Reimagining Retail: The Unofficial Most Interesting Retailers List (January)

On today's podcast episode, we discuss the unofficial list of the most interesting retailers for the month of January. Each month, our analysts Arielle Feger, Becky Schilling, and Sara Lebow (aka The Committee) put together a very unofficial list of the top eight retailers they're watching based on which are making the most interesting moves: Who's launching new initiatives? Which partnerships are moving the needle? Which standout marketing campaigns are being created? In this month's episode, Committee members Analyst Arielle Feger and Senior Analyst Sara Lebow will defend their list against Senior Analyst Zak Stambor and Analyst Rachel Wolff, who will dispute the power rankings by attempting to move retailers up, down, on, or off the list.

Subscribe to the “Behind the Numbers” podcast on Apple Podcasts, Spotify, Pandora, Stitcher, YouTube, Podbean or wherever you listen to podcasts. Follow us on Instagram.

Episode Transcript:

Sara Lebow (00:01):

Hello, listeners. Today is Wednesday, January 29th. Welcome to Behind the Numbers, Reimagining Retail, an eMarketer podcast. This is the show where we talk about how retail collides with every part of our lives. I'm your host, Sara Lebow.

(00:16):

Today's episode topic is our January unofficial most interesting retailers of the month list.

(00:27):

Should we make that shorter? No, I think it works every time. Let's meet today's guests. Joining me for today's episode, we have in the studio with me, Arielle Feger. Hey, Arielle.

Arielle Feger (00:39):

Hi. New Year. Still happy to be here.

Sara Lebow (00:41):

New year. Same you.

Arielle Feger (00:42):

Yep.

Sara Lebow (00:43):

Also with us in the studio is Rachel Wolff. Hey, Rachel.

Rachel Wolff (00:48):

Hey there. Thanks for having me.

Sara Lebow (00:48):

Thanks for being here. And joining us from, well, I was going to say overseas, but it's over Lake Michigan, technically. Joining us from Chicago is Zak Stambor. Hey, Zak.

Zak Stambor (01:00):

Hey, guys.

Sara Lebow (01:01):

This is I guess my new thing where I just tell everyone where we all are.

Zak Stambor (01:04):

I like it.

Sara Lebow (01:05):

Let's jump into our unofficial most interesting retailers of the month list.

(01:15):

Arielle and I, we're the committee, will present our list in the first half of this episode. In the second half, Zak and Rachel will have the opportunity to edit our list. So here is our list. At number eight, we have Best Buy. Arielle, tell us more.

Arielle Feger (01:32):

So Best Buy is launching a third party marketplace. Now, this is the second time that it's going to be trying this. Hopefully, this will be more successful than the first. It's partnering with Mirakl to launch the marketplace sometime this summer, and it's just a pretty interesting opportunity for both on the commerce side and on the ad side. So we think it's a pretty interesting opportunity.

Zak Stambor (01:56):

I think they're going about this in a pretty smart way. They're not trying to be everything for everyone. They're being really targeted with it, and they're just trying to focus on expanding the selection of stuff that makes sense in line with Best Buy. So the example that they used is cell phone cases. Instead of stocking every cell phone case on the planet, they'll just rely on marketplace sellers to do so. And so I think it's going to be successful. I think this is a good move.

Sara Lebow (02:25):

I got to give Arielle props for accurately predicting that more businesses would be launching third party marketplaces this year.

Arielle Feger (02:32):

That is one of my own predictions.

Sara Lebow (02:34):

Okay, number seven, Poshmark. Arielle, why is Poshmark on the list?

Arielle Feger (02:39):

So Poshmark is partnering with Loop to enable customers to return items that were either final sale or the return window had closed. It seems pretty easy. All they have to do is click a button, and the listing will be filled in from details that Loop has. And I just think it's a really interesting kind of in-between step between the full returns process that a retailer deals with and peer-to-peer returns. And we know returns can be very costly, very hard to deal with for retailers. So I kind of like that this is a step in the middle in helping to ease some of that burden on retailers.

