Latest / The Retail Podcast / US Retail Hit $1 Trillion in One Holiday Season - What's Next? | ITAB Group Podcast Ep.1

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US Retail Hit $1 Trillion in One Holiday Season - What's Next? | ITAB Group Podcast Ep.1 · The Retail Podcast

• 0:00
  Hello and welcome back to another wonderful edition of
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  ITAB podcast live from the ITAB stand.
• 0:07
  I'm joined by friend, fellow Co host.
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  Got more? Important, yeah.
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  For global travel, but more importantly, just kicked off the
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  speakers corner session. The talk was packed with so many
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  interesting insight and obviously as someone who loves
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  content and loves to listen to the future of retail, rather
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  than me taking in that direction, I just want to for
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  you of all all the information that you were presenting, what
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  was the take away? You know, I mean, ultimately
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  right now in the United States it it's really AK shaped
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  environment, right. So you're having 10% of the top
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  decile of earners in the US representing 50% of the spent.
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  So that's really that top line and it's increasing.
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  It's more and more. I mean, a few months ago it was
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  10% was maybe 40%. So that number is growing and
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  growing. Well, kind of the bottom line,
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  the shape of the OK, that percent of the total spend for
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  GDP is going down. So the bottoms getting squeezed,
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  the top is growing. So it's kind of a good news, bad
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  news situation. You know, we're we're just
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  starting to kind of feel some of the inflationary factors happen.
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  Core goods costs had been really flat now in February of 2026 are
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  starting to feel that a bit in the US.
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  So I think that's one of the main takeaways.
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  The other is that at the end, at the end of the day, no matter
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  what it is, if it's COVID happening in 2020, hard to
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  believe that was so long ago or some other, you know,
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  geopolitical. Retail is resilient.
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  It continues to be resilient. And what's helpful and what
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  helps retail continue to be resilient is that the consumer
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  and the customer has been resilient.
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  People continue to need goods and services, right?
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  You know, they might trade down, they might buy less.
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  But at the end of the day, retail will continue.
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  And the struggle that a lot of our members have is really just
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  finding out what the customers want and meeting them there.
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  So it just changes year over year what, what the challenge
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  is. But retail is always a little
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  challenging. So at the end of the day, it's
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  just a different challenge. So I, I feel good about the
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  outlook for 2026. I don't think it will be a flat
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  year. I think there'll still be
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  growth, you know, upwards of 2%. So hopefully that will continue
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  into 2026 and people will start to feel a little bit of that,
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  you know, that Divergent maybe come back together.
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  And and your forecast for 20/25 was 3.8%.
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  We did. I think it was 3 point.
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  What did we say 3 point 7 was the high we actually exceeded
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  that at 3.9%. It was the first holiday season
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  in U.S. history that hit a trillion dollars trillion with
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  AT like hard to imagine those numbers.
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  You know you hear the billions and the 1,000,000 but Sutter a
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  trillion to me billion used to seem big now trillion seems even
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  larger. So to hit a trillion dollars
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  just in retail spend in November and December, that was the
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  increase of just shy of 4%. That's.
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  Fantastic. I'm going to ask you to take
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  your mind back now to that show that happened in January, that
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  tiny one in New York. What was for you after that
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  show? Because I don't think we've had
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  a proper debrief. But in terms of when you think
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  about the CEOs that you meet and you meet a tonne of the, what do
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  you feel they came away with from that show?
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  What was the essence? What was the feeling that they
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  came away with? That's a great question.
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  And you know, the good news is we had a tonne of positive
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  feedback. It was the energy was there.
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  The, you know, all the people, the right people were there, the
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  right partners were there. The content was great.
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  Thanks to my team. You know, ultimately most of the
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  CE OS and the senior executives we've talked to, again,
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  resilience is kind of the mantra for the year.
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  Continuing that from last year, they're all looking towards what
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  can help them from a cost savings perspective as well as
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  saving a margin, right? So it's not only about top line,
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  it's always about kind of that bottom line.
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  So what can do that? AI can do a lot of that, both
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  internally from a cost, you know, efficiency perspective,
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  but also potentially in reducing some of the spend you have to do
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  from creative costs, you know, rerouting packages, a ship from
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  the store, you don't have to ship it to ADC.
