Ethan Chernofsky shares insights on how data and AI are transforming retail strategies, organizational structures, and the future of malls, marketing, and retail innovation.
Key topics
Takeaways
Chapters
00:00 Introduction to Ethan Chernofsky and retail AI
03:25 How data changed perspectives on retail and real estate
05:20 Pattern recognition and the essence of intelligence
06:20 Balancing qualitative and quantitative data
08:29 The impact of AI on narratives and decision-making
09:44 The art and science balance in retail and AI
11:08 Using AI to save time and enhance creativity
12:18 Pacing the adoption of AI in organizations
14:09 Build versus buy in AI technology
16:32 The future equilibrium of AI tools and platforms
18:57 Human elements in retail amidst AI advancements
21:02 Real-world examples of AI success in retail
22:25 Overused retail metrics and their pitfalls
23:16 The renaissance and reinvention of malls
24:09 Cross shopping as a key psychographic indicator
25:03 Innovative uses of auto centers in malls
27:57 Dress room technology and consumer resistance
29:53 Walmart's data-driven success and pivots
34:55 Leadership, talent, and organizational health in retail
37:33 The impact of brand aggregators and retail consolidation
Philip Moore (00:00)
Welcome to Retaili$tic with Deborah Weinswig, brought to you by Coresight Research. In this episode, Ethan Chernofsky brings his experience from Placer.ai, SimilarWeb, and Headline Media to the discussion of AI's impact on retail strategy. Deborah and Ethan cover a broad range of topics, including the resurgence of American malls, the decline of Nike and Lululemon, and the future for Target.
Deborah Weinswig (00:25)
Hello
Ethan. Thank you so much for joining Retali$tic today. We're excited to have you.
Ethan Chernofsky (00:29)
I'm so excited to be here. Thanks for having me.
Deborah Weinswig (00:31)
So Ethan, let's take a major step back. When you and I in the let's say early days of data impacting decisions, you were really at the forefront of not only being able to tell the story, but being able to think about how organizations should think about their processes and their structures around data. Can you help us
get inside your head on on how you look at data driving decisions and organizational structures and what have you seen in terms of companies who've, if you will, organize as you think they should.
Ethan Chernofsky (01:08)
I mean, yeah, I I think the starting point is at at some point you recognize that data for the sake of data is not all that exciting or interesting. And if you just leave it within this world of my god, I have this cool perspective on things, it's not going to accomplish very much. And we were very focused and when I joined Placer from the very beginning
We are going to try and go from data point to conclusion. And at the time it was a riskier take because, I with all due respect to myself, it's like, who the hell are you? And there
Deborah Weinswig (01:41)
Yeah.
Ethan Chernofsky (01:41)
are so many people who are far smarter and far more knowledgeable and experienced. But we recognize, and I think correctly, that if you just leave things like, look at this cool thing.
you know, you have a thought on it. It wasn't gonna go anywhere. And if we were able to say, we saw this data point, that indicates to us that this thing might be happening, then you'll look at that and you can see the journey. And you might disagree with the conclusion completely, but you'll understand how you would do things differently. So I think that was a really important part of our agenda. And I would say that it comes from a love of data. Like there's something
You know, I think about my academic career, I worked at SimilarWeb before Placer, and then obviously the time at Placer. Understanding how people interact with the world and then what that means for a specific entity is endlessly fascinating.
And I think even more like the relationship imagine the relationship that you and I developed. So often our conversations would go totally off the rails and just start k you know, talking about some weird thing that we saw and what that could potentially mean and who might benefit and who might not. And so you get the opportunity to then meet these other industry experts with intense expertise and experience. And
you find that these are the most exciting conversations to have. And if you can frame it in a way and make it accessible for other businesses, then you see that eureka moment happen.
Deborah Weinswig (03:03)
And
if if we if we go back to kind of the earlier days of Placer Wright you were focused more on retail and that certainly kind got arms and legs into QSR and hospitality and just kind of like where's the consumer? As you ended up having, you more and more and more data points, how did your view of things change and what surprised you the most?
Ethan Chernofsky (03:25)
the interesting thing was we we had some amazing investors, and they were very helpful in the early stages of enabling us to see where this could be applied and how it can make an impact. And one of the biggest examples of that was the commercial real estate space, so retail real estate.
Who's coming to a shopping center? What shopping center should I acquire? What's got value upside potential that I might have missed? And that was a big unlock to see through the lens of these professionals how they were viewing the world through the lens of our data. What ended up happening was, and this was especially exciting on the marketing side, and I think it's one of the things that gets missed in marketing more broadly, is that every part of an organization has a unique bias.
That makes them smarter than everyone else, but also limits their viewpoint. So if I'm in customer success, I know the customer so deeply, but maybe too deeply that I don't see other things that are happening. If I'm in sales, I know the prospect in an incredibly powerful way. If I'm in product, I see how people are using the product and what they're doing in an incredibly powerful way. Marketing's biggest advantage is that we touch the market.