Rachel Wolff (03:15):

Yeah, I think it's kind of a win-win, right? If you're a customer, and you have this unwanted merchandise, it's a great way to get it off your hands and potentially recoup some of that investment. And I think it's also great for the retailer because it means you can have a more restrictive returns policy, but offer something like this as a consolation prize in a way.

Sara Lebow (03:32):

Is the item going back to the retailer, or is it being listed peer-to-peer on Poshmark?

Rachel Wolff (03:37):

I think it's being listed peer-to-peer.

Sara Lebow (03:38):

Gotcha.

Rachel Wolff (03:39):

Yeah, I don't know for sure though.

Sara Lebow (03:40):

Yeah, so it's not even really a return when you think about it, but you still get money, so it still feels like one. Okay. Number six, TJ Maxx. This is because of some research that came out from Earnest Analytics this month stating that new TJ Maxx stores were successfully taking share from rivals Ross and Marshalls in the same zip codes. We've been keeping an eye on discount stores as people search for low prices so this felt like an interesting trend to me.

Arielle Feger (04:07):

Well, I think it's kind of interesting considering the brand appeal of TJ Maxx. I feel like on TikTok you'll see TJ Maxx hauls or things like that. I think maybe it just has a younger brand appeal for younger consumers, so I just think that maybe it's succeeding in that.

Rachel Wolff (04:25):

Yeah, I think it also has to do with the kind of merchandise they sell, right? TJ Maxx has reputation for having more designer goods, and because of that it pulls in a younger audience.

Sara Lebow (04:34):

Do you guys have any loyalty to any of these retailers?

Rachel Wolff (04:37):

None whatsoever.

Arielle Feger (04:39):

I think I like TJ Maxx.

Sara Lebow (04:40):

I grew up shopping at Marshalls, so I'm a Marshalls head still. Zak?

Zak Stambor (04:44):

Not at all. No. I just went to a TJ Maxx for the first time in quite some time, and it was fine. It's not in my regular rotation.

Sara Lebow (04:55):

I'm surprised you said it was fine. I feel like anytime you go to any kind of retailer that is at all chaotic, you are like-

Zak Stambor (05:02):

Yeah, no, it's true.

Sara Lebow (05:02):

"I hated it."

Zak Stambor (05:04):

I knew going in to expect it, and so I was prepared.

Arielle Feger (05:08):

It's a very specific experience.

Sara Lebow (05:10):

Yeah, the thrill of the find.

Zak Stambor (05:12):

Yeah.

Sara Lebow (05:12):

Okay. Number five, Target. Target is engaging in what I'm calling January behavior. They introduced 2000 new wellness items, and they are making a deal with Spider-Man star, Tom Holland's non-alcoholic beer brand. Was that the right thing to pick for Tom Holland? I was going to go with Zendaya fiance, but I went with Spider-Man star.

Arielle Feger (05:33):

I think let's let him have the spotlight.

Sara Lebow (05:36):

Or former Billy Elliot.

Zak Stambor (05:38):

Oh yeah.

Sara Lebow (05:39):

For our Broadway heads.

Rachel Wolff (05:40):

I feel like that's niche.

Sara Lebow (05:42):

Target is capitalizing on New Year's resolutions, or they capitalized on New Year's resolutions both with wellness and with Dry January. And we haven't talked much about this, but you are always seeing headlines about Gen Z is drinking less, so it also makes sense for them to be partnering with a non-alcoholic beer brand.

Arielle Feger (06:00):

Yeah, I think that Target kind of has to find little, I mean this isn't little, but kind of more niche ways to connect with its audience, considering how it's really stacked against Walmart and Amazon. So I think anytime it's really trying to carve out a space for itself, I applaud it.

Zak Stambor (06:19):

Yeah, I agree. I think the interesting thing here is that it's 2000 new products, but 600 of them are exclusive to Target. If you go in, you like it, and you buy it, and it's exclusive to Target, you're going to come right back to Target. And so I think it's a really smart play.

