00:00How are you doing, and how's American retail doing? How's our aspiration?
00:04Doing well. American retail, frankly, pivoting along, but doing nicely.
00:08We saw some great results out of Victoria's Secret yesterday.
00:12At the same time, Lululemon is obviously falling a lot today, as they have work to do.
00:16And then you saw terrific results out of Abercrombie and Fitch.
00:20You have companies like Oxford Industries, who are still working to improve Lululemon.
00:24So for the most part, companies are managing inventory, they're using marketing and social marketing to drive new customer growth.
00:32And you have companies like Tapestry and Ralph Lauren that are continuing to see more new customer growth and AUR
00:39increases.
00:39I've got to give you a victory lap.
00:41The Australian Financial Review magazine wrote an article on the new Hermes store in London, which is a Dana Telsey
00:49story.
00:49Let's bring it up here right now.
00:51First of all, Hermes is struggling now.
00:52Now, the stock down, it used to be it cost five Hermes scarves, and now the price of a share
00:57is three Hermes scarves.
00:58But this is Florian Crane writing up here.
01:02In 2011, our point was saying, if people go to a store, that will be for a reason.
01:08It's not to get the product.
01:10The product will be available on a click.
01:12He took that from you.
01:13He stole that concept.
01:15You're the one I know who said, stop panicking.
01:18Stores won't die.
01:19Exactly, and they're not dying.
01:21If anything, stores are more relevant than ever before.
01:24You're seeing companies reinvest.
01:26Look at companies like Aritzia, the beautiful stores they have here in New York.
01:30Look at, frankly, look what Bloomingdale's has done.
01:32And it's like a reinvention of what Bloomingdale's used to look like.
01:36Social interaction happens in stores.
01:39And post-COVID, people want that more than ever.
01:41The reinvention, though, often pivots to focusing on a premium customer who wants a premium experience
01:47because that premium customer, their spending is more resilient, and that's where the growth is, frankly.
01:52Does that mean that the selection, the opportunities, the options for the higher-income consumer just grows
01:57and the options for the lower-income consumer just shrivels?
02:01Well, a couple things.
02:02I mean, I think you're seeing options for even lower-income consumers in physical retail expand.
02:07Look what just opened here in May.
02:09We had the first Primark in New York City open, and that is a value retailer.
02:14The fastest-growing number of store openings is coming out of the off-price retailers.
02:19Ross Stores, TJX, Burlington.
02:21You look at Walmart remodeling nearly 600 stores a year.
02:25So I think the pivot point is every type of retailer is figuring out new ways to capture more traffic.
02:32I want to ask you, please, Scarlett.
02:33No, I want to ask about Shein and fast fashion because there's a legitimate question here about whether fast fashion
02:38is dead.
02:39Shein went public, but it definitely did not time it right because it should have been a couple of years
02:43ago when the growth was at its peak.
02:46Well, also, I think you have competition.
02:48You look what Zara and Zara's done so well.
02:51H&M is trying to get its groove back.
02:53And there are privately held companies like Addicted, E-D-I-K-T-E-D.
02:57How do you keep track of this?
02:58That's opening stores.
02:59They have one here in the old Scrivener's Bookstore on Fifth Avenue near Sachs on 49th Street that just opened.
03:04Right.
03:05We're seeing a ton of traffic.
03:06Within personal finance, retirement, and particularly wealth management, what spans that is this crazy thing, aspiration.
03:16I want to own, as we mentioned earlier, the MS scarf.
03:19I'll never own one, but boy, they're beautiful.
03:21I think I'll look at it.
03:23Or people that say, I'm never going to own one at all, but I'm fascinated.
03:26Is our aspiration now the same as it was 10 years ago or 30 years ago?
03:32I think there will always be aspiration, but what you aspire is something different.
03:36Today, you just had the points guy on.
03:38What are people doing?
03:39Look at the prices at the U.S. Open.
03:42They are very high.
03:43So people are basically paying up for experiences because experiences create memories.
03:49And it could be memories with purchases.
03:51It could be memories with doing.
03:53And I think there's a lot of interest in doing these days.
03:56Which specialty retailers are doing a good job delivering on that experience, providing that experience to the customer?
