On today's podcast episode, we discuss the unofficial list of the most interesting retailers for the month of March. 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 Senior Director of Content Becky Schilling and Analyst Sara Lebow will defend their list against Principal Analyst Sky Canaves and Analyst Rachel Wolff, who will dispute the power rankings by attempting to move retailers up, down, on, or off the list.

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Episode Transcript:

Sara Lebow:

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Hello, listeners. Today is Wednesday, March 26. Welcome to Behind the Numbers: Reimagining Retail, an eMarketer podcast made possible by Trax. This is the show where we talk about how retail collides with every part of our lives. I'm your host, Sara Lebow. Today's episode topic is our March unofficial, most interesting retailers of the month list.

Before we jump into our list of our top eight most interesting retailers, let's meet today's guests. Joining me for today's episode we have back after a bit of a pod hiatus, Becky Schilling. Hey, Becky.

Becky Schilling:

I'm back.

Sara Lebow:

Welcome back. Also with us is one of our analysts, Rachel Wolff. Hey Rachel.

Rachel Wolff:

Hey, Sara.

Sara Lebow:

And also joining us is another analyst, Sky Canaves. Hey, Sky.

Sky Canaves:

Hey Sarah. Glad to be here.

Sara Lebow:

Glad to have all of you. Okay, let's jump into our most interesting retailers of the month list. As our listeners will know, Becky and I, we're the committee, will present our list in the first half of this episode, and in the second half, Sky and Rachel will have the opportunity to edit our list. So here is our unofficial list of our eight most interesting retailers of the month. Number eight, Reebok. Becky, why Reebok?

Becky Schilling:

So Reebok is getting back into golf and while I'm not a huge fan of the sport, millions of people in this country are, 45 million in fact. My father, shout out to him. The move signals the shoe giant's move to position itself back into team sports, but keeping its professional edge as well. Team sports are such a huge thing in this country, especially with kids, and so it signals a great move for them to try to stay competitive.

Rachel Wolff:

One fun fact that I learned while researching Reebok and golf is that Millennials and Gen Zers make up over one quarter of golfers and their proportion is growing. So I think it makes sense for Reebok to really lead into that space.

Becky Schilling:

So you're telling me it's not just my dad?

Sara Lebow:

Becky, where'd you get that number for how many people in the US are golf fans?

Becky Schilling:

It was a Fortune magazine article, I believe.

Sara Lebow:

All right, well good for those people. I don't care about golf at all, but-

Becky Schilling:

It's good for a nap.

Sky Canaves:

I think it's a great nostalgia category as well. I was going to say I think it's a great nostalgia category as well. As a Gen Xer, I have fond memories of Reebok as my first trendy sneaker shoe brand, and this was in the 80s, and I've just started looking at golf as something that I might do as an activity at some point.

Rachel Wolff:

I will say it is more fun than it looks.

Sky Canaves:

I think I'm aging into that.

Sara Lebow:

Golfing?

Rachel Wolff:

Yes.

Sky Canaves:

Yeah.

Rachel Wolff:

You get to whack a ball as hard as you can. I mean...

Sara Lebow:

What's the saying, a good walk ruined?

Rachel Wolff:

That's true. I mean that is also true.

Sara Lebow:

All right, number seven, Bath & Body Works. Bath & Body Works made the list for launching a new store design with an updated layout. It says the layout is more focused on Gen Z. And one of the ways that it's getting Gen Z involved is a new scent bar where people test different scents of not just Bath & Body Works iconic body sprays, but also candles, flowers I saw on there, just various different things that have to do with scent, which we know that perfume is a growing category right now.

Rachel Wolff:

Yeah, I mean, I think this is pretty low-hanging fruit. People like to smell things before they buy. I was kind of surprised that they didn't already have a similar function.

Sky Canaves:

Yeah, me too. I'm thinking can't you smell everything in the store as a... Don't they at least have a sample of each product that you can smell since they are scented products?

Becky Schilling:

That's the problem though, all the scents come together and you can't smell them. So I'd be very interested to see how they're actually going to make it to where you can smell an individual scent.

Sara Lebow:

Bath & Body Works to me is one of those mall stores that you walk in and you get a headache right away from all the scents. But now I've complained about two different things on this episode, so I think I have to stop for a little bit. Number six, CVS. Becky, tell us why CVS made the list.

Becky Schilling:

So drugstores are hurting, that's not a shock to anybody, but it looks like the retailer is trying to focus on its core business of pharmacies. It's opening 12 new small format stores that will focus on just the full-service pharmacies with limited retail offerings. The average is less than 5,000 square feet. It's an interesting move by a retailer to become less focused on retail, but to save its big business. So it's an interesting move in that part. And if you are looking to learn more about drugstores, check out our podcast for Monday where we talked about Walgreens.