We are seeing, we put things out there and we see who interacts. I'll give you the best example. we put out content at points where the product wasn't built to deliver that type of ending data point. But we saw people coming and saying, I want this.
And they were not people we expected, it wasn't segments that we expected to be operating in. So a great example is the consumer goods space. Like these big CPG brands was not, I mean, the first time we met them, we're like, we don't have anything for you. And you have this amazing moment where they're like, kind of, shh, you do. We'll tell you what it is. And all of a sudden they become some of your most successful customers. And so it's this incredible opportunity, and I think a uniquely powerful opportunity in the data space where every period of time that goes by.
you find new applications and I think in the AI world and certainly the AI world that Placer's chasing, that's going to be, you know, 10X in terms of the the expansion potential.
Deborah Weinswig (05:20)
That's
really interesting. You know, I think Brian Green, who's professor at Columbia and Jeffrey Hawkins both said kind of, you know, something around the idea I'll kind of distill right, pattern recognition is like the essence of intelligence, going back to what you said earlier around AI, right? That's what AI does a really great job of. And I feel I felt you as a kindred soul and kind of like pattern recognition. And and because of that,
How do you ingest data differently and how do you think about And how do you think that either in your personal or professional life, how has that impacted how you approach things?
Ethan Chernofsky (05:56)
I think one, I I love I love data, right? I think it's really fun to interact with and engage with. And I think if you are the type of person who loves it, you're going to play with it and tweak it, and that will increase the likelihood that you'll find these connections. I think the second piece is I'm very aware that data is not everything. That it is not the whole picture, that it is not showing me everything that's happening, and certainly no data set on its own is.
And so it's always a combination of things you're hearing and seeing, what the data says, and then you end up coming up with these longer threads of conviction that go from data point plus a behavior plus something you've seen in your own life, and then you stress test it. Like the I mean we look we have the joy of bumping into each other at conferences all the time.
Those conferences for me were always a big part about pushing placer, but also the chance to engage with really smart people and hear what they're thinking. And all of a sudden you would end up with, I saw this data point, this person's talking about this trend that they're seeing, and you start connecting dots. And that's the figuring out that these patterns are existing. And the cool thing is.
you will end up at periods of time where the data starts contradicting your hypothesis. Or you have this other, you know, short-term trend that contradicts the hypothesis. And you have to constantly balance between, am I gonna double down on what my theory is and what I think? Am I going to realize that maybe I was wrong in this place? And you have this, you end up again almost eight years a placefair with so many theories that were proven right that you feel amazing about. And so many times you were like, I really thought this thing was gonna happen
And it didn't. But if you're, I think if you're clear about showing the work, like what was the process? I thought this was happening and then this was happening and then therefore this was my conclusion, then someone can take it apart and be like, okay, I see how you messed up that variable, but it doesn't contradict the the flow and it still allows them to see how they would utilize information to come to a similar conclusion.
Deborah Weinswig (07:50)
Well, and I think what's very interesting in the example you just gave is not only tracking and tracing where your data is coming from, but how are you distilling it down and then what other data sets are you putting together? Because we can all look at similar data and come up with wildly different conclusions, but some of it is how we're we're digesting it
some
of it's how we analyze it and some of it goes back to like what are the patterns that we're kind of looking for reassurance And so as you think about what's around the corner and with everything that's happening in in Gen AI and Agentic, et cetera, how do you think data starts to change narratives?
Ethan Chernofsky (08:29)
I think t we all feel very comfortable with the objectivity of data. And I think we probably it's it's we overdo it. Like data is not objective, it's it's how it's viewed. And I think the the real and you you know, you do this in your academic background, but it's the combination of the qualitative and the quantitative.
Deborah Weinswig (08:48)
Mm-hmm.
Ethan Chernofsky (08:48)
And
you know, from the greatest minds, I don't know the remember the exact Jeff Bezos quotes, but it's like if the anecdote contradicts the data, trust the anecdote. And it's I think that the the world we're entering in is one where we figure out
our unique mix of qualitative and quantitative. Like what do we think the data is showing? Not because that is the endpoint conclusion or the guarantee of what the future should look like, but that's just what people have been doing. And if you apply this other perspective, you can see a fundamental change in behavior. And I'll steal this concept from a from a former colleague who said this. The world shifted there's always a balance of art and science.
And I think with the rise of data and the availability, we shifted aggressively towards the science. And I think what AI does is it lowers the barrier of access to the science in such a way that we can actually start emphasizing the art again. And I think that that's going to be a huge unlock for exactly the reasons you said. We can
Deborah Weinswig (09:44)
Mm-hmm.
Ethan Chernofsky (09:44)
look at the same data set and come to wildly different conclusions. We can combine things in a different way and come up with creative approaches. And so
I really view AI in a weird way as something that going to reignite human capacity and like the individual creativity and unique human elements that we bring to the table because it's so good at doing the things that are more computational.
