to get.

And that's a reason that I'll go to this grocery store as opposed to another one.

That's what Trader Joe's does so well.

All right, Ethan, let's go to the next one.

Next is the direct to consumer question, and we could have titled this the digitally native question because I think it's like, you know, Allbirds was one of the digitally native communities, especially those who were like, oh, physical stores for the digitally native.

Watching Allbirds announce that they're gonna be closing all their stores.

But two is like a shot to the heart.

Now I.

It was a great analysis someone once did for us on.

On allbirds where they basically said there's just not enough turnover in the merchandise for it to be make sense in physical stores.

They should have been going through like, like wholesale relationships.

Yep.

And so.

But I do think this is.

Whenever you see something like this, it has ripples and brands get a little bit more skeptical.

So I think you're going to see a slowdown in digitally natives, like, looking for these off, you know, these.

These physical locations of these own physical locations.

But I don't think it's going to.

I don't think it's going to go away.

I just think it's going to be a much more realistic perspective of when they go into it.

It's not going to be saying, hey, how do we get 100, 200 locations?

It's going to be saying 5 to 50.

Like, we'll start off with major, major, major areas.

We'll probably have like, big malls around the country or certain areas.

But the unlimited, endless expansion potential for these digitally natives.

I think that perspective has now gone away.

Like, Warby Parker is obviously the exception to the rule, but I think they're clearly the exception.

Well, the other Thing too.

I'm glad you brought this back in because I feel like in the last two or three times we've had you on the program, we haven't touched on this topic very much.

But like, you know, to me it just comes back down to the age old question which you kind of said, which is are you a retailer or are you a CPG or a brand at heart?

Right.

And what is the business model that you're running?

And, and then make your store or your wholesale strategy an extension of that.

And that's what it comes down to.

And so, and you just test out the market.

Like you said, you go slow where you need to, but you go fast.

If you're got, if you got a good retail brand in front of you, go fast.

That was always what we said about some of those retailers too.

When during like five, six, seven, eight years ago, it'd be like, if you have such a successful retail brand, why aren't you scaling faster than you are?

Which.

And then those guys went out of business too.

So that's, that's what I take away from this discussion.

Ethan, do you agree with that?

I do.

I also think there's this weird question of, and it's like, it is an inevitable problem of like as you grow, do you grow by new locations?

Do you grow by new, by new areas, by new products?

And it's it right, like some retailers or like your point of like are you a retailer or are you a brand?

There are some that like, okay, I'm gonna expand into this market.

I can have more locations or I'm going to be more wholesale oriented.

I can have different products and there's some that just need to like, it's okay that a retailer fills a very specific void and does that well, like there might not be endless expansion potential and that's okay.

And I think it's like that's you can build an incredible business around that.

It just doesn't necessarily fit with like the quarterly earning cycle for publicly traded companies.

I think the other thing that you have to look at too is like I think Lulu's the apparel company that just expanded their footprint in Nordstrom.

I think it also is a question of, you know, one, are traditional retailers or wholesalers more interested in a new kind of partnership with these D2C players because they provide a low entry point for Nordstrom shoppers.

Like now Nordstrom's getting Gen Z and the following generations in the doors when they never would have been able to go to a Nordstrom or think they could Afford a Nordstrom.

I think you, you look at some of the.

The like, I was surprised to see that headline because you don't expect a retailer like Nordstrom to bring in a lower price brand like that.

Like it, it was counter to what Nordstrom says that they would do and kind of their ethos as a brand.

But I think that Nordstrom softened now on what it's not just a, a wholesale relationship we're going to have with them.

We actually want to give them space in the stores to kind of be the entry point for this next generation.

So I think it's also the, the changing relationship of, of these partners and what a wholesale agreement looks like, a shop and shop agreement looks like with some of their partners too, that's helping them.

They'll all win versus Lulu.

Starting a massive store expansion and not being successful.

