Romain Fouache (00:00)
our study shows that even as of this year, 44 % of customers have actually purchased secondhand. So we should assume that everything that can become a secondhand most likely will.

Shelley E. Kohan (00:38)
Hi everybody and thanks for joining our weekly podcast. I’m Shelley Kohan and I’m thrilled to welcome Romain Fouache ⁓ I’m sure I didn’t pronounce that perfectly well, but you can tell our audience how to properly pronounce it.

Romain Fouache (00:52)
There’s

no way to pronounce it if you’re not French native, so I always say if I know you’re talking about me, you said it well enough. So that was perfect. Thank you very much, Shelley for having me today.

Shelley E. Kohan (01:04)
my gosh, I’m so excited. So you’re the CEO of Akeneo and ⁓ we have a very hot topic that we’re going to talk about. think that retail in our industry is being reshaped, not just by price and product, but by value. So a lot of consumers today are really looking for those values. And so we’re going to talk about kind of two massive forces that are colliding at the same time. One is the consumer demand for transparency.

and also the explosive growth of secondhand shopping. And so we’re going to start with a fascinating deal that was recently announced where eBay has just acquired Depop. I think it was $1.2 billion. So tell us a little bit about your thoughts about what this means for the industry and for resale.

Romain Fouache (01:53)
Yes, indeed, 1.2 billion. That’s quite a transaction that took place in that space. And I think it just shows the shifting expectations of buyers. Secondhand was maybe a secondhand topic just a few years back. But now we are seeing eBay itself acquiring the deep up business. I do think we are seeing a shift of consumers that are thinking differently about the way they consume. And it’s a combination of the two.

traditional factors of secondhand, the first one being of course the element around pricing and cost. Yes, something that is secondhand can be just as usable as first hand but at a significantly lower cost. I do think as you say it also connects to another topic which is the topic of sustainability, which is the topic of consuming differently. And these two elements collide. People want to buy for less and

start to be more regarding of where things are coming from and the sustainability of their behavior. And that makes one big bang on the clear topic, which is secondhand ends the deal between eBay and Deepop.

Shelley E. Kohan (03:02)
Yeah, it’s a pretty big deal and I could tell you that. So my son who’s now 18 has been thrifting for probably six or seven years now. And it’s not just about the looking for value or the price. It’s that they really want to try. Why would I buy something new when I can buy something secondhand? So that’s a real generational shift in terms of how consumers are thinking about, you know, purchasing products, especially products that are

⁓ lightly used and or are in the higher-end market, the luxury sector. I know that’s been a big growth as well.

Romain Fouache (03:37)
Indeed, and you know, we launched, we did a survey fairly recently with consumers from the US, more than a thousand consumers. And what we did see is that ⁓ that question of sustainability is actually now top of mind. We’ve got more than three quarters of shoppers who actually look at how they consume and the sustainability comments of what they do when they’re actually buying. And I think that that is…

completely linked to what you mentioned, which is there is an appreciation for second hand because it does give a different perspective on how to consume. And overall, ⁓ 60 % of customers say they are actually interested in the sustainability ⁓ or e-commerce. And that’s a significant change in behaviors themselves.

Shelley E. Kohan (04:25)
Yeah, that’s tremendous. I know your survey, I your customer survey data. It was really awesome and excellent. It provided a lot of great points. And one of the things I was going to ask you, are you seeing this shift of consumer behavior in some categories more than other categories?

Romain Fouache (04:41)
Yeah, of course luxury as you mentioned is a big one. We are seeing it ⁓ in fashion. I the traditional models of e-commerce, I do think it is something that’s going to be expanding in less traditional industries. But for now, it’s fashion and luxury are clearly the ones that are taking the lead. But as it becomes more mainstream, we should expect that it takes place somewhere else. second hand is different type of business. For businesses, it’s a…

it’s not trivial to get into. When you sell first-hand, you have categories of products. If you sell a jacket in that size, all of them are exactly the same and you can sell them. When you sell second-hand, each item is its own category. They’re all different. They all have that little different wear, little different edge. So it can quickly become fairly complicated for companies to manage and to navigate such a change towards second-hand.

Shelley E. Kohan (05:38)
It’s very interesting. Well, first of all, I forgot to mention. So my jacket I’m wearing today is secondhand J Brand denim jacket, which I love. And I’ve never saw this anywhere. So I’m like, this is awesome because I wasn’t looking for secondhand or big value, but it’s a jacket I couldn’t have otherwise purchased because I don’t make it anymore. So there’s that. But when you look at these big brands, like you just mentioned, I know a lot of them are starting to do secondhand and resell, but I it’s so complex. Like how, how does a company take that?

Romain Fouache (05:47)
Nice.

Shelley E. Kohan (06:08)
And should they? Should brands be taking on secondhand?

Romain Fouache (06:12)
With the gross… So first, on your previous comment, I think that’s also an aspect of second hand, which is the amazing feeling you have to find a unique item that you know could not ever find again. I don’t think that’s the driving force behind the whole of second hand in itself, but it still is something that feels good. The thrifting aspect of it and looking at hundreds of thousands of things and…

not feel like you’re falling into fast fashion but on the contrary that you’re doing something sustainable but at the same time that makes you feel unique ⁓ while being at a good price I think is the good combination to explain to explain second hand but as to what you said yes for brands for companies it’s difficult it’s difficult because first it’s a force to be reckoned with I mean it is a completely different market and it does capture part of the market so we’re seeing more and more brands

trying to manage that second life of the products by themselves, but it is a logistical nightmare. At K &EO, we help companies manage product data, their product catalog. And just from the product catalog standpoint, it is an extremely complicated task for companies to be able to manage items that become unique items that are all extremely different from one another and to be able to do that.

And it still is just a fraction of the complexity of secondhand because typically the logistics aspect of it and collecting them and then sorting them and then putting them on sale and then selling them is in itself something that is completely ⁓ different from the traditional business. So yes, it is a significant opportunity. do think it’s also a

Something you cannot pretend doesn’t exist, so there is a component of risk that is attached to that firm’s brand, so that’s also why many of them are actually moving into the secondhand market, but there is a huge complexity that is ultimately fairly different from how most businesses actually operate.

Shelley E. Kohan (08:13)
Yeah, and wanna go back to something you said, which I thought, Romain, was really important, and that is that you said that instead of dealing with thousands of a unit, so when you make new products, you have thousands of them, you can do a product description, you can do product attributions for many, but I can’t imagine doing, especially now, product attributions now.

to even put stuff online is there’s like hundreds of thousands of product attributions to be able to have that item picked up, you know, with the various, you know, different, you know, websites and, uh, agentic commerce and all of that. So I can’t imagine for one piece, you’re going to do this, you know, 20,000 times. Like I just don’t know how it’s even doable.

Romain Fouache (09:02)
I mean, you mentioned some of the driving forces of shopping in the recent days. So you mentioned the price pressure. You mentioned e-commerce. AI is clearly one of the big things that is happening in our market these days, too. And I think AI is both a change in the market itself, agent e-commerce and the rest, but it’s also a change in the technology and how companies can actually go through what used to be very

work intensive type of activities and automate and facilitate them. So when they get into this type of e-commerce, we have quite a few customers at Ekenio that are actually managing ⁓ secondhand electronics ⁓ and secondhand apparel. AI plays a big role to be able to manage the complexity and the combinatorial of all of the articles they might be able to collect. And it starts from

being able to get data from the sellers themselves and actually be able to extract from that data the key descriptors of the products that they’re selling and then being able to enrich that because the seller themselves will only know a small part of what they’re selling. They’ll be able to take a few pictures to show the overall state to say what it’s about but then indeed leverage AI to enrich that information to make sure you have a complete

a story as possible because in e-commerce, maybe even more than on a traditional type of sale, the story is a key element for the decision making.

Shelley E. Kohan (10:40)
read in your survey that 72 % of consumers say that they’re looking for this strong supply chain transparency. if you couple or just just getting the product back logistically and just getting it on a website and just getting it out there, that’s complex enough. But how how are brands dealing with the transparency and supply chain for secondhand?