Sara Lebow (06:36):

Yeah. Okay. Speaking of retailers that Zak finds chaotic, number four, Costco. Arielle, why Costco?

Arielle Feger (06:43):

So I think it's really interesting. Costco has been really fully behind DEI initiatives during a period where a lot of retailers are pulling back their DEI programs. The Costco board has really endorsed DEI, saying that it enhances the retailer's capability to attract and retain employees who then help their business to succeed. So I think just for the simple fact that they're standing behind it, I think is interesting, and I think it's worth mentioning. Then again, they are also going to be seeing a strike possibly. So those are two, they're not related necessarily, but it is interesting to see Costco in the news for two very different reasons.

Zak Stambor (07:32):

The one thing the DEI is appealing to probably a sizable share of Costco customers, but then right away that strike I think is a black mark. And so how does that balance out? I'm not quite sure.

Rachel Wolff (07:48):

In their defense of DEI, they really made sure to paint it not just as a business decision, but to say this is the kind of corporate culture that we want to build, so I think is also notable.

Sara Lebow (07:58):

Yeah, especially during a month where so many other companies found ways to align with the current administration. Number three, Sephora. This one's really exciting to me. Last week, Sephora launched a Hulu show featuring stars like Chappell Roan and Becky G. She's the one who sings "Shower" in Get Ready With Me style videos. I think this is fascinating. It has everything, streaming services, beauty, TikTok style content, adapted for long form and up and coming pop girlies, not to mention Chappell Roan, who not to brag, but I saw over a year ago before she blew up, but someone who I haven't seen doing a lot of sponsored content too and is definitely an It girl and known for her makeup. I'm really interested in seeing how a retailer streaming celebrity collab performs and how short form content adjusted for long form performs.

Arielle Feger (08:55):

Yeah, I think this is just really fun, and I love it.

Zak Stambor (08:58):

I love it as well, and I love that it is seemingly taking a relatively light touch with the content marketing push. It's totally a big commercial for Sephora, but it doesn't have that same sort of heavy-handedness of the Amazon "Buy It Now" show, which I actually do really like. It's kind of fun to watch. Or the Walmart "Jingle Bell Love" movie or the "Add to Heart" romcom. Those were extremely unsubtle, and this is-

Sara Lebow (09:37):

What are we talking about?

Arielle Feger (09:42):

Sara's face. She just got so upset. That was like Walmart shoppable media push.

Zak Stambor (09:45):

Yeah.

Rachel Wolff (09:46):

And doesn't Chick-fil-A have its own content?

Arielle Feger (09:48):

Yeah, they have a streaming platform.

Zak Stambor (09:51):

Yeah.

Arielle Feger (09:51):

Yeah. I think Zak's right. The light touch is, I think is really important to make it so people will have fun with it. They're not going to feel like they're just being bombarded with an ad or anything.

Sara Lebow (10:04):

That's what works in Get Ready With Me videos.

Rachel Wolff (10:06):

Exactly.

Sara Lebow (10:07):

I would watch a sponsored Get Ready with Me video because, sure, one product is from a certain brand or all the products are from a particular retailer. I still want to see those products. I still want to see how a particular makeup artist applies them.

Arielle Feger (10:20):

And the music, I think that's such a big part of it too. As someone who spent a lot of their 20s listening to music and getting ready to go out on the town.

Sara Lebow (10:29):

Okay, brag. Arielle was cool in her 20s.

Arielle Feger (10:32):

Yeah, no, I just think it's a really fun way to bring it all together.

Sara Lebow (10:37):

Number two, Temu. Arielle, why Temu?