I love that point so much.

And I also think it's like such a good antidote to so many of the challenges that a lot of department stores are facing where it's just, it's the same thing for 20, 30 years.

Like, you need to mix it up.

This is that we have rising digitally natives.

We have the brands that have these footprints.

Can you find that balance between them?

I know some have tried and it hasn't really worked out as well, but I think these are really exciting examples to look into because if they show promise, there's a lot of benefit for everyone involved.

Right.

Yeah, good point.

It's a hybrid approach.

It makes sense.

Yeah.

The other point I take away from what you said too, which I'd never thought about before I did, is like, the extent of your product portfolio matters if you want to try to become a retailer, if you want to go from brand to retailer.

Right.

Like, the Gap didn't become the Gap.

Just selling sweatshirts, you know, Auburn sold a shoe that you don't need to buy that often, and it tried to get into other categories, but it wasn't successful.

And so have you figured that out before you venture into retail and have you done the math on that, or should you take an approach, like Ann just said, like where you go, you know, hybrid or you go wholesale traditionally and make it work.

All right, what's next?

Okay, this is the thing that I am.

Haven't touched on this in a while.

I'm struggling with this a lot.

Okay.

Yeah, we did something.

We're doing it for the first time again.

Little spoiler because we got a Placer Discover coming up with our mutual friend Ben Miller from Shop Talk.

We did something we're not just looking at the data.

We did a survey of professionals in the space and we asked them some questions.

We had like hundreds and hundreds of people respond.

And one of the questions we asked was like, what segments do you think you're going to do?

Do you think they're going to grow?

Do you think they're going to be stable or decline in next year?

And a fascinating one for me was that the discounted dollar segment was basically flat, people saying positive and negative and so growth or decline.

And almost 70% said it was going to be stable.

They thought it would be stable.

And this kind of lines up with what we're seeing.

Like this is a sector that saw growth, these massive expansions, then all of a sudden, maybe they overextended.

But what's coming up for me a lot is something that piqued our interest in convenience a few years ago.

And I think it was a. I think we were correct then, which was convenience is an overrated concept because we don't know what convenient enough is or isn't right.

It's convenient enough to do, to drive really far to go to Trader Joe's, but it's not enough to go to, I don't know, insert traditional grocery name here.

I think the same thing for value.

Everybody knows value is important.

Most people that I speak to don't know how to define it.

I certainly don't know how to define it.

And as a result, I think it's an.

It's not the most useful thing to talk about because we don't really know what it means.

So people will tell you value is not price.

Value is how much do we love a product and do we feel like we're getting a good deal on said product?

That means that the important thing is not the value per se, it's.

Is the product great?

Do people perceive the product to be excellent?

Because otherwise it's circular logic.

Oh, we fail to.

They're not doing well because they don't have enough value.

They're doing well because they have value.

But we can't define what that means.

And so I'm struggling.

This idea of.

Is value.

It's clearly important, but is it a relevant thing in retail?

Because it's.

It's too abstract of a concept.

So value retail, I think, and obviously in this value segment is easy to differentiate, but I think there's a question about the conversation around value and does it matter if we don't know how to define it?

That's really interesting.

What I see, what I think of is actually, I think value is the art of retail value.

Value, to me, is the merchant.

That's where the merchandising comes in.

And there.

There is no definition of it, and that's what makes it special.

And it's different for each brand.

It's different for each retailer, and you have to discover it and put it into the minds of your consumer.

And that's what the really good retailers do really well.

That's what Costco does phenomenally well.

And they are focused on.

They know exactly what.

What metrics they want to hit, what products are going to sell for their consumer, and they provide that value to them.

Whereas when you start to get across, like, the grocery landscape or even the dollar landscape, it becomes a little less clear because, you know, value starts to play into things differently.

There aren't as many points of differentiation, but that's how I think about.

Your question is.

I think your question's right, but that's also where you make your money.