Romain Fouache (11:02)
Well, mean, it’s one level of logistics further. First, you need to be able to manage the transparency and origin of the things before they were first sold, and then add the second element. So you’re still one layer removed. So you’ve got all of the complexity of the standard type of sale where people want to know what they’re buying is coming from, plus this step. So ultimately, the same type of approach. You need to understand what is or what was the product. And we see many brands keeping

information about older products thinking that one day they might actually be able to or might need to reuse it and you know that’s one thing usually when you you you have a collection and your collection is over let’s just throw the data away who cares you know it’s done but with that tendency towards re-commerce towards having items being back to be sold there is a stronger intensive to have a treasure trove of product information where even old products you can know

what they were, where they were coming from, how they were done, so that you’re ready to be able to engage in a re-commerce type of activity if that need comes in the future.

Shelley E. Kohan (12:13)
So tell me, Romain, are there any companies that are really doing it right? Do you have examples or can you talk about, you know, who are the standouts that are really getting all of this right?

Romain Fouache (12:24)
⁓ I wouldn’t want to play favorites on any of them. My customers will probably not be that happy to do that. I think the ones that are doing it right are the ones that do two very important things. It’s one, how do they make it as easy as possible to gather the information from the seller itself? There are companies where when you want to sell something back, you’re going to have to go through…

five pages of forms where you need to add lots of information everywhere. mean, users drop out after a few seconds. The companies that do it well or great are the ones that allow people to register items with as little effort as possible. And it’s typically and ideally taking a picture of your item, then it will automatically recognize what it is, in what state, potentially even price it and help you move forward. Then the next element is

once you’ve collected the item, how do you actually reconnect that or the information on the item? How do you enrich that with further information on that piece of apparel or technology and the rest? And for that, you need to actually know your market. You need to actually know that these specific jackets, this is how it was described by the manufacturer when it was initially sold. This is where it was coming from so that you can, as I said, number one,

collect seamlessly information from the sellers so that the selling experience is easy and second enrich it as comprehensively as possible with the original information from these various products so that the buyer can then benefit from the best experience possible on the product that they are looking for.

Shelley E. Kohan (14:06)
Do you think that, so it’s really interesting. So you talked about the target market. would imagine that the target market, different, sustainability means different things to different target markets, right? So depending on the brand, sustainability could be environmental, or it could be ethical sourcing, or it could be something else. So I guess you have to understand that, brands must understand, right?

Romain Fouache (14:30)
Yes, you need to understand, it might even mean different things just for different people, even in the same market. I think that’s also one of the big elements with the rise of AI is that we used to work in a mode where you had maybe a few keywords and then one product page. Now, with conversational AI, with agent e-commerce, we’re evolving into a mode where we have an infinite number of potential intents.

everybody might want to buy for a different reason. Maybe you want to buy because it’s sourced from the right place, maybe I want to buy because it was ethical in the way it was manufactured. so companies now need to be able to capture intents regardless of where it’s coming from and from where it’s coming from. So I think thinking that just buy market is sufficient, it’s no, it has to be almost buy individual. And for that,

The only way to do it is how you’re able to capture as many signals as possible regarding your article. And yes, where it was sourced from, what type of material, what all of these things might be of interest, because maybe someone will say I want an ethically sourced jacket, or someone will say I want it that it’s in that specific hypoallergenic fiber that is grown in the forest of Latin America.

And it’s only if you actually have been able to collect all of these signals around your product that you’ll be able to capture all of these intents. So the evolution of the way people interact ⁓ with digital commerce is in my view creating a huge push towards having more accurate, comprehensive and trusted information on the product.

Shelley E. Kohan (16:12)
So I think what I heard you describe earlier is it’s almost as if you want the product to help with some of that history, the product itself, right? And if we’ve been properly attributing products from the day of production, which we haven’t been doing for 20 years, but maybe for the past 10 years, maybe five years, ⁓ then the product can speak for itself. Is that what you’re saying, essentially?

Romain Fouache (16:35)
There is some

of that indeed. Whatever we sell today will become a second hand product in the future and we might as well make it easier for ourselves by making sure that at least these we know well. And as you say, 10 years ago we were already, I’m not going to say good, but a bit better at getting information on the product. Yes, the things from 20 years ago, it’s going to be very difficult to get that information back. But we can help ourselves today by making sure that whatever we sell today is ready for…

the next life that is going to go through because yes,

our study shows that even as of this year, 44 % of customers have actually purchased secondhand. So we should assume that everything that can become a secondhand most likely will.

And that as distributors of brands, we need to be ready for the next stage of life of the products that are being sold.

Shelley E. Kohan (17:27)
That’s amazing. So if you had advice to give to brands to tell them, okay, if you’re thinking about re-commerce, here are the top three or four things that you need to be thinking about, what advice would you give them?

Romain Fouache (17:39)
Well, I do think that’s…

The trend of recommers is just a manifestation of the trend of people wanting to buy into something that is more the article in itself as we said. When people buy in recommers there is an element that is around pricing but today you can find anything at no price. You can just go on any fast fashion and buy things for half a dollar.

So price is not just an element. What you want is to feel that you have gotten something that potentially has its own history, that’s one. And second, has more value than the price you’re paying for. So it’s not just about paying a low price, it’s having an opportunity to have something that’s more valued than the price you’re paying for. And then it opens the question of what’s the value of a product that you buy? And there is potentially the functional value, but at its heart.

I’m deeply convinced that the purchasing decision is about the experience you feel with a product. And the more comprehensive it’s going to be, the more you’re going to be able to get people to feel value when they experience the product, and the more you’re actually able to sell them in that type of environment. So as you mentioned, yes, there’s the product description, there’s where it’s coming from, there’s the potentially sustainability element that may speak to some people, but maybe the specifics of how that specific product was being used or the activities it can be used for.

And so getting ready to actually enrich the experience you’re going to be offering on your product by making sure that you have a comprehensive view of your product from before it was manufactured to after it was being used is in my view almost the only way to be able to demonstrate that this product has more value than the price at which it’s being offered to as a secondhand type of object.

Shelley E. Kohan (19:34)
love that. And so that relates exactly back to my story. Now know you’re joining us from Paris, France, so thank you for joining us from far away. And I actually bought my re-used, gently used jacket in France. So, and I have to say everything that you just described about this, the value of the product being more.

than what I was looking for in price, I wouldn’t care what it was priced at because as soon as I saw it, I had this emotional attachment, one of a kind, I love this brand, I want this, and so you’re exactly right. So when you think about brands getting into the re-commerce space, you have to have a pretty solid acquisition story, right? How are you gonna procure or curate a resell that really is attractive to your target market, right?

Romain Fouache (20:00)
you

Yes, and how you’re going to be telling the story because from what I understand of what you said, actually had a… you were physically in store when you saw that jacket, so you can create a type of emotion when you’re in store, but a large part of that e-commerce is actually done online, so how do you recreate this type of feeling online? The only way you can do that is by having as clear and comprehensive information around that.

Shelley E. Kohan (20:32)
Yes.

Romain Fouache (20:50)
product and then having people experience it for whatever means you can so that they have some level of that connection. Because I I do believe that brick and mortar offer an experience that will never disappear. It will always be there. But yes, part of it is being captured by online websites. I’m deeply convinced that part of that is going to be captured by agent e-commerce. ⁓ But ultimately, we need to be ready to

make up for the limitations of each of these media. When you’re online, you don’t have the ability to touch the product, so how do you actually replicate for that experience? When you’re on an agent e-commerce or conversational AI environment, you don’t have the look and feel of your website anymore, you don’t have the specificity of your user experience, so how do you make up for that? And making up for that is just making sure that you can offer a view of your product that is more comprehensive, that is…

better ⁓ tailored than what others might be doing. I don’t believe in product slope. AI makes it very easy to generate content today. so yes, I can take a picture of your jacket and generate 50 pages of content on the jacket. But it’s just going to be lukewarm content because it’s the content that’s made up out of a very limited amount of information that is the picture. But if…

Shelley E. Kohan (21:59)
Yeah.

