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It’s about retailers making customers feel comfortable during the pandemic: Analyst

Charcy Evers, Retail Trends Analyst joins the Yahoo Finance Live panel to discuss the upcoming retail earnings.

Video Transcript

ZACK GUZMAN: Joining us to chat [INAUDIBLE] is retail trend analyst Charcy Evers. And Charcy, we appreciate you taking the time to chat here. Obviously, a lot of companies here are dealing with the slowdown in retail. But talking about what you're watching across the board as the key winners here in all of this.

CHARCY EVERS: Well obviously, you know, it's no surprise that the big box stores will be big winners. Because they are essential retailers. And you know, it's really important to note in addition to that that they were really, Walmart especially and Target, did put a lot into place pre-pandemic that have enabled them to remain really agile, and to answer to the overwhelming demand that they have.

So it wasn't, you know, anyone that had to react to get online, and to prepare themselves for the pandemic after the fact was going to suffer. So in addition to that, obviously everyone is shopping there, and having their needs met there. But it will be interesting to see how Kohl's plays out, I think as well.

You know I've always been really positive on them. I think the biggest asset a company can have right now is a strong CEO that's willing to take risks, that is willing to pivot, even though it's an overused word. And you know, you've really seen that from her. And I think that, you know, this quarter we'll see Kohl's reaping the benefits.

AKIKO FUJITA: And Charcy, we are of course, are coming up on one of the busiest shopping seasons of the year. Certainly, you point to this shift that we've seen over this period of the pandemic. You look at a name like even Lowe's, or Home Depot, you know they have sort of marketed themselves as expanding on their offerings during the holidays, too.

What do you think is going to be the most significant shift that maybe we're going to see from consumers in the way they shop during the holiday season? And what specifically they're going to be looking for?

CHARCY EVERS: Well, I think that Lowe's and Home Depot have shifted in their assortment, especially. Because you know, we really want, for several reasons, safety being the primary one, to keep our shopping to a minimum, right? And a one-stop shop is where Target and Walmart have certainly pulled market share from any of the other retailers like TJX, and so on.

So I think that having that ability to have curbside, to make it ease of convenience for safety purposes, as well as timing purposes, is going to be key. And you know, the consumer now is buying goods. We're not into experiences.

We're not-- so we have dollars to spend on that. And I think that we're going to see an uptick, for sure. And but-- you know, with really meaningful impact, and meaningful purchases. It's not just this frivolous kind of pack the stocking full of gifts for my child.

But maybe, you know, what are some family-centric games we can play? Or what is something that's long lasting that I can invest in? Really kind of thinking things out. Because again, you know, our values have significantly shifted since the pandemic.

ZACK GUZMAN: Yeah, one of those would be apparel, too. We've seen a lot of those stories leveraged to apparel just get completely smacked here because no one needs clothes, if you're just working from home. Talk to me about that, and how some of those retailers are going to feeling that pinch.

CHARCY EVERS: Well you know, department stores primarily are based-- their assortment is apparel, right? And if you look at a Macy's, for example, their apparel is a little bit higher end, I would say. It's definitely not athleisure focused, or active wear focused as, say, a Kohl's has always been.

So they are benefiting from that. In fact, Kohl's has launched a new athleisure line in response to the pandemic. This FLX line that I think they'll do well with. So it's really-- unfortunately for department stores, where they have all their eggs in a basket in some places that, you know, can't be anymore. They're mall-based, and they're also heavily apparel.

AKIKO FUJITA: I think it's interesting when you said earlier, which is that people still want goods. But they don't necessarily want experiences. And you know, if you go back a year ago, we were talking about this omnichannel experience that consumers are going to be looking for. There's no question that has been our most significant shifts, just getting everything online.

This acceleration that we've seen over the last six months. Who do you think is best positioned to take advantage of that going into the next year? Because it seems like that trend is really here to stay.

CHARCY EVERS: Oh, absolutely. And I think, again, the retailers that really positioned themselves well, the Walmart, Target-- you know, two years ago I was-- I was bullish on Target when everyone was down, because they were spending so much money getting their online presence ramped up. Building their smaller format stores, and you see, again, they're reaping the benefits from making that investment and thinking long-term.

Walmart obviously also. A lot of retailers though see the benefit in curbside, which I've been talking about for a while, too. Even Macy's is going to have curbside pickup. Contactless shopping and payment options, additional sales associates in the stores, so that you can get in and out quickly.

It's really about making the customer feel comfortable shopping. And I think that that's really the key to the success of these retailers, especially when you're talking about a Walmart. I mean, they're even now taking pets into consideration, with pet insurance, and doing a whole thing with Rover. So it's really-- the customer has to come first, especially when we're feeling so vulnerable. And things are so uncertain that the retailers that are really going to answer to that are going to make a difference.

ZACK GUZMAN: I mean, on the flip side, if that's here to stay, there are questions-- and we've been looking into it, about foot traffic at malls, and just how I guess scared Americans are. Regardless of lockdown, just if cases continue to rise. Not a lot want to go to malls.

I assume that would negatively impact your Macy's, your Nordstroms. And obviously these big box retailers we're talking about, Walmart and Target. Bring the people, regardless of where they are, just talk about that element, too, as maybe this pandemic lasts a little bit longer till 2021.

CHARCY EVERS: Well I think that our mindset has fundamentally shifted. Right? How-- you know, transportation and travel after 9/11, those little things are still in the back of our minds when you're traveling, right? Those initial adjustments that we had to make.

And I think the pandemic is going to have a lasting effect in that regard. We're going to be concerned about large crowds, about going over capacity, about being in a healthy environment. And that doesn't bode well for malls in general, obviously.

Because they are enclosed. I think the retailers that will do well, again, like a Kohl's who is in a strip mall based, generally, for the most part, will do well. Because you know, they're not-- they're not enclosed in a small mall area.

ZACK GUZMAN: I think that's a good point. I think that's why we saw the Simon Property Group deal go down by about 20% in that negotiation. That Tiffany's deal with LVMH only dropped by about 3%. So there's a big difference there.

CHARCY EVERS: Right. And there's also-- no, I was going to say there's also-- there's Amazon that's looking for, you know, a footprint. A retail footprint or a distribution footprint. So I think that, you know, that's a big focus right now, too, on malls. And that's what, you know, they may turn into.