I like the idea that it's an art, and I think for me, we care about the art, but with data, you care about the numbers, right?

Yeah.

And I almost don't want to talk about value so much anymore, except to make this.

Yeah.

Because it's not a data number.

It is a. Yep.

It's a.

It's something so much more abstract.

And I really like the way you put it.

And I think the more we embrace that, that's the thing.

It also changes the notion because I think when you talk about value to so many people in the space, they do still think of price.

They're like, oh, it's about making things cheaper.

And I think a lot of retailers hurt themselves by chasing value by bringing down costs as opposed to by chasing value by making products that are amazing or making products that are perceived to be amazing.

Like, there is an element of perception here, too, that matters.

Yeah.

I mean, the one thing I always took away from my time at Target was the expect more, pay less thing is a really good measure of, like, how you should be thinking about value from a merchandising perspect.

The other thing I love about what you said too, Ethan, is I think you're 100% right.

Value, to me, is what you're showing on these slides.

It is the output.

It is the measure of the output.

Like, what the traffic number is tells me how much value there is relative at that retailer versus another.

Okay.

I think the other thing that I guess I would question here is value according to which category.

Like, if we're looking specifically at dollar store.

Yes.

There's, there's.

Do people care what plates they're using for a party or you know, the basic home essentials that you're buy the party supplies?

Those kinds of things are though, is that a category where it like value and cost is important?

Yeah, because you can, you know, you can go to a dollar store and get all these things.

But I think that changes when we start to get into other categories like apparel.

I think it starts to change when we get into categories like beauty, where value is actually, you know, more along the lines of the art of what Chris is talking about than it is about, you know, what's the cost and how does that drive traffic for one specific category?

So that's the one like question I guess I would raise when we're looking at the value question as it compares in a dollar store set versus, you know, even a general merchandise store like a Walmart or, or apparel or department store.

All great points.

All great points.

I think I realized that I was using value in a terminology in a way that was like, it doesn't actually mean anything.

Like it's, it's.

And therefore, at least for me, like, I agree with everything you're saying and I think there are people who do a good job of expressing it.

I wasn't.

All right, I want to get to one more.

I know, I know we're running over.

The reason I couldn't cut this one was because I think it might be, I think the two most important changes in underlying foundational changes from a trend perspective.

The first is consumers going to more locations, spending less time at each location and really chasing products that they love, value and, and, and experience.

I think this is the other one and it's the phases of the suburban shift.

And one of the things that's important here is again, we, we've talked about this before, but there is, there is waves of this.

People move from the city into the suburbs.

There's a first time demand of places that you didn't have access to and now you have access to.

Amazing.

You have a second level where retailers come to those areas to chase.

But then you have a third that inherently lags behind, which is the real estate component.

The shopping centers start to evolve in order to meet these demands.

They start changing their perspective from a place making point of view.

So the way that they build the centers is different in order to drive people to those places.

And I'll give you a weird example that I think makes a point none of us would say five Below is a premium category, right.

We would put them clearly in the discounted dollar lane.

Amazing retailer.

There I was sitting at a, in a shopping center where they had this really exciting high end coffee chain called Pura Vida that's like exploding in South Florida and like other places.

And it had this kind of chic, high end audience all buzzing around and a lot of them after going to the coffee were walking across the street into the five below.

And I think that there's this point is not that like Five Below is now becoming chic, but as you start bringing more of these players into these suburban environments, it's going to be more attractive for types of retailers that would have never considered those environments in the past to start considering them.

Which means that those areas are going to fundamentally change and it's going to shift the center of gravity, but it's lagging because you need to build, you need to create, you need to make changes.

And so I think we're going to start seeing this year, next year, in the coming years, the actual after effects of people realizing that there was a suburban shift three to four years ago.

I've not thought about that.

That's a really good point.

It doesn't surprise me though, given that we've had you on the show talking about this, this shift in the past.