Romain Fouache (22:14)
you can actually find out who made the jacket, where it’s coming from, what was the material, how it’s been used by a famous singer on stage, what people are seeing of that jacket online and actually package the data in the right way, even when you don’t even have a website and you’re on agent e-commerce, you’re going to be able to offer an experience that might create that wants to buy. That emotion, that… ⁓

what’s the best way to describe it but that’s moments where you feel like yes this is what I want to buy this is what I want to have as my own

Shelley E. Kohan (22:55)
love that and one of the reasons I invited you on the podcast is because Akeneo is known for what we would call the new retail currency which is data and transparency. And so ⁓ what you just said is so perfect because you you have to create these brand stories. There’s too much product, there’s too much you can get at every single price level so you really have to create that story. So is there anything else that you would like to add before we end our conversation today?

Romain Fouache (23:23)
Now I just want to say thank you very much for that very insightful conversation. mean, we’re monitoring closely how consumer behaviors are changing towards transparency, towards sustainability, towards secondhand and pricing. And yes, it is quite challenging to be ready for it, but we’re definitely here to help all of these brands actually manage these changes.

Shelley E. Kohan (23:44)
That’s great. And I think our listeners can get your survey from the Akeneo website, right?

Romain Fouache (23:49)
Yes, the Akeneo

website actually has that survey available, so don’t hesitate to look at the consumer survey for first quarter of 26 that has just been released a few weeks back.

Shelley E. Kohan (24:00)
Thank you so much, Romain. Thanks for being here.

Romain Fouache (24:02)
Thank you very much, Shelley.

Shelley E. Kohan (00:01.512)
Hi everybody and thanks for joining our weekly podcast. I’m very excited to welcome back Dan Altman. Welcome back to the podcast Dan.

Dan (00:11.061)
Thank you so much. It’s great to be here again.

Shelley E. Kohan (00:13.932)
We’d love having you here. You are the author of the High Yield Economics newsletter, which by the way is free to subscribe to. So I encourage our listeners to do that. And you are chief economist by trade. The other thing I love about you is that you are a bestselling author and you actually have several books that have already been written and have sold well. And I believe you’re coming out with a new book this fall in November about the best decisions you’ll ever make.

An economist guide to saving time, making money and living well. And it’s kind of all about how to take this economic thinking into making better decisions in your everyday life, including purchasing, financing, et cetera. Do I have all my facts right there November 3rd?

Dan (01:00.999)
Absolutely right. That’s the publication date right now. This book is really going to unlock a lot of tools and frameworks for thinking about decisions that people can use in their everyday life. Just like you said, from things as simple as how much you should buy in bulk at a supermarket to some big decisions like how to sell your house and get the best price.

Shelley E. Kohan (01:20.47)
So what we’ve been through the past two years, the consumers, I know all the rising inflation, all the stressful things going on with tariffs, which we’re going to talk about today. I think the book time is absolutely perfect. And I wanted to let you know, I have already pre-ordered mine on the Kindle version. So thank you.

Dan (01:38.751)
Thank you, that’s fantastic. You might be our first order. So appreciate that very much.

Shelley E. Kohan (01:42.126)
Absolutely. Okay, so today we’re talking about hot off the press news. like we could do the podcast every day this week, and you probably have some new information. just the story is just evolving and changing. So I want to talk to you and get your insights about the Supreme Court reversal of the tariffs that went into effect. What does that mean for retail? What should we be thinking and looking about? So I know it’s a huge topic, but I’m gonna let you kind of jump into it.

Dan (02:12.541)
Yeah, so a lot of the tariffs that the current administration imposed were under something called the IEPA, the International Economic Emergency Powers Act, which gave the president the power to impose, he thought, certain rules on international trade if there was an economic emergency going on.

and the administration termed our current situation with a fairly large trade deficit to be an emergency and imposed these tariffs. Problem was there was no mention of tariffs in the act. So Congress didn’t really give the president authority to do that. That’s what the Supreme Court has decided. So what this means is all those tariffs that were imposed, many of them anyway, because not all of them were under the same authority, but many of them that were imposed starting back in April were declared illegal.

And a lot of companies are now thinking about suing to get their money back. FedEx is a big one that’s already done it.

And so the question is, will they be able to get their money back and what happens next? Well, we already have some idea of what’s going to happen next because the president has promised to replace the IEPA authority tariffs with new tariffs, especially under Section 122. But that has some big problems attached to it, too. So there’s certainly a lot of uncertainty remaining for businesses. And we really don’t know how businesses and consumers are going to come out of this because there are lot of questions about where that tariff revenue is going to go.

Also, what’s going to happen to prices?

Shelley E. Kohan (03:39.81)
Yeah, it’s really interesting because last the number I heard, and this could have changed in the past 24 hours, is that there’s $175 billion that’s waiting to be reversed out and given back to all the companies that paid them out. But, you know, when I look at this, you know, I come from retail operations. I just don’t know how logistically they’re going to go through all the data and information to actually hand out checks to retailers who pay tariffs.

Dan (04:09.373)
It’s a huge question. I think it is doable.

I think at the very least, companies have records of the money that they paid. The government should also have records and those should be attached to specific orders and specific shipments. So it can be sorted out. It is a bit of a mess, but we have to uphold the law. And we’ve seen this sort of thing happen before. I wrote a post on LinkedIn that referenced the Madoff case, the Ponzi scheme by Bernie Madoff, which actually made a lot of money for quite a few people. And they had to give that money back because it was illegitimately gained.

Shelley E. Kohan (04:32.611)
Wow.

Dan (04:42.225)
So we have experience in sort of clawing back money that wasn’t supposed to go to where it went and giving it back to the people who originally were supposed to have it. But this is the government. This is the federal government. And this is a whole other kettle of fish. It’s just a sort of thing that you need to do sometimes if you’re going to uphold the law.

Shelley E. Kohan (05:01.28)
And so you mentioned, and I know it’s very interesting, and if I’m a consumer sitting here thinking all these prices went up because of terror, so I paid all these high prices, but they are illegal, so how am I, the consumer, going to get my money back? What’s your thoughts on consumers actually seeing a refund of some sort?

Dan (05:19.251)
I wouldn’t get my hopes up, to be quite honest. Companies that paid the tariffs, since they’re the actual ones who did the importing, they could get that money back. Are they then going to rebate that money to consumers somehow? That would be much harder because it’s much harder to trace those purchases to specific people. And it’s not something I think most companies are inclined to do anyway, if you don’t mind me saying. And so then the question becomes, well, what happens to prices? Are they going to go down?

because the tariffs are no longer in place. Well, we don’t know if new tariffs are coming or not. And companies are much better at raising prices than they are lowering prices, generally speaking. So I think really the consumer is the one left holding the bag here because companies may be able to get their money back, but consumers probably will never see those dollars that they paid under the auspices of tariffs.

Shelley E. Kohan (06:07.308)
Yeah, it’s interesting. So just from a retail perspective, so once you have a cost of goods, so cost of good is what it costs to manufacture, produce, make, logistically send that product, crosses the border, that cost of good never changes. It doesn’t go down, right? It costs what it costs at that time. So what I’m hopeful of is if you kind of fast forward that into future products, if those costs comes down, would consumers benefit by maybe lower costs in the future? But like you said,

The other caveat is more tariffs might then increase those costs too.

Dan (06:43.807)
Yeah, I think just the way a lot of companies waited to raise prices until they were sure the tariffs were actually going to be a thing, we’re going to see companies maybe waiting before they decide that tariffs aren’t going to be a thing as well. We see this administration swearing up and down that they’re going to apply tariffs in other ways. And the president even thinking that tariffs could someday replace the income tax, which is absolutely impossible for reasons that I need not get into now. But there’s no way or nothing.

Shelley E. Kohan (07:12.075)
another podcast.