Deborah Weinswig (10:08)
I think if you can I mean I it was funny, I had a very late night call with somebody last night. speaking at a board meeting for them in October, and because I was an organization, they're really trying to figure out kind of what their next steps are, and I said, you know, go and ask your leadership team, what do they dislike the most? And if it was removed, how much like not only headspace would it free up, but like how much kind of time in their calendar? And so
They
they started to do that. I already got some feedback this morning. They're like, It's unbelievable. Even just asking people the question that you like that you pretend you care or whatever. person was like, It's it's unbelievable to see kind of just how people are already kind of thinking differently. So
I'm really good at understanding kind of like what do I love, what do I like like and what do I really dislike. And so what I've tried to do is take all those things I really dislike and see if I can build an agent or, you know, use something off the shelf is even even better. And so I think that if you can utilize AI to save you time, hassle, decision fatigue, right? It's like the triple win.
Ethan Chernofsky (11:08)
I mean, I think there's there's three ways to view it. At least we I we as an in an organ marketing organization viewed it three ways. There's AI that's gonna create efficiency, right? So there's things that are going to cut my costs, help me spend less time, do things, just the plumbing better. There's AI that's going to drive, let's call it, efficiency, but from a growth perspective. So it's how do I improve conversions, how do I monitor and and see things more clearly, how do I bring myself greater degrees of visibility?
And the last bit is there is the the time it takes to go from idea to proof of concept has been shrunk in a shocking way. And if you know every organization that I'm speaking to, you say, like, what is what is a marketing team of the future look like? Every team needs a quasi-product person because marketing is going to become
You don't need to wait for the data team. You don't need to wait for the product team. You don't need our resources from RD. You can do things on your own to kind of poke at growth levers. And I think that is a a liberating thing when you realize that all these creative ideas that you had in the past, they were like, well, I can't do it because this person's never going to approve and this person's overwhelmed. I don't need to wait for those people anymore. And that is an unlock of massive proportions.
Deborah Weinswig (12:18)
You know, it's funny, I was it was at s ICSC this year and I spoke on a panel and then we got like our panel photo. It had all these like logos in the background. I'm like, Well that's no good. So uploaded into ChatGPT and I was just like, Is there a way you can help me like remove logos or whatever? I mean, I got the thing rendered like thirty seconds. I'm like, Okay, what just happened and like when did this happen, right? 'Cause it's like you had asked it like two weeks ago and it couldn't do this.
Or you're using Mid Journey or whatever it was at the time. And so what I'm finding is, I mean, think about it, like I I in the past would have sent like those photos to our graphic designer who would like cleaned them up and then I would post them much later, that would like lose the thread, et cetera, et cetera. And to be able to do it not only myself so I'm not like burdening another resource, but then to have it kind of like literally like right there and then, I mean it's it's like invaluable.
Ethan Chernofsky (13:05)
Yeah, I I agree. I I think we're only scratching the surface. And at the same time, like I look at there are companies that I think when the AI wave kind of began in earnest, I think there were companies you would have pointed to as, I don't know if they're gonna survive this. And the interesting thing has been, few years later, looking at some of the ones that I would have absolutely bet against, watching them crushing it from a revenue perspective, from a growth perspective. Maybe the market doesn't view them the same way, but
their their actual numbers are in amazing shape. And you realize that like it's it's not an either or. This isn't like AI is coming, everything is going to to kind of get crushed. It's where are the real pain points, where are the things, where are the products that have really embedded themselves in workflows where you're like, it's just not worth changing. And I think it's our my opinions on this at least are changing on a let
Deborah Weinswig (13:55)
Yeah.
Ethan Chernofsky (13:56)
I'd say every six months
My perspective is very different than it was six months prior.
Deborah Weinswig (14:00)
So let me ask you on because I feel like we've seen the biggest shift in this topic, build versus buy.
So where where have your thoughts been and and where are they?
Ethan Chernofsky (14:09)
I I think weirdly I thought it was gonna be more build and less buy. And now again I still think there's gonna be a lot of things that are replaced. We we did it internally, we were able to find tools that were just no longer necessary and we could reduce costs. But when we tried to remove certain products, again products that I was expecting this to be easy, the pushback internally from team members, the changes to their flows, the recognition of how deep some of these products have managed to work within our team.
was really impressive. And I think the idea of how do you upkeep something custom versus how do you upkeep some the having s knowing that someone else is gonna upkeep it for you, how do you continue innovating and building the extras versus the company that's gonna do that for you. I I I think a lot of products are going to go away, but I think that the build versus buy debate is the buy side is a lot stronger than I expected.
Deborah Weinswig (14:58)
Yep. I would I would say that we had expected at least to see the build over fifty.
But because everyone's, I would say, a bit more concerned about job security, there end up being this thread around, right, if I build something and it doesn't work, then the finger is just pointing in one direction. If we're working with the team or we're outsourcing or whatnot, I can always just blame them. And so that's been a that's been a really interesting approach.
but one that we've seen kind of take on life of its own pretty broadly.