So you think it's going to become even more augmented here going forward?

I think it's going to be enormous.

I think that's the reason, like I think this is massive because if great shopping centers and they start getting more high end, they start getting exciting, people want to spend more time there.

And if they want to spend more time there, all of a sudden retailers and restaurant chains and places that wouldn't have expected to be there in the past are like, maybe I should consider this place because there's not enough great locations.

So now I want to go there to chase this audience, audience.

And so there are ripples.

If this goes, it changes the landscape in a really powerful way.

Ethan.

I think that there's also this component of, you know what, not to bring in the value equation again.

But the things that we're looking at on the slide are Nordstrom Rack and Ross Dress for Less.

And I think when you look at what's driving the next generation to those suburban shopping centers, they are looking for value, they are looking for price.

And so I think that this, this, this, these two obviously Nordstrom Rack and Ross Dress for Less are hitting on that higher quality, lower price point in the, in that like value equation.

But then you also have five below, which is the, you know, destination for that next generation.

That is the thing that they're wanting to go and do.

And so I, I wouldn't be surprised if we continue to see, as you're suggesting, I think this mix of like, what's, what's the value that you get from going to these places, walking around, grabbing your coffee and shopping and getting all you need from a variety of retailers that offer value in different ways.

And this redefined chic, like, what's cool, what's exciting, belongs together as a result.

One last like thing I'll say about this is we were once talking to a mall owner who said a mall is the sum of its parts.

So the brand of a mall is based on the retailers that are in there.

And we push back pretty hard.

I grew up in New Jersey.

The Short Hills Mall in New Jersey is the fancy mall in our area.

If you are, I don't know, Ethan's Boutique Beauty Shop coming soon.

And I launch in the Short Hills Mall.

I'm immediately fancy.

So there is, yes, a mall is the sum of its parts, but it also over time becomes that and can imbue that brand onto the places that come inside of it.

And I think as these shopping centers change, it changes the things that brands can get from being inside of them.

So put some tangibility to this discussion to me.

So like, so if you say like the average suburban shopping center that you're, you're talking about now is X, what do you envision it turning into five years from now?

I think it's going to have more high end coffee places and restaurants.

I think you're going to see more people sitting there throughout the day.

I think you're going to have more digitally natives that are thinking about their 10 to 30 locations.

Okay.

You're going to find that some of them are in these, they're in the major malls, they're in some big cities and then they're also in these random, like, why are you in this suburban, high end, open air shopping center, high traffic area?

I think there's going to be an attraction of the places that you wouldn't normally expect and it's going to change the dynamic.

And part of this is going to be driven by the fact that there's just not enough space.

So that competition for space, you know, if it's great spaces in the suburban environment, the suburban environment is getting more exciting.

All right, let's take that dart throw because there aren't enough places to go.

Right?

Right.

Okay.

Wow.

Be fun to watch.

Fun to watch, for sure.

All right.

Is that it, or do you have something else for us?

That's what I've got, guys.

You're out.

You're out.

All right.

All right.

Well, that was great, man.

Thanks for doing that.

Yes, thanks, Ethan, for playing along and letting us ask and pepper you with all kinds of questions, whether you were prepared for them or not.

Yes.

All right.

Well, thank you, Ethan.

We really appreciate you and your time and your research, as always.

If people want to get in touch with you to learn more about Placer and how they can add insights like the ones you shared today to drive their business, what's the best place for them to do that?

So you can reach out to me at ethanlacer AI.

If you don't want to talk to me, you can reach out to IdeaSlacer AI or you just check out our website.

We have a free version of our premium product.

Excellent.

Thank you so much.

Thanks to all of you who followed along with us today live.

That wraps us up.

Thanks, Ethan Chernovsky of Placer AI for sitting down with us.

And thank you to our producer, Ella Sirjord, who brought you all of this content.

As always, on behalf of all of us here at Omniton, be careful out there.