04:02I think there are a couple that are doing some interesting things.
04:04Frankly, you look at Ralph Lauren and, frankly, Ralph's Coffee, you have lines there.
04:09They're creating that experience that's exciting.
04:11Frankly, you look at Zara, which has something new all the time.
04:14It creates a destination.
04:17Sephora, there are crowds to get in the Sephora stores.
04:20So it blends product and experience at the same time.
04:23A joke at the house is the daily Sephora.
04:26What they do is they bring the price down and go every day.
04:29And I see it on the Visa run.
04:31Okay, let's go to the Open because you and I are fans.
04:33We're getting Scarlett into this as well.
04:35The dream is to get Alex Ayala to play Coco.
04:39And there you've got Nike playing New Balance.
04:42And who in God's name knows what jewelry they're wearing.
04:45Talk about the aspirational luxury of most of the women, to be honest, draped at the U.S. Open.
04:53The money's, it's millions, right?
04:55It is millions, but also, you're creating style trends.
04:58Look what Sabalenka's wearing.
05:00Everyone looks every day.
05:02What is Osaka wearing every day when she walks in the match?
05:05It's something new and different.
05:06So yes, it's become fashion and function at the same time.
05:10Is Arnold winning at that?
05:12I think he plays a big game in it.
05:14He wins.
05:14Ralph Lauren wins at it.
05:16We have a lot of, frankly, Nike also wins at that too.
05:19So when Tom said you were out front in saying that stores are not dead, it's not just stores anymore.
05:23It's the venue for people to see, you know, the products available.
05:27But it's also at events like the U.S. Open.
05:29Exactly.
05:30It is at events.
05:31And frankly, you look at what stores are doing these days, whether they're creating styling sessions and bring your friend,
05:37whether they're introducing you to a new designer, there's a reason to go.
05:41And frankly, every time you have a reason to go, it's a click, click because you're buying one thing.
05:46But, oh, I didn't know I needed that.
05:48I'll buy that too.
05:49Your heart and soul is Bergdorf.
05:51Yes.
05:52How does Bergdorf survive?
05:54Service.
05:54Of the world, London, Bergdorf, Printemps, and Paris, how do they survive?
05:59Service.
06:00The service that they have is differentiated than others.
06:02They build relationships with their customers.
06:05They know their closets.
06:06And they can talk to them first, talk to them fast, and get them to the store.
06:10What you just heard there, folks, is classic Dana Telsey back to Bear Stearns.
06:15Scarlett, they know their closets.
06:18They know their closets.
06:19They know their customers, too.
06:20I'm curious as to these frictionless payment systems that have been introduced and rolled out, Apple Pay, Google Pay, all
06:26of that.
06:27How do you see that changing consumer spending habits, the way we spend?
06:31What are retailers doing to adapt to these new payment methods?
06:34And do we actually spend more because it's frictionless?
06:37Some of that.
06:38But the other thing it gives retailers, data.
06:40It gives them data on what the customer is buying, when they're buying, where they're buying, so they can know
06:46more about their customer that they can curate the assortments.
06:48Frictionless payments is becoming standard right now.
06:52Look at how we all, whether you take a train, whether you, when you pay for something, it's just tap
06:57and go.
06:58And that's become, frankly, normal cost of, normal cost of business.
07:02Joseph Feldman emails in.
07:04He says, ask a Joe Feldman question.
07:07Joe's wonderful.
07:08He works with Dana on the big box.
07:10Why is Walmart trading at 40 times earnings?
07:13I still don't get it.
07:14Well, why Walmart trades that way is because, look at the growth opportunities.
07:17Walmart's become a modern technology company, too.
07:20Look at their ability to capture all income levels.
07:23And, frankly, you look at what they have, a global space, in order to be able to be more fair.
07:29And the other thing in terms of Bloomberg money and personal finance, how many millionaires has Bentonville made?
07:35A lot of millionaires.
07:36And Bentonville's a nice place to live.
07:39How's Walmart doing with capturing the premium customer as well as holding on to its core customer?
07:45Look at the biggest growth for Walmart is coming from higher income consumers.
07:48And that ability for them to see relevance there is exciting.
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