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  Maybe it just comes direct from the store and you save that one
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  extra shipping cost. So there's a lot of these
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  automation tools that take a minute to learn right there.
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  It's not all set it and forget it, but you're able to advance
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  the success and that margin piece a bit more than you have
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  been. So a lot of retailers think
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  they're behind. I am here to say retailers, you
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  are not behind. Everyone is thinking that.
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  So what that means is everybody is excited to try something.
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  It's about dipping your toe in, starting small.
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  Do not give the business to an agentic agent yet.
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  Do not, do not feed it everything.
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  But it's just like with personalization and all of the
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  AB testing and the multivariate testing we did, you know, years,
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  decades ago now on websites, it's testing into it, seeing
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  what's working, but having the KPI's to know whether it's
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  working. That at the end of the day, if
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  you just feed everything into a system, apples to apples, you
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  don't have that measurement anymore.
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  You need that measurement. You need the kind of the
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  baseline to know what, what you're improving upon and then
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  reiterating. And you know the other thing
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  that a lot of the CE OS and senior execs are asking where
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  does AI sit? Where does AI live in the
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  company? And I've heard honestly almost
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  every department now, I've heard HR, I've heard legal, I've heard
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  technology, I've heard it's independent, trying to think of
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  a group that doesn't live in. And honestly, I don't think
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  that's. Doesn't exist.
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  Yeah, I. Know I understand you know every
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  group can learn something from having more productive well,
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  not. Exploring good, say experiment,
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  right? Yeah, I mean.
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  Experiment, yeah. Experiment.
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  What was really interesting for me is store formats in the US.
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  People seem to I don't want to shy away from the fact that loss
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  is still a massive, massive issue, right?
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  So looking at loss prevention as an area I don't think and we can
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  undermine the the impact it has on margin, right and and how
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  it's draining margin, which then breeds this sort of well, OK,
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  maybe we need to look at new loss preventative solutions, but
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  probably store formats as well. Yeah.
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  I mean, mitigating the fraud in store is a huge piece, Yeah.
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  And is the answer locking up goods, I don't think.
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  NRF protects and and you have a focus on that.
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  We do. And yeah, I mean, we're trying
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  to get a, a organised retail crime bill passed through the
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  Senate, Corka. And it is, I mean, truly you
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  cannot. Not only is it a margin hit at
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  the end of the day, it also is an employee morale hit.
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  They see 100%. See the goods being taken out of
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  the store and just walked out and they they.
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  Can't. Well, they can't.
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  I mean, legally it's like let them go and security deal with
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  it, but you can't do it. Yeah.
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  And. You know, from a danger
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  perspective and all of that, being a frontline of retail is
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  unfortunately increasingly more vulnerable than it has been.
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  And ultimately, if you don't have kind of the back end
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  repercussions and laws that protect retailers, I don't know
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  how it gets better. You know, there's a lot of ways
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  to kind of have formats and have maybe mitigated risk, right?
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  You look at some of the stores like Sephora or Ulta and there's
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  a tester or one or two that you can take for the, you know, the
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  colour you're looking at, but ultimately the big pile of
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  goods, it's not sitting right there on the shuttle, right.
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  So maybe mitigating some of the risk.
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  And also at the cash wrap, what are the frauds?
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  You know, the hard declines, the soft declines, asking for Ida
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  lot of that. It might take a minute or two
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  more to restock or to train the employee to ask for the ID.
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  However, I mean, at the end of the day, it is about margin.
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  So there there are a lot of retailers who played with that,
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  but ultimately it will impact some retailers more than others.
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  No one's walking out with a refrigerator operator in Best
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  Buy, right? So.
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  You know. On a on a Dolly.
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  But again, the fraud can happen all different places.
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  It can happen online, you know, some, you know, there's
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  obviously a lot of cyber and a lot of reputational damage that
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  can happen. So all of that and of course AI
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  can help with a lot of that, but it's not a silver bullet for
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  anything. So store format is absolutely,
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  you know, gone are the days of, you know, the piles of 600
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  T-shirts and that doesn't make sense anymore.
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  Nor is it efficient for the retail staff to only be folding
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  shirts when they can pick and pack orders in the back as well.
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  Yeah, there was a fantastic talk where there was talk and I
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  forget. Obviously it was at a NRF show,
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  no? No, it was at an NRF show.
