I walked three stores before recording this episode, and each one explained a headline better than the press release did. Best Buy’s new Meta Lab shop-in-shop, Lululemon’s stores, and the Babies R Us shops inside Kohl’s all show what happens when a retail strategy meets the sales floor.
I joined my friend and former Gap and Target colleague Chris Niesen for episode 2 of Making Space Real Time. The show is presented by the Association of Retail Consumer Professionals (aka ARC) in partnership with Omni Talk. We both walked all three retailers, and here is what we found.
Best Buy’s Meta Lab shop-in-shop: strong concept, rough edges
Best Buy’s Meta Lab is the first retail display that made me see a future for smart glasses. The shop-in-shop launched in June and now sits in 50 Best Buy stores. Meta is also growing its standalone Meta Lab stores from 8 to 14.
The logic is simple. People need to try AI glasses on before they buy them, and Best Buy puts Meta in front of shoppers faster than Meta can build stores. Meta sold at least 7 million pairs last year, according to Business Insider.
What works
Chris walked the Roseville, Minnesota store and I walked Richfield. The Roseville shop sits near the front of the store, next to Geek Squad, with digital screens framing the space. Every table lets you handle the product, and smart mirrors show how the frames look on you.
The glasses are also displayed like eyewear, not gadgets. I own the first pair and never wear them because I feel like a dork. These styles I could see wearing in a Paris cafe while they translate the menu.
What doesn’t
Execution is behind the concept. In Roseville, only one of the smart mirrors was working. About 600 square feet next to the 900-square-foot shop sat empty, and staff bags and a loose vacuum were on the floor.
Both of us also found the associates eager to the point of crowding. Chris counted three associates and, at most, two customers.
The shop-in-shop question is who pays for staffing
I asked the associates in Richfield who pays them. They told me they are Best Buy employees, but Meta funds their time in the shop. That model fits what Best Buy already does well with deep-pocketed tech vendors.
It is a harder question for Best Buy’s other shop-in-shop tests, IKEA and Yardbird. I ran lawn and patio furniture at Target, and outdoor vendors will likely not pay to staff slow-moving product. Without dedicated labor, Best Buy associates end up selling patio sets instead of electronics.
One more hurdle is the prescription. If smart glasses become everyday eyewear, the optometrist becomes part of the purchase. Warby Parker put optometrists on site, and Meta may face the same need.
Lululemon’s Q2 slump is visible on the sales floor
Lululemon’s problem is product, and the stores show it. In Q2, revenue fell 4.3%, comparable sales fell 9%, and net income fell 11.2%. The women’s leggings business dropped 20%, and the company lowered full-year 2026 guidance and cut planned store and pop-up openings.
I walked in at 2 p.m. on a Saturday and I was the only customer. Three associates at the counter laughed when I pointed it out. Traffic like that on a Saturday tells me two things: there is a product issue, and the brand is not in great shape.
Lululemon has lost its point of view
Chris’s read is that Lululemon no longer knows what it wants to be. Alo tells a color story that changes almost weekly. Vuori owns a coastal look, and the Gymshark shop at Dick’s Sporting Goods knows exactly who it is for.
Lululemon’s floor mixes mismatched colors and silhouettes, and the muted beige design of its newer stores makes that more obvious. The pant wall and the women’s bag wall are still strong moments. But I have seen that pant wall a hundred times, and the men’s floor looks the same year after year.
The test I use in any store is whether it tells me what to buy this season. Lululemon doesn’t.
What the Lululemon turnaround plan gets right and wrong
Management outlined four store moves: cutting SKUs by up to 15%, a new premium fixture package, deeper localization, and merchandising by activity. After 20 years in merchandising, I hear “SKU reduction” as code for “we need to focus.” New fixtures are a smart investment.
Localization and merchandising by activity will not move the needle. Localization is what you do at the margin when the product is already working. New CEO Heidi O’Neill has an uphill climb, and I don’t expect her impact to show in results before mid-2027.
My 13-year-old son offered the bluntest data point of the week: “Dad, the girls don’t wear Lululemon anymore.”
Kohl’s Babies R Us expansion: right idea, broken store
Babies R Us can work at Kohl’s, but only if Kohl’s fixes the store around it. Kohl’s is adding Babies R Us shops to 56 more stores this fall, mostly in California and Texas, on top of the 200 it opened in 2024. Meanwhile Sephora at Kohl’s, about 10% of total sales, has declined for multiple quarters.
The Kohl’s store is the bigger problem
Chris spent 45 minutes in his local Babies R Us shop and left overwhelmed. Every baby category was there, but in-stock levels were poor and cardboard boxes sat on the floor. Some gondolas stood a foot and a half apart, too narrow for a stroller in a baby department.
His prescription is to cut 20% of the fixtures and product across the whole store. Less to recover means the store team can keep up. What remains can become a focal point instead of a sea of everything.
Where I disagree, slightly
“Focus on the core” is usually code for having the wrong people in the job. Balancing the mix on the floor is the chief merchant’s job every day, and Kohl’s just hired a new one. To me the store looks like the love child of T.J. Maxx and Macy’s, which raises the question of what purpose Kohl’s serves.
I still like the baby bet. New parents arrive every day, and there are few places to shop baby products in person beyond Target and Walmart. If Kohl’s can operate Sephora, it can operate Babies R Us, and the stores have floor space to spare.
The thing I would cut first is Amazon returns. They may drive traffic, but they distract the store and do nothing for the reason Kohl’s exists.
What Best Buy, Lululemon, and Kohl’s have in common
All three stories come back to whether the store can deliver what the strategy promises. Best Buy has a good partner and a funded staffing model, and needs to finish the details. Lululemon needs product and a point of view before any fixture or localization plan matters. Kohl’s has a sound traffic idea inside a store that cannot keep up with what it already carries.
Next on my list for Chris is the Toys R Us pop-up stores, with more than 100 opening this year. If they turn out to be Spirit Halloween part two, WHP Global made a smart acquisition. Toy margins are not costume margins, though, so I want to see how many are viable.
New episodes of Making Space Real Time come out every other week. Search Omni Talk Retail wherever you get your podcasts, or watch at youtube.com/omnitalkretail. Chris Niesen also writes Retail in Real Time on Substack.
Be careful out there.
Frequently asked questions
What is the Meta Lab at Best Buy?
It is a shop-in-shop where shoppers can try Meta’s AI glasses and VR headsets. It launched in June 2026 and is in 50 Best Buy stores. Associates at the Richfield, Minnesota store said Meta funds the staff who work it.
Why are Lululemon’s sales falling?
In fiscal Q2 2026, Lululemon’s comparable sales fell 9% and its women’s leggings business fell 20%. Newer away-from-body styles have not resonated. Competitors such as Alo and Vuori also present a clearer point of view in store.
How many Kohl’s stores have Babies R Us?
Kohl’s opened about 200 Babies R Us shops in 2024 and is adding 56 more, mostly in California and Texas.
Is Sephora at Kohl’s still growing?
No. Sephora accounts for about 10% of Kohl’s sales and has declined for multiple quarters.
What is Making Space Real Time?
It is a biweekly podcast about physical retail hosted by Chris Niesen. The Association of Retail and Consumer Professionals presents it in partnership with Omni Talk. Each episode covers store formats, category moves, and first-hand store walks.
Omni Talk® is the retail blog for retailers, written by retailers. Chris Walton founded Omni Talk® in 2017 and have quickly turned it into one of the fastest growing blogs in retail.