Dan (07:13.275)
Yeah, there’s nowhere enough revenue from tariffs to do that. There’s not even enough revenue from the tariffs that they did impose to close the hole in the budget that was opened by the One Big Beautiful Bill Act. it’s not that much money as far as the overall fiscal picture is concerned. But going back to the original point, I think companies will wait to see whether new tariffs are in place. not going to lower prices on the assumption that

New tariffs are not there. And even if the tariffs are smaller or there are fewer tariffs, I think what they’ll probably do is not

lower prices, but just wait longer to raise prices again. So we might see prices flat for a long time. This is what economists call nominal rigidity, saying it’s actually hard to change prices a lot because it costs money to change prices on everything, change your pricing structure. It takes effort. And so they’d rather let sleeping dogs lie, as it were, and they’ll just sort of wait for their costs to catch up to the prices.

Shelley E. Kohan (08:11.234)
So it’s really the consumer, like you said, that’s really paying for all of this and really not seeing anything not from the past. And it sounds like may not see anything in the future either as a benefit.

Dan (08:22.079)
That’s absolutely right. What has essentially happened here, if you look at the bottom line, is companies raise prices so that they would be able to pay the tariffs. Now they’re getting the money that they paid as tariffs back and they’re just left with much higher margins as a result. So it was basically a way for the government to help companies gouge the consumer. If you look at it like that, I mean, that’s a very nasty way of looking at it. But that would have been another way to achieve the same outcome that we’ve seen right now.

And so great for companies in a way it’s going to cost them some money probably to get that tariff revenue back. But not great for the consumer. It doesn’t do anything to help us with interest rates either because that big hole in the budget is still there. We’ve done nothing to control the national debt. And so long term interest rates are going to stay high. It’s really not great for the consumer overall.

Shelley E. Kohan (09:15.702)
Yeah. So let me ask you a question. So, and I don’t know if you know, you probably don’t know all the details of it, but I bet you have an opinion on this. So the Trump Organization negotiated a bunch of trade agreements to offset higher tariffs with some countries. So like the UK, for example, they made this side deal with them on tariffs. What happens to all those deals?

Dan (09:38.259)
A lot of those deals are not worth the paper they were printed on at this point, if they were even printed on paper and not just an envelope or a napkin or something. Some of them were thrown together pretty quickly. But yeah, a lot of those deals are now invalid because they were based on a tariff schedule that no longer exists. And so they will have to be renegotiated. What is kind of bizarre is that actually some of our close to economic allies are now paying higher tariffs.

after this ruling relative to some other countries with which we compete a little more aggressively. And so, you know, it’s another good day to be a Japanese or a Korean carmaker, not so much if you’re a UK or Australian exporter.

Shelley E. Kohan (10:06.445)
Right.

Shelley E. Kohan (10:21.978)
yeah, this is becoming so complex and I’m not sure, do you think we’re gonna see the light of all this mess in the next few months or is this something we’re gonna be kind of untangling for the rest of the year?

Dan (10:37.715)
I think it’s to take time, as I recently posted also on LinkedIn, if you’re an executive in the White House and you are trying to keep a continual schedule of tariffs that have not been legislated in place, then you’re essentially playing a game of whack-a-mole. know, all of these extra authorities that you try and find to justify your tariffs are temporary or have some sort of finish line. And so

When one expires, you have to put another one in place right away if you want to maintain these tariffs. This Supreme Court ruling is just kind of an example of what we’re likely to see over the next six months to a year as the administration tries to cobble together a new tariff regime. And again, know, Congress is the one that’s supposed to be doing tariffs. Tariffs are a tax. It says in the Constitution, Congress has responsibility for taxes. But this White House insists that it’s going to go it alone.

And as a result of that, we’re facing a lot more policy uncertainty. And this has really been the problem for the last eight months or so. We have seen the economy in a sort of paralysis, both in the job market and in investment plans, because people didn’t know where these economic policies were going to land. We thought things had sort of been settled by the end of the year and the economy was really poised to grow. But now we’ve opened up all this uncertainty again.

Shelley E. Kohan (11:59.658)
It’s quite amazing and I what’s happening with the stock market based on all these things are you saying kind of a ripple effect go into the markets.

Dan (12:09.255)
It’s kind of hard to say right now, much of the gains in the stock market over the past year or so were driven by these AI and tech related stocks, which

came to represent a hugely outsized portion of the major stock indexes. So if you see numbers from the S &P 500 or something like that, you got to realize that a quarter to a third of that index may be based on a small number of companies that are really being driven by this AI and data center wave. But if we look at broader indices, yeah, I think there is a disappointment here, which you’re going to see reflected in the markets because

companies were poised to start making those hiring and investment decisions now that the policy environment had settled down and there was some hope that long term interest rates would come down as well. But that has all been blown out of the water. And it’s basically because this administration will not accept the Supreme Court ruling and is insisting on continuing in this direction of using tariffs to raise revenue when it’s really not the executive’s job.

Shelley E. Kohan (13:11.032)
think the other thing that’s really happening specific to retail, it’s the industry I know the best, so it might apply to other industries, but from a retailing perspective, a lot of the retailers, since the pandemic, they’ve worked really hard on supply chain. They’ve really tried to protect themselves and become more agile and have this kind of ecosystems of supply chain. So you fast forward four years, five years, and now…

The retailers had to really deal with the tariffs and that even made them even more create more agility in the supply chain and be able to, you know, change their production facilities, change their sourcing, change logistics. And so they’ve become very good at just all this destruction that’s happening in an industry and a part of the industry supply chain that was not really super disruptive, but now I think they’ve become quite agile and

they’re being able to redo their supply chains and where they’re having things sourced and that type of thing. But I guess my big question is in that process of redoing this huge ecosystem, which quite frankly is not easy, it’s complex, it takes time. Do you think we’re going to be looking at giving other countries better, are they gonna become bigger trade partners as a result of this?

Dan (14:31.093)
That’s a great question. I agree with you that we’ve seen a lot of moves in the direction of greater agility.

That has taken some effort and it has been costly to do a lot of that reorientation. I think if you rewound five, six years and said, hey, would you rather none of this happened and you could keep on going with your supply chain as it was, a lot of companies would say, yes, that would save me a lot of time, money and headaches. But we are where we are and we do probably have more agile supply chains now and hopefully that’s an asset for the future. If we now ask which countries are going to be the beneficiaries of these changes,

It’s hard to say because all these trade deals are going to need to be renegotiated. And there’s sort of an arms race dynamic where if one country gets some deal first, then another country wants a similar deal. It may not shake out the same way as it did towards the end of last year. We’re going to see a whole new set of deals, which are what economists would call path dependent. It matters what order you actually negotiate these deals in. So we don’t know which countries are going to be the beneficiaries. Looking back,

We would have thought, OK, well, if the tariffs on China are very high, then maybe Vietnam is a substitute. And if that’s a lower tariff environment, then companies will shift imports from China to Vietnam. We could see similar things happening with India, Pakistan, Bangladesh, maybe. If India is under high tariffs and sanctions because they’re importing Russian oil, then maybe some of those other markets are getting some of that production. We did start to see some shifts.

And I think that the agility that you mentioned is going to help companies to do more of that in the future. But we just don’t know which are going to be the low tariff regimes right now.

Shelley E. Kohan (16:15.982)
That’s so interesting. one of my, always do like my five top retail trends every year. And one of them is that the new hottest job in retail is gonna be a geopolitical officer. Just to navigate everything you just talked about is so complex and it really requires a different way of thinking that retailers really have to look at differently how they’re managing all this, you know, political and tariff and trades. And so what advice do you have for retailers? I mean,

You know, we’re typically not really politically motivated. kind of, you know, we have our industry, we want to sell products, we want to make consumer lives better. But now I just feel like, you know, we’re kind of in this big mess and we’re being kind of taken to task to deal with everything that’s happening in this, you know, very difficult political landscape. So what advice do you have for retailers and brands?

Dan (17:12.639)
Well, you have to stay on top of the news, but you also have to take the news with a grain of salt. We know that this president and this administration can be fairly capricious.