Ethan Chernofsky (15:31)
Yeah, I I'm in total agreement with that statement. And I I I'd even add to it that I think there is a recognition of don't know, I was looking at data not all that long ago about where the most consumption is via AI tools in terms of the major the major models. And I think i this at least in the technology ecosystem, Claude is clearly the
Deborah Weinswig (15:50)
Mm.
Ethan Chernofsky (15:50)
the
most advanced of tools, yet it has the most limited amount of usage. And to me that still indicates that the bulk of AI, actual AI usage on a day-to-day basis, is search two point which is an amazing breakthrough. It a crazy phenomenon. But still
Not everyone are building products for themselves. People are not doing the most advanced things, and especially on the B2B side. So I think we have a very long way to go. I think the potential is there. But I st I think we're always going to end up in, always is is too strong of a word, but I think the likeliest scenario that we is that we end up in some sort of similar equilibrium where there are things you do on your own and there are platforms that allow you to do certain things for yourself. And then there are things that why why waste the energy when someone else has nailed it so well?
Deborah Weinswig (16:32)
Yeah. I mean it's it's funny you say that because we had a call two days ago with retailer and they were looking at expanding into Canada and this and the other and they're like, you know, let's take like a major step back and think about where what can we do to monetize? And I said, Well are there products that you've built that are specific to you that we could s help you sell to other retailers? And they're like, Absolutely. So it's been this idea of like retail as a service. I mean
That's been fascinating because so many of these retailers are are thinking about not heading in that direction and I think that that could be critical mistake. I don't know what your thoughts are.
Ethan Chernofsky (17:06)
Yeah, I mean I agree with you. I I think the interesting things, if I think about the biggest mistake that I think this these cycles went through is if you if you go if we like go back in time like a year or two, the conversation around marketing was like, marketing is dead. Right? It's just gonna be it's so easy to create content, it's so easy to do this, it's so and the answer is yes, you're totally correct. It's easier than ever before. But
We've seen this. We saw programmatic advertising hit and we saw the cycle before where whenever the bar is lowered for the creation of content or the creation of ads or the distribution of ads, it creates a flow of vanilla nonsense.
And vanilla is never going to carry the day. And I I was having a conversation not all that long ago where I said, I think weirdly you could make the argument that advertising and marketing are gonna look more like 1950 from a strategic perspective than 2005. And that's because having a real voice, having a real perspective, knowing who the audience is that you're trying to reach, these kind of basic fundamentals that you could almost overlook.
In the last 20 years, you have to go back to them more than ever because you're f there's too much. Like you think about you know, data overload or all that. Just information overload now is insane. And so you're looking to hear authentic voices that you can trust, that you can rely on, that you actually like and want to engage with. And so
These old school marketing mentalities are gonna become more important. And I think you're gonna see that in in other places too. Like the in-store experience is going to be I think one of the key elements of who wins and loses in retail. And yes, AI will help you parse data more effectively, but having good staff, that's not an AI thing. That's just a old school retail fundamentals. And I think the very often these technology cycles remind us that the
truly
human elements, not only are they not less important than they were before, they only become increasingly important as we have access to these incredible technologies.
Deborah Weinswig (19:06)
Hmm. It's an interesting I mean if I dig into that a bit more, I I couldn't agree with you more more than I already have on the the marketing kind of conversation because it was like, and I know I have to say, my gosh, I was at Quincanera, I was at the work table, and
The guy sitting next to me looked like he had just like lost his best friend. And I was just like, you know, are you okay? This and the other. And he he said, I they just laid off a third of my team without consulting me. And it turned out it was our client. And
Ethan Chernofsky (19:34)
Well.
Deborah Weinswig (19:34)
so they'd been so excited about right saving money with, you know, LLMs, et cetera, that when they didn't see it moving quickly enough, right, like leadership just moved it. And he was like destitute and he was like, you know, he was.
very involved in a marketing organization and he's like I don't even know how to get them to understand this or if I just have to kind of like go somewhere else and like think about it differently. So I mean I think marketing has been the biggest surprise for everybody.
Ethan Chernofsky (20:01)
I it's also pacing. Like one of the I I give, you know, obviously I love my time at Placer. I think it's an incredible organization. I give that team a lot of credit for even though there was like almost a religious conviction in the power of AI and what it was going to do, the willingness to let certain things take time. Allow
Deborah Weinswig (20:20)
Mm.
Ethan Chernofsky (20:20)
people to figure out what it means for them. And I
Obviously, if you're a business that needs to make cuts immediately because otherwise it's gonna go into a bad direction, do what you need to do. But just because something is huge and is going to have a massive impact doesn't need to mean it needs to have a massive impact tomorrow. And sometimes rushing that and moving too quickly does damage that you then need to take three steps back to reverse. Breathe, let people think through their ideas, let people find their options. I I we as a marketing organization.
In the beginning, in like the first year, like, yeah, okay, it we researched faster, we're able to, you know, edit our work quicker. There was a lot of things it did that were really great. Were they game changing? No. But about a year ago, we started having some big game changing wins.