Arielle Feger (10:40):

There's a little bit of a pivot here. So Temu is going to be piloting paid search ads for its marketplace. It's also going to start an app at marketplace with inventory, logistics, management and other tools. I think it's a big deal considering how the competition that Temu has already given Amazon, adding an ad component, I think just kind of really adds fuel to that fire. But that being said, it is going to have to really delicately balance both the customer experience and pricing. If prices get too high, customers won't come to the platform. So I'm really interested to see what happens, but there is definitely a bit of a tightrope walk there.

Rachel Wolff (11:28):

Yeah, it's interesting because a lot of Temu's appeal for merchants is that you don't currently have to pay for advertising the same way that you do on Amazon. So I wonder, by implementing this, does this affect how many merchants are willing to make the shift?

Sara Lebow (11:40):

Yeah, I think it might affect merchants. I don't think it'll affect customers. You don't go on Temu to have a good customer experience. That might be a hot take, but it's so cluttered there already. Ads are expected clutter. I think a lot of customers will be surprised that there weren't ads before and maybe won't notice their influx.

(12:00):

Flipping the switch on that, number one, Amazon, for making its ad tech available to other retail media networks and for penalizing brands that are listing on Temu. We just talked about Temu, so I won't go too much into that. But the ad tech thing is fascinating. Retail media and commerce media right now is propped up by a giant network of ad tech companies that we know and love. Amazon is the biggest player in commerce media. They own like 75% of the market, and making their ad tech available for other networks both makes it easier to launch a media network and means that Amazon advertisers can potentially advertise with those networks easier. So that's a huge move for Amazon.

(12:44):

And Amazon has been on our list almost every time since we've started making this list, which is mainly because they have the capital to do something every month. But this one, I think, stands out.

(12:56):

So to recap, our list is number eight, Best Buy. Number seven, Poshmark. Number six, TJ Maxx. Number five, Target. Number four, Costco. Number three, Sephora. Number two, Temu. And number one, Amazon.

(13:15):

We also always throw in two honorable mentions. We've got number nine, L'Oreal, for launching a new technology that helps you pick out skincare products associated with your skin type. And number 10, Albertsons, for launching a new API that helps brands advertisers with measurement.

(13:33):

Okay, now it's time for our second half where Rachel and Zak get to tell us where we went wrong. Each of them will have a chance to move a brand up or down on our rankings list and to add a new company entirely. So Zak, make a move.

Zak Stambor (13:49):

Yeah, I'm going to move TJ Maxx. I think I'm going to move it all the way off. It's not particularly interesting this month. It's doing well. It's performed very well, actually, over the past year. It's stock, I think, is up almost 28%. But in terms of looking at this particular moment in time, I don't see anything that necessitates its placing on the list.

Sara Lebow (14:17):

Arielle, why did we have TJ Maxx at six above Poshmark and Best Buy?

Rachel Wolff (14:22):

Vibes.

Arielle Feger (14:22):

I don't know. I feel like you feel really passionate about TJ Maxx. That's why.

Sara Lebow (14:28):

I'm being thrown under the bus.

Zak Stambor (14:28):

So it's a pretty easy case to make that, yeah, Poshmark, super interesting, clever solution to a legitimate problem. Best Buy, sure. It's like taking a fairly elegant solution to the marketplace issue to broaden its inventory mix. TJ Maxx is just doing TJ Maxx.

Arielle Feger (14:49):

I mean, I think the reason we included TJ Maxx on this list is just because I think so many, we've really seen over the past year, a lot of retailers struggled. TJ Maxx has been, as Zak pointed out, consistently doing well.

Sara Lebow (15:04):

And bringing people into their stores.

Arielle Feger (15:06):

Yeah, and the fact that it's kind of gaining, maybe not, we don't know if it's sales share, but physical location share from other companies that are doing the same thing. I think it's interesting. That being said-

Sara Lebow (15:23):

We can move them to number eight.

Arielle Feger (15:24):

I'm not mad about moving them down.

Sara Lebow (15:26):

All right, TJ Maxx is number eight. Congrats, Zak.

Zak Stambor (15:28):

Okay, there we go.

Sara Lebow (15:29):

Rachel, make your move.

