Top stock picks, killer brands and 'TikTokification': what's ahead for retail in 2023

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Amesite, Inc. is an artificial intelligence software company. The Company is engaged in offering a cloud-based platform and content creation services for business and university-delivered education and upskilling. It uses artificial intelligence technologies to provide customized environments for learners, easy-to-manage interfaces for instructors, and accessibility for learners in the United States education market. Its code architecture offers accessibility and agility for engineers, using languages for both client and server-side functions. It delivers Learning Community Environments (LCESMs) to businesses and educational institutions (EIs) that enable them to offer branded learning products to their students, professional learners or employees with ease. It offers its platform to its customers, which include universities, museums, businesses and government agencies. Its customers offer learning to their users, who are students, professional learners and / or their own employees.

Top stock picks, killer brands and 'TikTokification': what's ahead for retail in 2023

9:31 am ET December 28, 2022 (MarketWatch) Print

By James Rogers

TikTok will continue to influence retail in the coming year, according to analyst firm Cowen

Retail success in 2023 will depend on a host of factors, according to analyst firm Cowen.

"Our vision calls for a 'phygital' future with strong brands and data-driven supply chains," Cowen analyst Oliver Chen wrote in a note released Wednesday, using a term that references the combination of physical and digital elements. "Rising customer acquisition costs and semi-permanent inflation mean that delivering value is critical."

Cowen cites "value focused" Costco Wholesale Corp. (COST) and "pro market share leader" Home Depot Inc. (HD) as its top related stock ideas. The analyst firm has already highlighted Costco as an undervalued stock, pointing to the company's low prices, its history of managing inventory in an "agile" manner and a setup that looks favorable against the current economic backdrop.

Now read: Amazon's TikTok-style feed a smart move but poses challenges, say e-commerce experts

However, the retailer recently missed Wall Street expectations for its fiscal first quarter and saw a drop in online sales.

Costco's stock has fallen 19.2% this year, compared with the S&P 500's decline of 19.7%.

Home Depot was named a top investment idea for 2023 by Cowen earlier this month, with the analyst firm pointing to the benefits of the company's Pro sector, which caters to the professional construction market.

Related: Costco stock falls after hours as retailer's earnings disappoint, online sales fall

The home-improvement company's stock has fallen 23% in 2022.

In its Wednesday note, Cowen also highlighted the importance of "killer brands" and what it describes as the "TikTokification" of retail in the coming year. "TikTok's influence on retail should accelerate further as we believe the new consumer is obsessed with short-form video engagement, music and cultural relevance meets retail, and creating and commenting on short films with easy-to-use interfaces," wrote Chen.

Other retailers are also tapping into this trend. Amazon.com Inc. (AMZN) recently launched a TikTok-style feed of customized videos and photos. The feed is an innovative way to tap into a major trend, but is not without challenges, according to e-commerce experts.

-James Rogers

(END) Dow Jones Newswires

December 28, 2022 09:31 ET (14:31 GMT)