And yeah, it allowed us, we had a person who left and we didn't need a backfill. We had a person who wanted to switch roles and we're like, okay, we can figure out how to do this without needing another person. And so sometimes the the cost cutting is going to happen more effectively if you don't look at it be like, how do I cut costs immediately?
Deborah Weinswig (21:18)
Yeah.
Ethan Chernofsky (21:18)
But have the mentality of this thing is here, it can help you, figure out the ways it's gonna help you, but pace it. You don't need to have Rome wasn't built in a day, you're not gonna find all of AI's value for your organization tomorrow.
Deborah Weinswig (21:30)
I think those are very, very wise words. So, Ethan, as a bit of a surprise, at the end of all of our podcasts, we do a lightning round. So you can pass, you can alter the question a little bit if it makes it more comfortable to answer, or you can just jump right in. And so we have we end with 10 lightning round questions. So let's jump in. number one, most overused retail metric.
Ethan Chernofsky (21:54)
Retail metric. this is so hard. I wanna s
From the retailers themselves.
I don't know. this is bothering me. You know what? Revenue. Revenue per store. I think it's the most overused. I think it misunderstands the the long term value of the store. So I think thinking about sales per location is sales per square foot especially. They're it's a crazy metric that not only do I think it's exaggerated in its value, I think it often points you in the wrong direction.
Deborah Weinswig (22:25)
I like that. retailer whose traffic you always check first.
Ethan Chernofsky (22:29)
Target. I have a weird obsession with Target. the close second would be
Deborah Weinswig (22:32)
Okay. We're
Ethan Chernofsky (22:33)
Starbucks.
Deborah Weinswig (22:34)
not gonna believe it. That's literally like my next question. Is
Ethan Chernofsky (22:36)
Yeah.
Deborah Weinswig (22:37)
target turnaround, early evidence or premature conclusion?
Ethan Chernofsky (22:41)
Er early evidence. I love Target. I think they're I it meaning could this take another longer term? I couldn't it's so lovely to not be saying this as a placer representative. Target's
Deborah Weinswig (22:51)
Mm.
Ethan Chernofsky (22:51)
amazing. There were i there were fundamentals that weren't being operated properly in the store. If they fix
Deborah Weinswig (22:56)
like like inventory.
Ethan Chernofsky (22:58)
the fundamentals, the thing goes back to being as incredible as it was. I could not be more bullish on Target.
Deborah Weinswig (23:03)
Probably
even more so because I think what needed to be fixed was quite simple. It was just a matter of kind of like rallying everybody to do it. So I I agree with you a hundred percent. All right, malls comeback, consolidation or reinvention.
Ethan Chernofsky (23:16)
All three. I mean the the
Deborah Weinswig (23:17)
Ha ha.
Ethan Chernofsky (23:18)
concept is seeing a comeback. there is there's no question that it's no I mean nobody. Most did not expect malls to be playing the role that they're playing today. it's happening because there was a reinvention, but there was some malls that just don't make sense anymore. And so you're going to see I think fewer, better malls. but this is this renaissance I I also think was super important. One of my favorite points
of my entire time at Placer was that the Mall Renaissance was not random. This isn't headwinds or tailwinds. This is really smart people at the Mall groups, at Simon, at Tauman, at Tanger, at all of these pla URW making unbelievably smart decisions and understanding where the future was heading. And I I don't think we give them enough credit
Deborah Weinswig (24:00)
No, I I
Ethan Chernofsky (24:01)
for what they did.
Deborah Weinswig (24:02)
I can agree with you more. Okay. More revealing frequency, dwell time, or cross shopping?
Ethan Chernofsky (24:09)
Depends on for who. I like cross shopping more. I think cross shopping is a powerful indication of I think it's the most interesting and underutilized psychographic.
Deborah Weinswig (24:18)
Interesting.
this is not in lightning round questions, but how do you think about auto?
Ethan Chernofsky (24:24)
Ooh, like auto centers, like places I go to get things fixed or places I'm going to buy a car.
Deborah Weinswig (24:28)
So we're seeing more and more, at least, you know, I spent a lot of time in real estate in Canada, both happening at malls. So the kind of fix it and the sale. And so what happens is on the sale, right, like no one's going anywhere else, they're just going to buy the car. But for the next, you know, however many years, as they come back to get things fixed, they oftentimes will just wait. And so not only are you obviously driving sales per square foot up through the roof.
But you're bringing a new customer in some cases into the mall.
Ethan Chernofsky (24:57)
Yeah, I I love it. I I give my favorite mall example was Tesla in the in the Aventura mall. Like
Deborah Weinswig (25:03)
Yeah.
Ethan Chernofsky (25:03)
it was my wife is in is in Zara for, you know, almost an hour with my oldest and me and at the time my two younger kids Tesla Tesla. I had no interest beforehand. I was not not a car person. It was I I c I couldn't be more obsessed now. And it's like what an amazing experience. And by the way, doesn't it shows you that
our e expectation of what does and does not belong in these spaces is very often incorrect.