For example, there was a political ad that ran only in Canada to which the president took umbrage and swore that he would impose a higher tariff on Canadian imports just because of that ad. The ad was withdrawn. I don’t know if the threat was ever serious, but something like that would definitely make your ears perk up and say, oh my, are we going to face a much higher tariff for Canada? And then in the end, it amounted to nothing. So you have to pay attention to what’s going on, but also take it with a grain of salt and wait to see what actually happens.

also know that the president is susceptible to certain forms of influence and companies that cozy up to him tend to get better deals and tend to have their interests protected. So if you’re a big enough company, then I guess it makes sense to do something like that if you really are putting your business above all. But if you’re not such a big company that’s going to get the ear of the White House and you’re sort of just trying to ride these waves, then you just have to be alert and you have to make sure that you have realistic expectations about how everything’s

going to shake out. If you want to hire a geopolitical consultant or a geo-economic consultant, it’s probably not a bad idea. Maybe I should hang out my own shingle for that.

Shelley E. Kohan (18:30.59)
You should definitely do that, Dan. You’d be great at that. But I think you said something really important. think, you know, unfortunately, I think it’s the small businesses and the mid-sized businesses that really are going to feel the crux of all this, everything that’s been happening.

Dan (18:45.779)
Yeah, I think that’s right. And they’re some of the ones that have the hardest time reorienting their supply chains, right, because they don’t necessarily have a huge research network that’s already identified the options that they might have in other countries. And they might not be big enough where they could just come in with a huge order that would immediately have producers jumping in different countries. They wouldn’t necessarily even have the middlemen, the intermediaries who would help them, middlemen and women,

to do business in those countries, they would have to line up the lawyers, accountants, whatever they needed. It’s not that easy for a small business, especially when those pathways haven’t already been established by some of the bigger players. So I really feel for them. And I think they’ve had a very difficult past 12 months, and it’s probably going to be pretty tough these next 12 months, too.

Shelley E. Kohan (19:35.88)
And they don’t they just don’t have the capabilities in-house and they don’t have the resources, know time money and manpower to fix a lot of the things that they would need to fix to try to overcome a lot of the terrorist ping-pong that’s happening

Dan (19:52.233)
Yeah, and some people say, well, OK, well, they should just buy more domestically produced goods then they should import less. And when that’s possible, tends to mean higher prices and they’ll have to pass those prices on to the consumer. They’re going to have to charge higher prices anyway because even the reorientation of the supply chain is costly. You know, the reason you’re doing it is because you

are facing a much higher tariff in one country. But the reason that you didn’t import from the second country in the first place was the prices were higher. So, you know, they are going to the second best option in many cases, and that means prices are going to have to go up.

Shelley E. Kohan (20:31.15)
Dan, do you have any closing thoughts you’d like to share?

Dan (20:35.881)
Well, I just have a hope that the policy uncertainty will finally settle down. As I said, I think the economy was really poised to grow this year. We were starting to see signs that the labor market was beginning to loosen up, which is the best possible news for the consumer. But it’s really now frozen again. And I hope that we can escape this situation in the next several months.

Shelley E. Kohan (21:00.46)
Well, thank you so much for coming on the Retail Unwrapped today. It’s great to have you. I hope you’ll come back and I’m really looking forward to your book.

Dan (21:09.407)
Thank you so much, and I hope next time we’ll have better news to discuss.

Shelley E. Kohan (21:13.344)
me too. Thank you, Dan.

Dan (21:16.201)
Take care.

Shelley E. Kohan (00:01.614)
Hi everybody, welcome to Retail Unwrapped. I am so excited to have Rachel Williamson with me. Hey Rachel.

Rachel Williamson (00:10.134)
Hi, Shelly. Hi, everybody out there watching and listening.

Shelley E. Kohan (00:14.254)
I love it. So Rachel, you are CEO and founder of Running Great Stores, which we’re going to get into kind of your passion there. And you just recently launched a new book. So congratulations on that.

Rachel Williamson (00:20.918)
That’s right.

Rachel Williamson (00:30.742)
Thank you so much. It’ll be out February 24th wherever books are sold. So exciting.

Shelley E. Kohan (00:34.22)
Yay! And of course the name of it is Running Great Stores.

Rachel Williamson (00:39.648)
That’s right, 30 Days to Running Great Stores. it is, you know, I think it’s a book that is gonna help frontline workers, whether you want to be a manager or you already are a manager. So I’m excited at how many retail organizations out there are, you know, gonna really benefit from giving this book to folks that work in the front lines. So I’m excited to get it out there.

Shelley E. Kohan (01:03.15)
love that. And what I love about your background is like me, you’ve served your whole career serving the industry, which is amazing. You’re a strategic retail leader. You do a lot of consulting work. You also have, you have a well-known area about you, which is you are excellent at turning around underperforming stores or divisions or teams.

which is fantastic. And I did get a sneak peek at your book and I love a lot of the content that’s in your book in terms of I wish I had it, know, okay, 30 years ago when I started in the business, it’s a little more than 30, but we won’t go there. But you also have a lot of experience because you actually worked in the industry, you worked for Coach, Asina and some other multi-billion dollar companies and all the consulting work that you do, which is great.

Rachel Williamson (01:42.006)
Yeah

Shelley E. Kohan (01:55.124)
And I love your motto, which is retail is hard, but leadership doesn’t have to be. And I think the book coming out this year is really a great timing because our leaders in our industry are, I believe, been very challenged over the past few years, really since COVID. So your book is really to help every leader who wants to build better teams. But before we… go ahead.

Rachel Williamson (02:19.234)
Absolutely. No, I say absolutely. completely agree. You know, when I wrote this book and I was…

showing it to publishers and I was like, you know, I just wish someone had given this to me when I started because it would have saved years of heartache. Fortunately, I’ve had wonderful bosses and mentors over the years that also helped me shape. you know, I mentioned some of them in this book, but it’s, the impact that we have on the people that we work with does live on. And so, you know, a big thank you to all of those leaders that I had working

in retail that helped me get to this point. And now this is just that opportunity to give back and do it in a way that is so digestible and so easy to read and implement.

Shelley E. Kohan (03:07.629)
I think it was, it’s a very easy read. I agree. And I don’t even laugh when I tell you the management book that I read when I was young, Getting into the Industry. And it’s an iconic book, but you know, yours is so much more elevated. I remember One Minute Manager. I mean, that was my go-to book.

Rachel Williamson (03:24.281)
yes! Yes! You know what’s funny is-

Shelley E. Kohan (03:27.743)
And it was awesome.

Rachel Williamson (03:29.436)
Shelly, when I was a new manager, I actually bought that book. I was at the Gap and it was my big leap from working for small, I’ll call mom and pop, retail brands to making that leap into the Gap. I talk about, there’s a story that I share in the book about how I made that leap. But I remember buying the One Minute Manager for all of my managers. And I asked them to read it and of course it was a quick read as you remember. And we huddled in like a little breakfast

Shelley E. Kohan (03:57.111)
Ha ha.

Rachel Williamson (03:59.492)
meeting and talked about what we learned, but more importantly, we talked about how we would apply what we learned into what we were doing and what our goals were. And I think that’s the key. It is so good to read books, but if we don’t apply what we learned, it doesn’t really do a whole lot of good, right? And so one of my reasons for making this book as digestible as it is was take one topic, read about it, and then go apply what you learned.

and then come back the next day and do another topic. Don’t speed read through the book. Just do a day at a time for 30 days. It’s short enough to hold our attention span, but long enough to build that muscle memory. So…

Shelley E. Kohan (04:29.517)
Exactly.

Shelley E. Kohan (04:43.091)
No, that’s great. And before we jump into the con some content that we’re going to talk about, I hope you’re going to share some of your stories as we talk today, because I love I love hearing your stories and your Rachel isms that you have. But before we jump in, I’m going to share a little fun fact with you. You and my husband started at the same job. My husband scooped ice cream at Basket Robin. He did.

Rachel Williamson (04:50.408)
I will, I will.

Yes.

Okay.