Sara Lebow:

Yeah, so they're doing a convenience store kind of format. Go ahead, Sky.

Sky Canaves:

A convenience store with a pharmacy though. So my first reaction to this was a smaller store. Does that mean they'll be able to stop locking up the products if their employees can then see who's in the store and what they're looking at? I think it's an interesting move with the pharmacy focus, but I see the future of pharmacy as increasingly digital and online because nobody wants to go to the pharmacy to pick up a prescription. You want it brought to your home, and that's really where the future of pharmacy is, maybe not in stores. And we see other retailers with struggling formats like department stores like Macy's rolling out small formats. And if your big picture is struggling and going downhill, just shrinking it isn't necessarily going to solve the problems. And I think Macy's has found that too. They touted these smaller stores and now they're actually closing some of them.

Sara Lebow:

Number five, Louis Vuitton for launching a beauty brand with makeup artist Pat McGrath. So I didn't realize this until Becky pointed it out to me, but this is Louis Vuitton's makeup debut. I assumed they had a beauty brand. They do not.

Sky Canaves:

But it's actually not. So I learned that Louis Vuitton had a cosmetics line literally like 100 years ago in the 1920s. It was very small. I think it was compacts and makeup brushes, but it was something and yes, that's like an eon ago in [inaudible 00:06:43].

Sara Lebow:

Wait, so when did they get rid of that 1920s beauty brand?

Sky Canaves:

I don't know.

Rachel Wolff:

Yeah, I mean, to your point, I was shocked that they hadn't done this even a few years ago when beauty was experiencing this huge boom, and I think it's smart to get Pat McGrath on board. She has a pretty dedicated following and it will certainly help boost the brand among beauty or makeup savvy consumers.

Sara Lebow:

Yeah, Pat McGrath is an older makeup artist. How old is she? She's 54. Okay, so not that old.

Becky Schilling:

Hey.

Sara Lebow:

Sorry. She's not that old, but she's not like a young Gen Z trendy makeup artist. But she has gone really viral.

Sky Canaves:

She's a legend. She's been around.

Sara Lebow:

Yeah, she's a legend and she's gone viral-

Sky Canaves:

She's been around since the 90s.

Sara Lebow:

With younger people, recently she went viral for these looks that she had in I think a fashion week runway where she had these-

Rachel Wolff:

So cool.

Sara Lebow:

What were they? Like a gel face mask over makeup-

Rachel Wolff:

It was like glass skin or something.

Sara Lebow:

It looked so cool. So yeah, I think she's a smart person to partner with because she's legacy and she's still relevant today.

Sky Canaves:

And she has her own beauty brand, but there have been some struggles there and I think it's more around the executive side of the brand and the people running the brand. So I think with Louis Vuitton she'll be in better hands. And then of course it's going to have the automatic distribution through Sephora, which is owned by Louis Vuitton's parent company, and there will surely be premium placement for that launch as well. So expected to do pretty well.

Sara Lebow:

Okay, so welcome back Louis Vuitton beauty brand, back for the first time since maybe the Great Depression. Number four is Poppi. Poppi which is a prebiotic soda brand, was just acquired by PepsiCo for close to $2 billion. I think this is really interesting because we had Coca-Cola on our list last month for launching its own prebiotic soda brand. I want to once again, like I said last week, say that prebiotic is kind of one of these marketing health terms. It doesn't really exist. What is prebiotic? But these health soda brands are really strong products with strong marketing right now. Coca-Cola clearly thought that it needed one in the market, and PepsiCo responded by acquiring Poppi. So we can see how important these brands are to the major distributors.

Rachel Wolff:

Yeah, I think to your point, these are really zeitgeisty products. People are interested in these so-called functional foods and beverages that promise to improve your gut health or give you more protein and all those kinds of health concerns. And it fits in neatly with what the other work that Pepsi is doing to make its portfolio more appealing to health conscious consumers, adding more whole grain options or smaller portions, all of that work.

Sara Lebow:

Yeah, presumably now you will also, this is just an assumption, but I think it's a fair one, be able to get Poppi anywhere that distributes Pepsi products. So the age-old joke is like, do you have Coke? No, but we have Pepsi. Those places will have Poppi now. So Poppi, which is already a huge brand online, will keep getting bigger as you're able to get it in stadiums and maybe on airplanes.