Deborah Weinswig (25:27)
Hmm. I I remember, gosh, was years ago. we were in it I was I think I was on some ICSE trip and we were in Indianapolis and not only did Nordstrom say that they would never close and they did like a year later, but that that's besides the point. But the center that we went to it was amazing because it was like three stories on the third floor was almost all academia.
And so I was like, how brilliant is this? Because you're you're leveraging an existing infrastructure, which was actually the mall is quite nice. And then you're keeping it, you know, kind of like utilized for more hours in the day. And you're like then bringing all these people into a mall who can also shop. So it was yeah, it was it was really interesting to see. And I think that I I I'll tell you, I had always thought that when we saw the whole kind of let's just say,
restructure of WeWork and the leadership team. I thought that Sendeep had some kind of like four one one and that consumers were going to start to move to the mall to work in like a WeWork and that there is going to be this massive kind of like deployment of capital from We work into like mall space, which didn't happen, but I I was I always thought that was an interesting idea.
Ethan Chernofsky (26:39)
I was convinced that this was happening. I developed I developed, I don't know what the equ like a a a crush on industrious. I loved
Deborah Weinswig (26:47)
Mm-hmm.
Ethan Chernofsky (26:48)
this idea so much. And then and then it didn't really happen the way I expected it to. And I I think it still could, but it feels like that idea and then the other idea that never really took off that I was expecting more from was the kind of
short term space that you could easily like you could turnkey for a retailer that was testing out retail. Like that six months to a year,
Deborah Weinswig (27:08)
No
Ethan Chernofsky (27:08)
that never really took, even though conceptually
Deborah Weinswig (27:10)
It's
Ethan Chernofsky (27:11)
it always felt like it should work.
Deborah Weinswig (27:12)
it's interesting. There was a REIT that we were partnering with and we were trying to do that for them. I'm like, we end up spending so much time talking to person or the company taking the box, right? Like how important visual merchandising is and POS 'cause these were all like digitally native companies moving offline. And I'm like, this is where I mean I always thought retail was complicated, but like retail in a physical store
That's like that's complicated, right? And so
Ethan Chernofsky (27:39)
Agreed.
Deborah Weinswig (27:39)
that I thought was you know, was really, really interesting. one one question we're like so far off of our kind of like lightning round, but okay. what did you th what what we I actually thought you were gonna say this on in terms of like, it's gonna work, but it's not. dressing room technology or fitting room technology.
W without we're not mentioning any vendors. No vendors. Just like
Ethan Chernofsky (28:00)
I I started off my career in Tech PR. We worked with companies that did the sizing technologies and the fitting room stuff that was gonna work at home. I have hated this space with all of my heart and soul since for the last
Deborah Weinswig (28:09)
We were separated at birth, we were separated at birth.
Ethan Chernofsky (28:12)
so I am I am I am OG at hating this technology and thinking it has no potential and it worries me that I'm too convinced that it's gonna happen and I'm gonna miss it. But I am there are certain things I just do not buy, that's one of them.
Deborah Weinswig (28:27)
Yeah, we like w when when we're together we can talk about some some specific brands because I'm just like and then and then I know it's still like the mirror technology, but when like Lululemon bought the right the the workout company and I'm just like the the mirrors then no bueno, right? Like that is not like that there's nobody can convince me that this and then, right, like I as a consumer, when I know that somebody has that technology in their dressing rooms.
I'm like leaving on most of my clothes and trying stuff on over over the top 'cause I'm like there you cannot tell me that there is not like two way like I I just don't no matter how many times you tell me, I'm like not having
Ethan Chernofsky (29:00)
Totally
I am totally with you. And I'll even like the Lulu example is so interesting because Lulu is one of the companies that I I wasn't a big Lulu shopper personally, especially this
Deborah Weinswig (29:09)
Mm-hmm.
Ethan Chernofsky (29:09)
is we started doing this pre-day breaking into men. And they were one of the retailers that you look at and you're like, my god, you guys are so good at what you do. I just think sometimes the well jump into these other spaces,
Deborah Weinswig (29:18)
So until you're not. Until you're not.
Ethan Chernofsky (29:21)
but like if you you know what it's so interesting? Like I I was
Whatever. I mean again at this stage you can say whatever I can say whatever I want. Like I I was a Target shopper. I love Target. I was not a big Walmart shopper. If I have if there's any retailer that I went from that my mind changed the most on from the beginning of my journey of placer to the end, it was Walmart. Walmart is is the most brilliant company I think I've ever seen. I just I think I I I don't know how they're this good. It's so impressive when they they buy jet and jet doesn't take off but somehow Walmart becomes incredible at e-commerce.
I'm like, that to me is genius. It's like you do things, and even if it doesn't work out plan A, there's just still an incredible plan B. I mean, that is the yeah, they do things, they make pivots that you're like get questi that I would question in the same way as almost anyone else. But now if they do it, I just assume that it's gonna work out. Even if it doesn't work out the the most obvious way, it's gonna work out some other way.