Rachel Williamson (05:06.817)
He did? Oh my goodness. And what city and state was he doing that in? Which Baskin-Robbins was he? In Philly, okay. Yeah, I was in Columbus, Ohio and I rode my bike two blocks up to the Hearts and Big Bear Plaza, as they used to call strip centers, know, plazas. And yeah, I was 14 and that…

Shelley E. Kohan (05:13.613)
Phili- Philly. Philadelphia. Yeah, Philly, yeah.

Shelley E. Kohan (05:28.441)
yeah!

Rachel Williamson (05:31.554)
Yeah, I think there’s probably some jobs you can still get at 14, but it’s mainly like delivering papers or babysitting. But back then, you could work in food, surprisingly.

and it was just the best. It was just the best job. But I talk about, obviously, as you know, in the introduction, I talk about that experience, which is kind of funny. I shared a pre-read of the book with some of my colleagues, and one of them called me and said, you had me at hopping on the counter and sliding out the flavors and going and telling the owner at 14 years old, all the things that were opportunistic.

that customers were upset about what we could do different. so I think that’s really where my obsession with retail began.

Shelley E. Kohan (06:20.533)
It’s great. I mean, I love this story because that’s where a lot of us really started in the industry. So one of the big kind of key topics is you talk about empowering store leaders with practical tools and clear processes. And I don’t think there hasn’t been another time in our retail industry where that has not been one of the most important things that we can do today. Our retail environment is so complex right now. We have

the Gen Alpha kids that are coming into the workforce, these are the COVID kids. And they may be lacking some of these key leadership imperatives. And then we also have to learn how to manage the Gen Alpha, the Gen Zs, the millennials and the boomers because there’s like five generations in the workforce. So tell me a little bit about your idea about this having practical tools and clear processes.

Rachel Williamson (07:13.557)
Yeah, I mean, I really wrote this book not thinking about generations, but thinking about easy to apply proven, not theory, proven methodology on how to win at retail. And frankly, it will apply to any generation if, and here’s my first Rachelism in the book.

What I believe drives how I behave and how I behave drives my results. So as leaders in retail, it isn’t just about barking orders, about telling somebody what to do. Our mission.

is to understand what people believe to be true about what we’re there in that store to deliver. And once I understand what you believe to be true about retail and the customer experience and what we’re really here to do, I can then influence your thinking. And that’s really my job as your leader is to influence the way you’re thinking about what we’re there to do. If I just tell you, look, we have to have a good customer experience. You need to wait on everybody who walks in. What am I going to get? Okay.

But then what will that really look like? And so that’s really where I get into in the book, the different components. And it really starts with, you know, who you are just looking in the mirror. And we’ll get into that here in a little bit. But, you know, we really see…

all of the disruptions that retail has had over the past six years. In 2020, we had COVID, which was something we had never really seen or could have predicted the impact.

Rachel Williamson (08:55.635)
And then when we got a new president in office, the tariffs and retailers margins became a really big impact. you and I have been in retail long enough. We know one of the things that you can count on is that there are disruptions in retail. So I put together, this is not in the book.

but I do think it’s really interesting. So before we went from COVID to…

know, margin and tariff implications. Retailers were dealing with this post-COVID phenomenon called working from home. And while retailers, retail store leaders had to be in stores, there was a lot of bitterness around all my colleagues get to work from home and be in sweatpants and what have you. And it almost became, gosh, this is just our normal.

Shelley E. Kohan (09:35.558)
yes!

Rachel Williamson (09:49.665)
And so we’ve got some, you know, Jen Alpha to go back to your perspective that I was recently mentoring a young woman who said, well, my goal is to work from home. I’m like, OK, well, first, that’s not a goal and that’s not a thing. We get up, we dress up, we show up for work. Going to work in general is about getting up and going somewhere. And if that’s what you’re telling people who are interviewing you, why are you not getting the job? So, you know, and sometimes we just have to be super honest, right?

But before COVID, in 2016,

with Trump’s first presidency, tariffs reared their ugly head. I remember I was at Justice then and we were talking about price points and what was that impact going to look like for moms who were used to buying their daughter clothes at Justice and now the prices are so much higher. In 2015, if we just keep dialing back, do you remember how influencers came on the scene and now they’re so common? But

They were changing the way customers shopped. You could now shop a live sale on Instagram or on Facebook and now even on TikTok.

Shelley E. Kohan (10:56.983)
Absolutely.

Rachel Williamson (11:01.504)
In 2010, in that era, it was all about fast fashion. And if retailers couldn’t keep up with Zara and H &M and Forever 21 and get goods out, that was causing problems. I mean, in the early 2000s, Amazon was ramping up and they were changing the expectation around what customers could get and how you could get it on your front door so much faster. And even in the 90s, and this is as far back as all good,

Shelley E. Kohan (11:07.168)
and

Rachel Williamson (11:31.631)
because, you know, I’m going to really date myself here. But in the 90s, there was this whole, you know, these big chains. Walmart came on the scene in a bigger way. Target, Home Depot, Best Buy, they were dominating categories. And department stores couldn’t keep up. They couldn’t give the margin break. They couldn’t have the depth of assortment. And so my point in sharing this is, and we could go back further, clearly,

decade has had disruptions for retailers and here’s what I’ll say there are more coming we just don’t know what they’re gonna be but there are more coming and so one of the things that I that drove me I think to write this book is there are things we can control and there are things we can’t control

And we can control the way our stores operate. We can control the operational excellence. We can control the talent that we hire. We can control the experience that we deliver. Those are all things that retailers own and can control. there’s so many missed opportunities in how retailers are delivering that. And so, you know, when business gets tough, what happens? Training gets cut.

And so now you have store managers being hired and they’re going through a quick little training and retailers assume that’s all they need. And what happens from store to store? The experience varies from district to district, what have you. And so this book, buy the book, read a copy of the book, implement the book, and you’re going to be able to deliver more consistent experiences, find better talent, drive better customer experience because you’re not

Shelley E. Kohan (12:45.965)
now.

Rachel Williamson (13:15.83)
relying on someone else at your organization giving you information that maybe there’s no longer a training department, you now can grab that kind of the bull by the horns and own it and and deliver the.

Shelley E. Kohan (13:28.715)
Yeah.

Rachel Williamson (13:32.017)
expectations, the experiences that customers have. mean, customers have are so empowered. They can look on their smartphone and they can see what that item costs everywhere else. But you know, when the day is done, there are things that are also bigger than cost. That’s what we call value, right? Value isn’t just price. Value is the experience that I get when I go into that store.

Shelley E. Kohan (13:49.965)
That’s right.

Rachel Williamson (13:54.845)
And there are retail brands that I love. I go into the store and they know me by name and maybe that’s AI. Maybe they know me because some AI tool is helping, but it’s they still know me and they welcome me when I come in and they offer me a water and they know what I like and and each of those store managers that are delivering that experience.

They may be getting that from their company and they may be getting it from something else. And this book is one of those something else’s that retailers will be able to use, which I’m excited about.

Shelley E. Kohan (14:25.387)
Yeah, I love that. So two quick things. So one is, so as you kind of went back in history, and I won’t go back in history, but I just want you to think about this. The consumer, as in all those decades, also changed. And so that really is either us, and usually it’s retailers trying to chase the consumers and their behavioral changes versus the other way around. So I do believe that there is this super empowered consumer. And I think the other thing that you said that’s really important, very difficult to deliver,

Rachel Williamson (14:31.966)
haha

Rachel Williamson (14:37.888)
That’s right.

Rachel Williamson (14:46.762)
That’s right.

Shelley E. Kohan (14:54.941)
is this customer service that is, as you say, stellar, but it has to be consistent. One of the biggest challenges in physical retail is inconsistency by location by store. So talk to me a little bit about this super empowered shopper and how can you deliver this experience consistently day after day?

Rachel Williamson (15:01.792)
That’s right.

Rachel Williamson (15:07.732)
That’s right.