Sky Canaves:

And I already see it in stores everywhere and its other competitor Olipop, they just seem to have gotten everywhere in front of me, by the cash registers at the supermarket, right next to the cases with the traditional sodas. But I think a challenge will be these are relatively premium products and they're up against big competition as well from the flagship brands that frankly taste a little better. And I think that's maybe a challenge. Maybe as a parent, I think that's maybe one reason I would buy is if your kids haven't gotten into real soda yet, maybe you can fool them with this better for you soda

Sara Lebow:

Number three, Ulta. Becky, why's Ulta on our list?

Becky Schilling:

So Ulta is launching a marketplace for select invited brands and they're also adding some more personalization to its e-commerce business. Ulta's new CEO has acknowledged that the company made several self-inflicted mistakes recently and they lost beauty share last year. She's hoping that these changes will help elevate the guest experience.

Sara Lebow:

I want to shout out fellow committee member, pod regular Arielle who predicted that more third-party marketplaces would launch this year. And I'm pretty sure she specifically predicted that Ulta would launch one.

Rachel Wolff:

Yeah, I mean it's a pretty safe bet to make at this point. I mean, we've seen Best Buy do the same thing, where it's an easy way to just add more products, brands to your lineup, and it's also an advertising opportunity, right?

Sara Lebow:

Yeah.

Rachel Wolff:

With your marketplace, you can get these brands to sponsor their placements and it's just another revenue stream.

Sky Canaves:

I think any company that's trying to follow the Amazon playbook in building a retail media network has to understand that a lot of that growth has come from the marketplace. And so we increasingly will see that they want to bring on board advertisers and new advertisers are best positioned to come from the new merchants. You can exponentially increase your pool of potential advertisers with a marketplace and avoid some of the tensions you have with your existing suppliers and the marketing budgets and shifting them to retail media.

Sara Lebow:

Number two, we have Unilever, which claims to be investing half of its ad budget in an influencer-first strategy is what they're calling it. Unilever's investment in influencer marketing will rise from about 30% of that ad budget to about 50% of their total ad spend. A quote from their CEO Fernando Fernandez said, "There are 19,000 zip codes in India. There are 5,764 municipalities in Brazil. I want one influencer in each of them."

Rachel Wolff:

I think it makes sense. Our own research shows that social media is Gen Zs favorite place to discover new brands and products. So given that, I think it makes sense for Unilever to really go after those audiences and target them where they are.

Sara Lebow:

What I'm curious about here is if they're going to be using influencers mainly for cosmetics, beauty, health products or if they're also going to be using them to market things like food and other sort of grocery CPG?

Sky Canaves:

I think they need them for everything. I think they see the way the wind is blowing, creators are really where it's at, and they need to stand out from the competition primarily in private label in this environment. And content, creator content that's entertaining and interesting is really one way. I think retailers with their private labels, they still haven't capitalized on influencers and the groups that follow the retailers and their private labels as much. So this is one way to get the brands to stand out in this increasingly competitive environment.

Sara Lebow:

Yeah, Poppi, I should note that we talked about before is a creator driven brand as well. Their founder, Allison Ellsworth used social media heavily to market that brand. So I think it shows how powerful creator driven brands can be right now. Not that Unilever will be creating creator driven brands, but it shows the influencer side of that, the content side of that. Number one, Wonder. Becky why Wonder?

Becky Schilling:

Yeah, so the food delivery company bought Tastemade this month. Tastemade makes and distributes social and streaming content about food and restaurants. They have more than 160 million followers. And this acquisition gives Wonder not only a content studio but also a significant ad revenue opportunity.

Sky Canaves:

My impression was like, wow, they're just have this bottomless well of money and are buying everything, trying to become a food and delivery super app. But all around the food space, I think I read that they got nearly a billion dollars in funding last year in two rounds and they bought Blue Apron and Grubhub. But I'm a little concerned about the purely regional focus right now in the Northeastern US, where I am in Texas. There's no Wonder presence really. So there's no way for me to test it out and see if it's worthwhile.

Becky Schilling:

But now you could watch some social and streaming content.

Sara Lebow:

Is Tastemade the one that the MTA ads are partnered with, where you see them making a weird little dumpling in those like multimedia MTA ads?

Becky Schilling:

I think so.

Sara Lebow:

I wonder if those will now become Wonder ads also.

Sky Canaves:

So now what's missing is a grocery partnership for those Tastemade recipes and to get you to get your food home too. Interestingly, Walmart and Tastemade have had a partnership where Walmart plus members get a free subscription to, or at least a free trial to Tastemade, which is interesting given Wonder's CEO Marc Lore has a long history with Walmart and their e-commerce business.

Becky Schilling:

Everything always comes back to Walmart.