Deborah Weinswig (30:17)
I'm gonna tell you, it's so interesting. We're gonna take our whole conversation and just like you just put wrapped it up with a bow. The reason that Walmart makes such great decisions, not only in terms of where they invest their money, their time, their people, is because it's all data driven, right? There is of course emotion in things, but ultimately they they lean much more heavily into the science than the art. And
I remember spending some time with their their leadership team and they were so funny, they're like, I won't I won't talk about the technology specifically, but they're like, Don't come in and get everybody all excited. 'Cause they're like, you know, we don't know, right? Like and and they wanted to have kind of a certain level of comfort. So they were, I would say, early adopters, but not the earliest. So they would have kind of enough data points to really know.
if it was going to work. And and I think and then what I also loved, I mean there's so many things, but how they worked with earlier stage companies is that, 'cause you could have eighteen people sitting sitting around a board meeting and they all have a different favorite for the same problem. They would literally go in and test most of them so if they could get everybody on the same page. I mean I've never seen anybody do that. But
they cared
Ethan Chernofsky (31:33)
Incredible.
Deborah Weinswig (31:33)
so much about, the the leadership team feeling like they had a voice. And, you know, it's I feel like they really had a inflection point during the pandemic and they started to think differently about monetization. So whether it was retail media
or
retail as a service or selling their data. And and then on the other side of that, I I was fascinated to see how many retailers utilize a retail as a service, even when they were direct competitors, there's like a level of trust with Walmart that you know you you wouldn't necessarily see with like another retailer. So I I I think that that's been you know that's been like beyond interesting. And I I will say so it's interesting. There are
Okay. I'll I'll Right I I always like to use three. So Gap fell off of a cliff much faster than I it was like it's funny, right? Like C N B C like I was on every quarter to like basically like bash it. And I remember the last time I was on, right? And I'm like I and they had done actually I previewed earnings and I was like, I don't think there's any way it can be any worse
And so as a result, the stock is going to go up. Like, right, we had done like our back of the envelope math and it did. And then they had me on on the day that they reported, and I said, you know, the fact that we're starting to see these like little specks of like glitter, I think they're gonna be okay. Like I think they're figuring it out. And when you can leverage across, you know, so many different brands your portfolio, I think that's that's really interesting. You look at Nike, right, where you made the willful decision
to pull everything back into kind of you know your your direct ownership versus wholesale et cetera and that was obviously the beginning of like a rocky road and you they've had a lot of turnover and I think they've gone a lot of different directions but now I don't think it's all been announced the the level of leadership that they're bringing in because I think they just realize you know if we don't like this is like our moment, right? Like
Ethan Chernofsky (33:30)
Mm-hmm.
Deborah Weinswig (33:30)
We have to
take our like, okay, things can't get any worse, they have to get better. Which we can like come up with a name for that. But I had that was interesting. And then you look at like what's happening with Lulu, and you're like, in a million years. So first, the person who calls all the chaos at Nike they hired. Secondly, they had let go a year ago, Julie Averal on you know, the supply chain tech side, they hired somebody else, he's already gone. And so
I I would say and like it's interest going back to Ethan, it's all patterns. Right? Like and that's where I think you look like gap, right? It could not get any worse and and they they in my mind they they weren't apologizing anymore, they were owning it. I feel like Nike got to that point, it's like we we did some dumb stuff, right? Like we know that we did and and we're going to go in and we're going to start like with people side. And with Lulu right now, I I I mean, I don't know
I just have to say it. I don't know how you get that dumb that fast because you went from like being I mean truly perfect and and and you had so much room, like you're saying, like weren't even in men's You had all this room to grow. So I'll okay, so I'll I'll we we we mi we marched through a lot of the lightning round questions. So I'll leave you I usually have like one like at the end that will
kind of like help our leaders get into your head and and really understand how you see things. So right, you had access to all kinds of traffic data and other data to understand retailers really from the inside out.
What is it that you learned that is a real determinant of success? And I'll I'll preview my as an analyst and even now, as you can tell by my whole kind of like diatribe around, you know, gap, Nike, and Lulu, I watched leadership changes like a hawk. And it doesn't even matter. It could be your a GMM, a DMM, it could be store managers. But for me, when I see talent and it's just it it's truly across the board, when people are leaving
it it suggests something or when you start to see some of these headcount reductions. What is it, Ethan, that you look at kind of from the inside out to tell you like the health of a retailer, not only from a stock perspective, but from like a longevity perspective?
Ethan Chernofsky (35:38)
Alignment of strategy and data. So
Deborah Weinswig (35:40)
Hmm.
Ethan Chernofsky (35:41)
meaning there are companies, like Trader Joe's is a great example. Trader Joe's should not do the same things that Publix does. They're different entities, they have different business models. But when the data suggests that the strategy doesn't fit, when the strategy doesn't doesn't, when there's not alignment there, so when you look at a someone puts out a strategic approach and they talk about it openly, but it doesn't make sense with the business, I'm worried.
