Today was a fairly decent day (9/26/18) for retail and brick-and-mortar stocks as Wall Street is loving consumer spending. While it may seem that some malls are dying (and rightfully so), there seems to still be some love left for actually walking in and picking up a pair of shoes, or trying on some clothes.
Crafting retail experiences around shopping
It seems that retailers are now about creating brand experiences, and if you look at the retail winners and strong confidence buys today, you’ll see exactly that, brands with experiences. No longer just shoving products on shelves, brands and retailers are focused on carefully crafting the customer journey, and it shows with investments in things like beacon and bluetooth technology, and enhanced store layouts.
Looking around at stores, you start to see a more “Apple-esque” look and feel, including clean lines, matching employees in modern uniforms, and a focus on goods and branding.
It’s no surprise that Nike ($NKE) is focused on crafting a brand experience, because shoes and athletic wear for the most part has been commoditized, where you can get a pair of running shoes at Walmart ($WMT) for $19, versus the $100+ you pay at Nike. The Nike Flagship store at Caesars Palace plays host to product launches, demos, and takes on bright, bold colors. Everything has been designed towards an upscale shopping “experience” and it’s starting to reflect in company sales, and brand loyalty despite what some see as a marketing misstep.
Nike helps drive the retail sector up
Leading the sector today, quite a few companies ended up in the green. Canada Goose ($GOOS), Foot Locker ($FL) (this shouldn’t be a surprise as they also sell Nike gear), Deckers Outdoor ($DECK), Wolverine World Wide ($WWW), Rocky Brands ($RCKY), Urban Outfitters ($URBN), American Eagle Outfitters ($AEO), Duluth Holdings ($DLTH), Big 5 Sporting Goods ($BGFV), Under Armour ($UAA), and Ascena Retail Group ($ASNA).
Also, looking at REIT’s, there are some strong plays from those who actually manage the malls, and Tanger Factory Outlets ($SKT) are a great real estate play on retail, without having to worry too much about the quarterly cyclical business of retail. Quarterly dividends of $0.35, representing a payout of 6.6%. Not bad at all.