Sky Canaves:

Yeah.

Sara Lebow:

Okay, so that means our list is number one, Wonder. Number two, Unilever. Number three, Ulta. Number four, Poppi. Number five, Louis Vuitton. Number six, CVS. Number seven, Bath & Body Works. And number eight, Reebok. We also included a nine and ten honorable mentions on this list. At nine, we have FreshDirect for partnering with Uber Eats on its grocery delivery. And at number ten we have Wayfair, for opening its second brick-and-mortar store in Atlanta.

Now it is time for our second half where Sky and Rachel get to tell us where we went wrong. Both of them will have a chance to move a brand up or down our rankings and to add a new company entirely. So Sky, why don't you go first and make a move?

Sky Canaves:

So I'm going to bring Wonder down a few spots, maybe to number four. So moving up Unilever and Ulta above them just because I think it's an interesting acquisition, but there's still a lot that's unproven with Wonder and its business model and whether it's going to be profitable. They say that their stores or food halls are profitable. Their original business concept was not that great, but I still have questions because it's a very crowded and competitive market in food delivery.

Sara Lebow:

Becky, you were the wonderer. How do you respond to this?

Becky Schilling:

So I would deny that move. And the reason why is not because I agree with you that they have a lot of challenges and headwinds in front of them and that it may not work. But for the interesting component alone, I think this is the most interesting mood that a retailer has made. We've acknowledged with Unilever how important social content is, and this gives Wonder that acquisition to be able to do that. We know what streaming does for people. We know what audience reach does for people. Ad revenue. I think when you take in all of those components together that it is holistically the most interesting move that anybody's made. Will it work? Will it help them succeed? It can't hurt. They have a lot of challenges ahead of them, but just on the interesting alone component, I would have to say that I'm going to keep them number one.

Sara Lebow:

Yeah, I'll keep them number one. I'm okay with that. Tastemade feels like such a... Almost like it's very of the 2010s, Tastemade's content. Any viral food recipe content mill feels very BuzzFeed, Tasty 2010s to me. So I'm really interested in what this new iteration looks like.

Rachel Wolff:

And I'm just interested in how Wonder plans to stitch all of these things together. I mean they have Grubhub, but how will Grubhub play into how the Wonder food halls develop and so on?

Sara Lebow:

And will people start consuming media on Grubhub or on Wonder's own app? Does Wonder have an app?

Rachel Wolff:

Probably.

Sky Canaves:

They do. And then I'm also wondering about the Blue Apron part. That's another brand of the 2010s, I think that's kind of past its heyday. And how do you get people to come back to meal kits or restart growth in that sector?

Sara Lebow:

Okay, so we are denying Sky's move at this time. Sorry, Sky. Congratulations, Wonder. Rachel, what is your move?

Rachel Wolff:

So I want to boot Bath & Body off of the list. We kind of touched on this before, but I think just adding a place for people to smell things is not really a reinvention of the store format. And I'm not sure that that will be the thing that Gen Zs will be like, this is why I go to Bath & Body Works.

Sara Lebow:

I'm okay with booting them off the list.

Rachel Wolff:

I mean, when you put it that way.

Sara Lebow:

Feel free to deny this, but I was never super sold on Bath & Body. The only reason they're above Reebok is because my argument was that golf is boring. So I'm okay with taking them off of the list. I know that we don't tend to judge things on whether or not things will work, but I don't think Bath & Body is going to successfully rebrand itself as a Gen Z brand by going sort of a Glossier route. Not that that's necessarily a Gen Z brand either. I'm okay with taking them down a notch.

Becky Schilling:

I'm all right with it.

Sara Lebow:

Okay, so we are taking Bath & Body off the list. Technically that moves FreshDirect onto the list, but if we accept any of your additions, then they'll move off again. So Rachel, what is your wild card that you're adding to the list and where are you putting it?

Rachel Wolff:

So I'm going to add another luxury brand to the mix, and that's Gucci, which made a kind of, I would say disappointment came out of left field, but they brought in Demna, who is currently the creative director of Balenciaga to revamp the brand. And investors weren't pleased about that. But in some ways I think that's what makes it so interesting, which is that a lot of luxury brands have really been playing it safe to try and win over wealthier shoppers and just avoid alienating people in general. But I think that this appointment shows that there's a real need to shake up the creative leadership of these brands and bring in new ideas. And this could be the breath of fresh air that Gucci needs to get back on its feet.

Sara Lebow:

Where do you want to put them?

Rachel Wolff:

So I would put them, I would say above Louis Vuitton because I think it's a more interesting move than launching beauty.