Rachel Williamson (15:18.132)
Yeah, I mean, think to be honest, many retailers still view customer service as the set of niceties.

and rather than core daily work that actually motivates people to buy and fosters that loyalty. Loyalty doesn’t come because you’ve implemented some great piece of technology that’s a CRM or what have you. Loyalty comes one customer at a time, one engagement at a time. The biggest missteps that I see retailers taking is an over-reliance on systems instead of that real human connection. And we assume when we hire someone who’s got retail experience,

experience and what have you that they’re going to already be great at it. They may not be. We delve into that in the book.

Stores are investing in technology and in automated signage and in incentives, but the customer experience is delivered, like I said, one interaction at a time. And if associates aren’t tuned in, the best promotion, the best sale on the planet, the best technology implemented in that store is not going to create a meaningful experience or drive customer loyalty or repeat customers. Number two, ignoring the store associates emotional and mental state.

I feel like customer service suffers when the staff feels unclear or uncared for or unsure of what success really looks like. You know, there’s a recent Gallup poll out

Shelley E. Kohan (16:40.555)
Mm-hmm.

Rachel Williamson (16:47.525)
that it’s kind of a scary number. It says only about 46 % of employees know what’s expected of them and only 39 % feel like someone even cares about them as a person. And that gap directly undercuts how they’re treating customers on the sales floor. And then

Shelley E. Kohan (17:08.278)
Absolutely.

Rachel Williamson (17:09.139)
think the third misstep that I see is just thinking of service as a one-off instead of a habit. And too often, I mentioned this earlier, retailers train once and then they think we’re good to go. But it isn’t really that. It’s got to be this daily behavior of noticing, listening, responding, right to what they see associates doing. I was recently in a store and their district manager was visiting and I always love to watch that interaction between the district manager and the store.

Shelley E. Kohan (17:36.83)
Hahaha!

Rachel Williamson (17:39.026)
And the district manager started filling online orders.

There was no engagement around their sales, where they are, how much more they need to make their month. There was no conversation around the sales team, you know, do you have openings, who’s doing well, who needs some help? Not judging, maybe they did that at some other time. But I was in there for quite some time. I bought a few things from them and so I was in there and was able to, and just never heard or saw anything.

Shelley E. Kohan (17:55.81)
Hmm.

Shelley E. Kohan (18:10.839)
Hmm.

Rachel Williamson (18:12.197)
So I was in there a day later, I had to exchange a size on something and I asked the store manager and she said, she’s like just extra set of hands. She fills orders, she cleans the back room. Now, again, culturally that might be where this brand is. But what I would encourage district managers, regional managers to think about is how do we leverage our experience when we walk into stores and how do we help our store managers be that

much better at what they’re doing, be that much better at delivering the experience when we leave than they were before we got there. And this is just an opportunity. If I was talking to the CEO of this particular retail brand, I would encourage them there’s a better way to leverage district managers. You can bring in minimum wage employees to fill online orders. My guess is that district managers making quite a bit more per hour than should be filling an online order. But again, you know, she thinks she’s being

very helpful to the store team and helping the store managers that they can be engaging customers. So, you know, this is a big opportunity. Probably the other big opportunity around the customer is just KPIs. And how do we talk about the behaviors that are driving the results, not just the results. you know, you go into a store and you hear the store manager say to a salesperson, we need to get conversion up. Now, go do it. Okay.

Shelley E. Kohan (19:15.094)
Mm-hmm.

Shelley E. Kohan (19:25.549)
Hmm

Shelley E. Kohan (19:40.909)
Rachel Williamson (19:41.874)
Well, the salesperson is probably saying, okay, turns around, walks away and is like, what does that mean? What should I be doing? And so instead, we can be saying, we need to get conversion up and let’s talk about how we’re gonna do it. What are your guys’ ideas? And when they look at you with a blank stare, what do you now know? You now know that they don’t know what it really means. And so then it’s like, well, let me share a couple ideas.

I know I just gave you tasks to do, but when someone walks in, drop those tasks and welcome the customer in.

share with them something that new that you’re excited about. Maybe this new item that you’re putting out, this cashmere sweater that comes in four colors and the blue would be beautiful on her because of her blue eyes. Like, you know, just helping them understand behaviorally what is going to drive those KPIs. And no matter what KPI you drive, not everybody uses conversion and traffic counters, but there are behaviors that drive no matter what the KPI is. And so focusing on those behaviors is huge. And often,

a miss.

Shelley E. Kohan (20:45.601)
Yeah, I want to go back to something you said, because I have to bring back in this generational thing, because I do think it’s it’s kind of an issue if you’re not paying attention to it. So let’s go back to the district manager that goes and immediately starts taking care of orders. So that district manager and I’m not saying this is in her case, I’m just saying hypothetically, you know, when you look at the Gen Z’s and you look at the Gen Alphas.

Their comfort level is probably more attuned to knocking out operational tasks, that’s their comfort level, as opposed to actually being comfortable with the leading and leadership skills.

Rachel Williamson (21:29.235)
Yeah, mean, it depends. I wouldn’t necessarily label generationally. So I have a Gen Z daughter. So she definitely keeps me honest on how Gen Z thinks about things. And she scolds me if I am labeling for sure. But I will say that…

It comes down to, I think, who you’re hiring to work in your store. You know, often store managers, and I talk to store managers all the time, and they often say, I just want to hire people with retail experience. Just makes it easier. They know what to expect. They won’t be surprised. But oftentimes we surpass, we overlook talent that maybe doesn’t have retail experience. And I talk about this in the book. You hire for attitude, you teach skill.

Shelley E. Kohan (22:12.781)
Absolutely.

Rachel Williamson (22:19.457)
if I find someone that is bubbly and vivacious and outgoing, they’re in their sorority or their fraternity in college and they’ve got really great skills, I can teach them how to sell my product all day long and twice on Sunday. And so, I think it’s important to understand what the expectations are. And then when you’re engaging potential employees to be talking about that, like what do you love to do and what do you hate to do? And if they say,

Shelley E. Kohan (22:19.499)
Yep.

Rachel Williamson (22:49.597)
I hate like one-on-one making eye contact. It’s like all right. I need stock people I need people to help with floor set you might be a better fit But I’m never gonna put you on my sales floor as a greeter because you’re gonna be more comfortable looking at your phone And I you know I used to joke with my daughter if our relationship could just be about texting back and forth It would always be fabulous, but because I need to talk to you. I need to see the whites of your eyes Sometimes you just don’t want to

Shelley E. Kohan (22:57.953)
That’s right. Yeah.

Rachel Williamson (23:19.419)
And that is a real thing.

I think the other thing, my daughter was raised, I we weren’t, I wasn’t raised in this, but my daughter was raised in a, everyone gets a trophy environment. So yeah, it’s like, you know, she played on soccer teams and, know, always tried all different sports, ultimately did horseback riding and tennis, but you know, played all different sports and everybody had to get an award at the end. It’s like, you didn’t even win. What do you get in an award? I mean, for showing up. And so I do.

Shelley E. Kohan (23:31.86)
yeah, don’t even go there.

Rachel Williamson (23:52.523)
think that we’re dealing with some of those complexities where people get hired and they want to get promoted fast, like really fast. And so I think it’s just being aware of the generation that you’re hiring and being knowledgeable about what it is they need, what it is they want. I love just talking to people about it. It’s like, won’t, you I don’t want people to think I’m labeling them. So it’s like, you tell me, what are your expectations when you start working in my store? What is it?

Shelley E. Kohan (24:13.216)
Right, right.

Rachel Williamson (24:22.456)
that you expect. When do you think you’ll go from being a key holder to being an assistant manager? Like what’s going on in your mind? And it goes back to what I believe drives how I behave and how I behave drives my results. If I understand what you believe to be true, I’m going to be much more effective in working with you and setting clear expectations around reality and what’s really going to happen.

Shelley E. Kohan (24:47.597)
think Rachel, the other thing that’s really important that you kind of hinted to is you really try to understand where they’re coming from. And so you can’t motivate people unless you know where they’re coming from. And so that’s an important step. But let’s talk about culture for a second, because I’ve always said culture takes years to build and seconds to collapse. So how do you build a winning culture? How do you make it a winning culture? And I know you’ve done this

a hundred thousand times, but tell us about that.