Rachel Wolff (15:32):

Well, I was going to do TJ Maxx, so now I got to pick another.

Sara Lebow (15:32):

No, that's fine.

Rachel Wolff (15:36):

I actually, I think I would move Poshmark up a bit just because I think I would move it above Target because I think what they're doing with returns is super interesting. I think it could be an example that more retailers take. This could be the push that gets them to sign up with Loop to manage their returns, for example. But I just think, especially given the timing, right, it's January, retailers are drowning under the weight of holiday returns. A partnership like this could be something that more of them consider.

Zak Stambor (16:03):

Yeah, I would put it above Costco as well. I think it's a really interesting move.

Arielle Feger (16:07):

Wow. That's... Okay.

Sara Lebow (16:09):

Okay, so you want to move Poshmark above Target and Costco? I can definitely see it above Target because what Target is doing is ultimately launching more products, and Target is a store that sells products. Costco's DEI moves felt really bold to me when they came out, and I do feel like they've lost some of their sheen, especially with this potential strike. So I would be open to moving Poshmark to that spot.

Arielle Feger (16:36):

I'll say, yeah, with the caveat that I do still really appreciate Costco's stand.

Sara Lebow (16:43):

Okay, so with those two moves made, let's see what wild cards you want to introduce. Rachel, what's your wild card, and where will you put it?

Rachel Wolff (16:51):

So my wild card is Charlotte Tilbury, and I'm going to put them, I think, in the seventh spot.

Sara Lebow (16:56):

Okay.

Rachel Wolff (16:57):

And the reason I think they're interesting is because they're taking this really interesting approach to combating dupe culture, which is a growing problem that a lot of beauty brands are facing, given that shoppers just want cheaper versions of name brand products. But they're launching this campaign called Legendary. For a Reason. They're bringing in Kate Moss. So it's a pretty bold-faced campaign. And the idea is to highlight why you should buy their, I don't know, $80 foundation as opposed to the $7 e.l.f. version. I don't know if those are the actual prices. I'm just making a guess here. But I think this is something that we're going to see more beauty brands do as they try to carve out their space, their moat basically, and keep these dupes from taking their sales.

Arielle Feger (17:41):

Where did you want to put them again?

Rachel Wolff (17:43):

I would put them number seven. So where Poshmark was, basically just taking their spot.

Sara Lebow (17:49):

So they would kick TJ Maxx off, and they would be above Best Buy. What makes this different than any other campaign?

Rachel Wolff (17:58):

I think it's that they're calling out dupes specifically at a time when brands like e.l.f. Are leaning into sort of the dupe label. So I think it's worth noting that this is going to be a huge focus for these brands going forward.

Arielle Feger (18:11):

Yeah, I think it is interesting that they're really pointedly making a case for don't buy dupes, buy our product because we're original, we're this.

Sara Lebow (18:21):

I'm open to putting Charlotte Tilbury on and kicking off TJ Maxx, but I don't think it goes above Best Buy. I would put it in number eight.

Arielle Feger (18:27):

I agree.

Rachel Wolff (18:27):

I accept that ruling.

Sara Lebow (18:29):

Zak, what's your wild card?

Zak Stambor (18:30):

I cannot believe that a retailer that I think was one of undoubtedly the most interesting-

Sara Lebow (18:30):

Oh god, what did we miss?

Zak Stambor (18:40):

... retailers of the month is not on the list, and that's JCPenney. JCPenney had such an interesting month.

Arielle Feger (18:47):

Tell us more, zak.

Zak Stambor (18:49):

Yes.

Arielle Feger (18:50):

I've been on a JCPenney beat, but...

Zak Stambor (18:53):

So JCPenney merged with SPARC Group, which is the owner of brands like Lucky and Aeropostle and Eddie Bauer and Brooks Brothers to form a company called Catalyst Brands. And it's a really big company. It generated $9 billion in revenues last year. It has like 1800 stores, and they have a pretty interesting vision where they're going to pull together the data from all these different retailers, which all together have like 60 million customers, to hope to create an entity that's bigger than the sum of its parts. And they want to use that data to develop personalized shopping experiences, develop loyalty programs, pitch people on credit card programs and cross-sell.