Sara Lebow:

I didn't know about this, but this is a weird choice. Demna famously collaborated with Kanye West, also was behind that Balenciaga ad campaign with children holding teddy bears and leather harnesses. That ended up becoming a whole conspiracy theory online. This is a sort of risky choice for Gucci, is it not?

Rachel Wolff:

It is, but he's also at Balenciaga kind of been a proven commercial quantity. I mean, he really almost kickstarted the trend of designer sneakers. He got people to pay attention to the brand, which at that point had been kind of languishing. And so I think for Gucci, this is really kind of what it needs. Even a dash of controversy really could be what helps it just get back into the cultural limelight.

Sara Lebow:

I'm okay with adding Gucci to the list.

Sky Canaves:

I think the big question mark is whether he's more of a known quantity, which I think is what the market reacted to thinking like, oh, we already know what he's capable of. This is who he is and it's not going to be interesting enough. Or whether he really has a viable second or third act in him that could really propel the brand forward and do something that's wholly new and creative. I think he is capable of that though. He's still pretty young.

Sara Lebow:

I'm okay adding Gucci to the list. Becky, what do you think?

Becky Schilling:

I'm okay with adding him. I would not put it above Louis Vuitton though.

Sara Lebow:

Okay. So we can put Gucci above CVS and Reebok, I think. Okay Sky, what is your wild card and where would you put it?

Sky Canaves:

So my new brand is actually in the marketplace space, a new launch. So a couple of years ago, the flower and fruit delivery brand, Edible Arrangements, maybe they're more flower-shaped fruit delivery or fruit bouquets. Anyways, Edible Arrangements, they rebranded as Edibles.com or Edibles. And at the time there were some jokes and speculation about the other kinds of edibles as well as some acknowledgement like that, oh yes, we could move in that direction. And now lo and behold, they've just announced that they are launching a marketplace for the other kind of edibles, not fruit, but THC and CBD type products, which is a really booming market in the US. We don't cover it as much because it, I think falls a little into the vice goods area, but it's a really interesting market. And there is this growing trend towards what I learned today is called Cali Sober, which is abstaining from alcohol but engaging with other substances of varying degrees of legality.

Sara Lebow:

Where do you want to put them on the list?

Sky Canaves:

I would put them pretty low on the list. Would that boot Reebok off?

Sara Lebow:

Yeah, but I'm okay with that because I think golf is boring.

Sky Canaves:

Can I swap them with CVS?

Sara Lebow:

Yeah. I'm definitely okay with that move. The reason Edibles didn't make our original list is because this move happened after we made our list. But the reason I'm okay with putting it on the list is because Becky and I already had a conversation about this this morning and about how interesting it is, and then it didn't occur to us to change our list.

Sky Canaves:

And there's also a potential advertising opportunity there that just crossed my mind because there are a lot of these companies, they don't have many places to advertise, and this new marketplace could be one.

Sara Lebow:

I think it shows something interesting about cannabis as a product. Also, Edible Arrangements is like a wholesome company. They're like a Mother's Day, get well soon company. And if they're getting into the cannabis market and specifically into e-commerce, which is kind of a complicated area legally as it relates to cannabis products, it shows just how mainstream these products are. And we're probably going to see other companies do similar things. So I'm definitely okay with booting CBS for Edibles.

Becky Schilling:

I'm good with that. I mean, our entire team was having a conversation about this move this morning and it was so debated on whether or not you actually liked getting fruit as a delivery or as a gift if that was a good gift or a not good gift. So expanding your product line into something that seems very fitted for your name, I think is a very interesting move.

Sara Lebow:

Okay, both of your wild cards made the list. Good work. So that leaves our final list with honorable mentions of FreshDirect and CVS, which got booted from the list. And then we've got number eight, Reebok. Number seven, Edibles or Edible Arrangements. Number six, Gucci. Number five, Louis Vuitton. Number four, Poppi. Number three, Ulta. Number two, Unilever. And number one, Wonder. That is all we have time for today. So thank you so much for being here with me. Thank you, Becky.

Becky Schilling:

Thanks for having me.

Sara Lebow:

Thank you, Rachel.

Rachel Wolff:

Thanks.

Sara Lebow:

And thank you, Sky.

Sky Canaves:

Thanks. This was fun.

Sara Lebow:

Please give us a rating and review wherever you listen to podcasts. Thank you to our listeners and to our team who edits the podcast and always ranks number one for us. We'll be back next Wednesday with another episode of Reimagining Retail and on Friday, join Marcus for another episode of The Behind the Numbers Show: an eMarketer podcast made possible by Trax.