3 Renegade Retail Stocks Reinventing Shopping Experiences
Some innovative retail stocks are on the horizon for investors looking to tap into the retail sector more closely. These companies are poised for potential growth. A few stand out for their unique approaches and forward-thinking strategies.
I’m bullish on these innovative retail stocks despite the prominence of e-commerce in our daily lives. We’ve seen that no matter how advanced computers and online shopping gets, nothing can replace the experience of visiting a physical storefront, feeling the products and interacting with knowledgeable staff. This human element, combined with the sensory experience of in-store shopping, remains a significant draw for many consumers.
Some companies are leaning into this social and sensory experience to create enduring competitive advantages for themselves. Here are some companies to consider that are doing just that.
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Target (TGT)
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Target (NYSE:TGT) has enhanced the retail experience by skillfully blending traditional shopping with modern technology.
Inside Target stores, it’s not unusual to see digital kiosks, interactive displays and mobile payment options available to consumers. Then there’s also the Drive Up service, which allows busy customers to purchase via the Target app and bring their items to their car.
Looking ahead, TGT stock is committed to making the in-store experience stronger for its customers. The company is exploring this through remodeling and opening new stores. This includes opening approximately 20 new stores in 2023 and remodeling around 175 existing stores.
Wall Street appears bullish on TGT’s initiatives, as it has a rating of “Buy,” which also comes with a 9% implied upside for its stock price.
Best Buy (BBY)
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Best Buy (NYSE:BBY) has reinvented itself by focusing on customer service and integrating technology into its physical stores.
BBY is committed to expanding its retail experience. It’s approaching this through expanding into new product categories. This includes significant growth in fitness and wellness products and some items that have exploded in popularity y in recent years, like e-bikes and scooters.
Aside from this category expansion, BBY is also furthering its omni-channel marketing strategy, allowing customers to interact with the brand through various forms of media. For example, customers can currently interact with experts remotely and plan to double virtual sales interactions by FY2025.
Trading at just 12.52 times earnings, BBY is one of those innovative retail stocks for investors to consider.
Etsy (ETSY)
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Etsy (NASDAQ:ETSY) stands out in retail for its focus on unique, handcrafted goods. It started as a small platform for individual creators to sell their products but has since exploded internationally.
ETSY is rolling out new features to its online platform that I feel will give it a significant competitive advantage over some of its rivals, including Amazon (NASDAQ:AMZN). Namely, the brand has introduced “Gift Mode,” an AI-powered feature that generates tailored gift ideas based on specific preferences. It uses generative AI to power its product recommendations.
Another feature it’s pioneering is through its “vital few” initiatives. Simply put, the company emphasizes quality, value and reliability in its offerings. This starkly contrasts most e-commerce companies that allow almost any product to be listed on their platforms.
With these growth drivers in play, ETSY is poised to see a huge surge in its EPS over the next few years, growing from 2.74 in FY2024 to 6.08 near the end of FY2026.
The company is then one of those innovative retail stocks that Wall Street loves and one that investors of all time horizons and risk tolerances should consider adding to their portfolio.
On the date of publication, Matthew Farley did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Matthew started writing coverage of the financial markets during the crypto boom of 2017 and was also a team member of several fintech startups. He then started writing about Australian and U.S. equities for various publications. His work has appeared in MarketBeat, FXStreet, Cryptoslate, Seeking Alpha, and the New Scientist magazine, among others.
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