(19:38):

Now, undoubtedly the devil is in the details in how this plays out. I don't know that the Brooks Brothers customer has anything in common with the JCPenney customer. That said, this is a really interesting play, and it's bold, and I think it should be probably about number four or five on the list.

Arielle Feger (20:00):

Well, I mean, I agree with you that it's a big merger. I think it all sounds cool, but for JCPenney itself, I don't know what... I'd like to see more about what they're going to do with the JCPenney brand before I really mark it as interesting because, yes, they have a lot of data, they have a lot of stuff that they could do or plan to do, but none of that's really rolled out yet. So I think it's a little early days for me personally, but I do look forward to seeing what happens. Sara?

Sara Lebow (20:39):

I mean, I didn't know that, what was it, $8 billion figure?

Zak Stambor (20:42):

$9 billion.

Sara Lebow (20:43):

$9 billion.

Zak Stambor (20:44):

It's $9 billion and 1800 stores. This is, it's a big, big company total.

Arielle Feger (20:52):

But that's the whole of them. So that's not a crazy amount for five or six different brand.

Sara Lebow (20:59):

But it's a crazy number of customers to now have detailed data on.

Arielle Feger (21:02):

Yeah, I just...

Zak Stambor (21:03):

And 60 million customers is a lot of customers, and that does open up-

Arielle Feger (21:08):

But to your point, are Brooks Brothers people going to shop at JCPenney?

Zak Stambor (21:08):

Right.

Sara Lebow (21:12):

But it's still an interesting move.

Zak Stambor (21:13):

So there is not alignment with Brooks Brothers and JCPenney, full stop. But let's look at the other brands, Eddie Bauer or Aeropostle, like those brands, I think they do, and I think it makes a lot of sense. And so yeah, there's a few outliers here and there, but I think overall, the vision kind of makes sense to me. I mean, again, it's execution matters, and so how it actually plays out, it will determine the ultimate success of this, but it's undoubtedly an interesting play.

Sara Lebow (21:44):

I think this is interesting. I think, sorry, Rachel, that it's more interesting than Charlotte Tilbury, and so that it should bounce them off the list.

Arielle Feger (21:52):

Yeah, that's fair. Yeah, I would say it is a more interesting. Sorry, Rachel.

Rachel Wolff (21:52):

It's okay.

Arielle Feger (21:56):

... than the Charlotte Tilbury thing. So by that transitive property then yeah.

Sara Lebow (22:00):

We toss them in at eight. Sorry, Zak.

Arielle Feger (22:02):

Sorry, everyone.

Zak Stambor (22:03):

Okay, I'll take it.

Arielle Feger (22:04):

It's on there.

Zak Stambor (22:05):

Heck yeah.

Sara Lebow (22:06):

So our final list we have is number eight, JCPenney. Number seven, Best Buy. Number six, Target. Number five, Costco. Number four, Poshmark. Number three, Sephora. Number two, Temu. And number one, Amazon. That also puts Charlotte Tilbury in honorable mention category area as well as TJ Maxx.

(22:33):

Okay, that is all we have time for today. So thank you so much for being here, Arielle.

Arielle Feger (22:38):

This was super fun. Thank you.

Sara Lebow (22:40):

Thank you, Rachel.

Rachel Wolff (22:41):

Thanks.

Sara Lebow (22:42):

Thanks, Zak.

Zak Stambor (22:43):

Yeah, thanks for having me.

Sara Lebow (22:44):

Thank you to our listeners and to our editing team that edits the podcasts. We'll be back next Wednesday for another episode of Reimagining Retail, an eMarketer podcast. And on Friday, join Marcus for another video episode of Behind the Numbers.