When you talk about an opportunity that shouldn't make sense for your business, I'm worried. And there are some things that I forgive because it's like I get the decision. Like there's I have a weird obsession with Macy's. Macy's has
Deborah Weinswig (36:13)
I love it
Ethan Chernofsky (36:13)
had a lot of plays that haven't worked.
Deborah Weinswig (36:16)
It is
Ethan Chernofsky (36:16)
But they try things and those things make sense. They don't always work. Fine. That is the part of the process.
Deborah Weinswig (36:21)
They don't well but
but they don't often work. That's actually what's even weirder. Right? I have to tell you I mean, think about it. Mark Mastronardi, who was I mean, he I I I was like obsessed with how he was like thinking about doing things differently, right? Like focusing on 12 time and entertainment and restaurants, like what were the things around the shopping experience? And i it was like I thought he was a very talented executive, but it was hard
He goes to Equinox and the place in like 18 months looks like a totally different company. Right? Like he was an incredibly talented executive. And so, right, like, if you think about it from a Walmart perspective, right? People leave and they're not as successful because, right, you you don't have all that infrastructure, you don't have all those like talented people. He leaves Macy's, he's more successful. So so there is something structurally there that's that that needs to be repaired.
Probably from like the inside out. I mean I think they're the the legacy systems that they have, it's it's amazing that they can kind of like have their POS work. So I think that the investment to fix is just so large. All right, okay, one last question. I know I said that was the last one, but this is this is a doozy, I am not going to say anything on this one. I'm gonna let you this is like home on the range. We're just we're just head what are your thoughts
On the brand aggregators like ABG, who just acquired a company? I was on the board of Guess and then WHP who just acquired Marc Jacobs. What are your thoughts on how they march forward? The impact on the retail landscape. And if retail, let's say, has a weak holiday season or two, do these companies just continue to get bigger?
And so we have less publicly traded retailers and maybe even less transparency.
Ethan Chernofsky (38:01)
I like the House of Brands concept. I think the question is a brand needs to be authentic, it needs to be real, you need to feel like you can connect to them. The question is can someone figure out how to make it, how to put puzzle pieces together while allowing each puzzle piece to tell have a different picture that they're ultimately putting? Because it's i if I have brands that are not directly interacted, I how do I make those connections? So the upside is if I can figure out how to create this
House of Brands kind of mall-esque whole is greater than the sum of its parts experience. It's amazing. I think it's very difficult to do. so it's there's upside, but I think it's really challenging to accomplish.
Deborah Weinswig (38:39)
So know what's interesting what you just said is and I I think that, right, Macy's has always had incredibly nice, right? Terry Lundren, very nice. Jeff Gannett, very nice. Tony Spring, nice, and maybe leaning into a bit more about what I'm gonna talk about, is if you look at, right, like Yehuda at WHP and Jamie, I mean, probably two of the most disciplined people I've ever met in my entire life. Barnone. They
don't waste words, they don't waste time. I'm wondering, right, because what they've truly built in such a short period of time, I I will say going back to, you know, Miracle on Thirty Fourth Street might be the two of those guys. But sometimes it's hard to be
kind of slicing a knife through something and being really nice. And I think the retail industry, I mean, it's one of the reasons I I mean, everyone is like, they're they're nice to a fault because right, we serve the customer. And so I I I wonder sometimes if like the best, you know, kind of some of the best operating models are right where you have
someone in the leadership team on the science side and someone on the arts side and it goes back to this this just ties it all back with with data, you this flexibility and a framework, do you think that ultimately is the secret to success?
Ethan Chernofsky (39:51)
Yes. Data has a powerful input that you can use, not the only input. But I think, you know, what we talked about before, the greatest strategies in the world don't make sense in every place. Do you have the wherewithal to apply the right strategy in the right place and have the right data points to tell you if that strategy is working and if it's progressing towards a goal? If you do those things, I think you're in w you're very well set up for success.
Deborah Weinswig (40:11)
Ethan, I can't wait to have you back. This is like retail therapy, but in a totally different way. So I I I feel like I'm like I can go into my weekend and just, you know. No, but this is truly I I think we covered a lot of ground. I think we leaned into some things that were incredibly complex. But it's like the the like I always like to test hypotheses. I think the one that we came in with
we're leaving with, but even probably more conviction. So thank you. This was fantastic. I wish you well in everything that you do and we'll talk to you soon. Take care.
Ethan Chernofsky (40:39)
Thank you.
Deborah Weinswig (40:40)
Thanks.
Philip Moore (40:41)
Thanks, Deborah, and thank you for joining us. If you enjoyed this conversation, please check out our full catalog of interviews with retail industry leaders and set your notifications so you don't miss any of our upcoming episodes. If you want more insights on the future of retail, visit Coresight.com to check out over eight thousand podcasts, webinars, and reports. Have a wonderful week.