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  I was thinking of the name of the retailer, but there's
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  basically A1 skew retailer where you go.
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  It was like born Bonobos that Walmart bore where you would go
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  in, get fitted and then every single time you get they have
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  your size, you just go to get the style right.
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  What does it speak to you? And there was a ladies fashion
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  brand that's bringing that back to act.
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  So for me, I love the fact that the industry is still there's
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  this new entrant of format changing, format challenging.
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  Innovating and the experience. Yeah, they even.
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  Feel like you're being styled. I'm in a dressing room.
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  Someone is bringing me my size. I don't have to shop and carry
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  and hang and manage my bags. I mean, it does.
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  It could also elevate the experience while protecting
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  margin, and that's a win. Right.
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  Yeah, it's so, it's so funny. I mean, I know we're on the ITAB
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  stands and and. It's all stands.
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  Yeah, it's. Incredible.
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  But it's so funny because I was talking to the designers
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  yesterday in luxury fashion and I was, I was just trying to get
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  out of them like what's the future, right?
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  What are the colour tones of the future?
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  What are the palettes of the future?
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  And we're not going to talk about that, but.
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  We need to bring colour back. Yeah, but that was the thing.
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  Like everyone's in black and blue, but it just felt the store
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  format. Yeah, it feels that people are
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  not afraid to experiment with it and, and and I guess.
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  It's the same. I don't know if it's like this
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  sort of inner youth in me that says AI and and all that stuff
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  is great for the the older generation.
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  We still want to go into stores. We still want to see
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  interesting. Format and.
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  Experiment and experiment. Yeah, because who wants to buy
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  something if you don't have any connection to it?
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  And sometimes the connection is physical and visual, right?
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  Yeah, you know. Fantastic.
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  You've been here for a couple of days.
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  I know you've done a tour of Europe.
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  Tour of Germany, yeah. Germany, sorry, not Europe
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  Germany. What are you going to go back
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  home and what's the any things that you stand up moments for
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  you. I know you'll be in Paris and I
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  know you've been to Singapore, but from this specific.
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  Trip from this perspective, this trip, you know, at the end of
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  the day, I think all retail on some level is global because
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  it's it's emotional. Yeah.
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  You're hard pressed to find someone in retail or shopping in
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  retail who doesn't have an emotional connection on some
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  levels to brands, right. So I think that is global what I
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  haven't seen and much and it's so it's been Berlin, Cologne and
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  Dusseldorf so far on the on the German NRF tour this this week
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  with my colleague. What I haven't seen a lot of is
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  the stores that are, you know, we've been mostly in urban
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  environments, the giant footprint stores, the the, the
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  clubs or, you know, obviously the kind of the Costco's or the
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  B JS. I haven't seen those certainly
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  in an urban environment and that makes sense.
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  But even the grocery stores, people here tend to do their
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  shopping day of or maybe for two days.
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  They don't have the huge urban refrigerators that can soar a
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  week's worth of blood. So everything is a little bit
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  more localised. Everything's a little bit more
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  by that. Point you.
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  Feel that I too, I feel that you walk into a little or an ALDI
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  here and. And.
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  It just feels a slightly different than AUS store and
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  actually, and it does feel a lot fresher.
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  I will say the food is amazing. Every croissant and I know we're
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  not in brands. I'm fully aware like Dang it, if
• 12:15
  they still aren't so good. You just the ingredients feel
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  fresher. The the time from you know, farm
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  to store is farm to fork is much less than it is in the US.
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  So that piece absolutely the US can learn from.
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  But what's, what's really interesting here is the, I will
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  say all of the store associates, we don't have this in the US,
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  but all the store associates also speak English.
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  And I asked who do you speak English?
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  Do you speak, you know, and it's really interesting when you go
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  as a kind of you want to be a global shopper and it can be and
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  they can still help you and your native language.
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  That connection. You feel a connection and you
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  feel a kinship. Yeah, sure.
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  And now I'm going to go home and tell everyone about it.
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  It's been a been a wonderful, pleasant surprise.
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  Jill, thank you so much, Vinnie. Pleasure.
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  So much fun, thanks. Thanks for having me and thank
• 13:07
  you to ITAP for making this all possible.