Rachel Williamson (25:20.114)
You know, it’s such an interesting…

quote that you that you said where it’s years to build and seconds to collapse and maybe you made that up or I’ve heard it somewhere before but you are 200 % right and I think what happens oftentimes and I’ll stay with retail stores for a moment I think what often happens is retailer retail frontline workers believe that culture is their company and what their company is created so what their HR team works to create and they’re

Shelley E. Kohan (25:50.349)
That’s right.

Rachel Williamson (25:51.561)
wrong. There is a component of culture that is that. But I would argue that a district manager creates the culture of their district. What is important?

Shelley E. Kohan (26:02.317)
That’s correct.

Rachel Williamson (26:04.026)
what they value, what their priorities are. And likewise, a store manager creates a culture within the building that she or he are leading. And so I think that we can’t just say, well, the retailer has created the culture and the culture here is good or the culture here isn’t good because of that. I think…

Those of us that are running stores need to say, how am I creating a culture where I’m the leader others want to follow? Where we’re the store customers want to shop in?

where we’re the employer that customer that employees want to work for. And I think the store store manager, the district manager, the regional manager, they really own a huge component of creating that culture inside the four walls of their building.

Shelley E. Kohan (26:57.429)
totally agree with you. You’re part of the culture. You can drive it, move it, change it, and you’ve proven that. I read a lot of the stories from your book. So the other topic I want to try to get to is this idea of mastering operational excellence. And I’ve always believed that. I come from operations, so that’s kind of been my mantra as well. But I look at what’s happening today and the supply chain.

everything going on with that, the tariffs, the uncertainty. And you said, yeah, Shelley, that’s great. Every decade we have problems. But how can you master operational excellence when a big piece of that operational functionality or process is being challenged and taxed, especially over the last few years?

Rachel Williamson (27:45.469)
Yeah, it is. I mean, the bottom line is all the people that are working in the corporate office, retailers that are dealing with, struggling with, trying to fix all this, know, a lot of it falls on them and the stores have zero control over it. If the store, you know, if like, remember at COVID, couldn’t get, stores were empty. You couldn’t get product to save your life, right? But if a store is empty, if a store is broken in sizes, if a store doesn’t get the marketing on time, if it’s, you know, all these

Shelley E. Kohan (28:05.002)
yeah.

Rachel Williamson (28:15.512)
that come from outside of the building that are come from the corporate side. And I did corporate store operations for many years and I loved it. And I did it primarily because I had been on the receiving end as somebody who worked in stores of a store ops group that wasn’t giving me the things that I needed. I was like, I’m pretty sure we could do this better. Let’s get into this corporate side of it. But the truth of the matter is, that operational excellence, there’s a component of it that does reside inside the four.

walls of that building, of that store that you’re leading. And we delve into that in the book. I think it’s like, how are you managing every detailed component within the four walls? I remember when I was a store manager for Ann Taylor, this is way before Acina owned them. And I managed the city center location up on the third floor. And I talk about a story about that, a couple of stories in the book about

Shelley E. Kohan (28:51.607)
and

Rachel Williamson (29:15.312)
this location, but I remember getting there at eight in the morning. We opened at ten and back in the day we were allowed to come in two hours early like that. Now I highly discourage it because it’s not payroll that you can earn back with sales because your store’s not open. But I would literally walk the store from front to back. I’d stand out front. I’d look at the windows, the mannequins. I’d look for dust bunnies in the windows, signage crinkled, you know, is it hanging straight? And I’d walk through and I had a

just a legal pad and a pen and I would make a list of every single operational thing, a light bulb out, a bulb not aimed, dirty fitting rooms, pins from shirts stuck into the drywall, like every little detail. And when my team came in, we would divide and conquer and we would get all that cleaned up. And what I taught my team was these are the details that we have to master. Loss prevention, backroom organization.

And the woman who hired me for that Ann Taylor job was the regional manager, Jean St. Pierre. She’s retired now. I don’t know where she is, but she really had a big impact on me as a leader on my career. And her standards were very, very high. But one of the things that she used to always say to all of us was if your back room isn’t organized and humming like a well-oiled car, know, like the the sales floor is not going to run right either.

would talk about if your car is washed and waxed and looks beautiful, but you’ve not changed the oil at some point, the engine’s going to fly through the hood of that car and that car is going to be no good. Because if you don’t care for the things no one sees, no one sees that back room. But if you don’t keep it organized and running smoothly, the goods won’t get to the floor either. Customer sizes will be missed, et cetera. And so there are so many operations

pieces that still can help a store be successful and those are things that a store manager can own.

Shelley E. Kohan (31:25.835)
love that. So one last topic, I know we’re kind of out of time, but I really want to get to this last topic because I’m a big believer in it. Grow the leader within yourself by investing in yourself. And one of the things you really believe in, and I actually wrote a leadership course for Fashion Institute of Technology. And in that leadership course, we have a whole module on EQ because I believe emotional intelligence is one of the most important.

Rachel Williamson (31:44.824)
Shelley E. Kohan (31:50.968)
qualities and skill sets that leaders can have. And I know it’s a big passion of yours as well. So tell us a little bit about kind of your philosophy about growing the leader within yourself.

Rachel Williamson (32:01.979)
Yeah, you know, like we said at the very start of our conversation today.

You can read all the books you want, but if you don’t apply what you’ve learned, you’re not going to really see meaningful growth and meaningful movement. And even at the end of this book, your journey’s not done, right? It just continues. And so the idea of continuing to invest in yourself, continuing to talk to your supervisor about where you’re winning and where you’re not, and not being afraid of those hard conversations, but just seeing it as, I just want to keep growing as a person.

and I want to keep growing as a leader. And, you know, when you lead yourself with intention, results always follow. And so I think that’s probably a really big piece. Day seven in the book, EQ is your superpower, is an important component. And I do talk about, you know, some tips there on managing EQ. And that, every generation, you know, it’s something that people struggle with because you’re not necessarily born with it, right? And so

Shelley E. Kohan (33:06.783)
Right? yeah.

Rachel Williamson (33:08.132)
It’s like we’re not born with the skills you need to run a great store.

but you can learn them. We learn them from people around us. We learn them from great organizations. I I spent 10 years at limited brands. That’s really where I learned that operational excellence was going to be the deciding factor on if you were going to have a successful brand or less so. The gap was operations boot camp for me. I remember early on, but oftentimes because store operations isn’t all that sexy, is it? It’s the fundamentals. It’s like in football, it’s blocking.

and tackling. The football teams who win are the teams that do those fundamentals really well. Trick plays are super fun, but

They’re not what win football games. And I think that for retail, it’s very similar. The fundamentals of clean stores, well-trained employees, focused KPIs, caring about the customer. Those are the things that make retail stores successful. And those are well within the control of the store manager, assistant managers, even sales associates that don’t have a key to that store. They choose

If the experience is going to be a fabulous one and help customers continue to want to shop there or if it’s the opposite. And so I think this book will be for every level. You don’t have to have the keys to the store in order to really learn about how to be great at retail. And I want retail to stop being the revolving door, the job I have until I get the job I want. know, retail can be such a

Shelley E. Kohan (34:32.375)
love that.

Rachel Williamson (34:52.103)
fulfilling, well-paid career choice, but…

We can’t rely on, I have a great boss who’s going to train me? We have to take that ownership within ourselves and say, you know what, I’m going to own this and I am going to be the leader others want to follow and I’m going to develop people and I’m going to get a reputation for it. And then that’s how you leave that legacy. And I think that’s also part of that whole, where am I going from here? I finished this book, I apply what I learned, I’m running a great store. Who are you mentoring? You know, who are you helping with their

Shelley E. Kohan (35:25.995)
Love it.

Rachel Williamson (35:27.807)
career and all of those things just make it so meaningful and make this journey worth it.

Shelley E. Kohan (35:35.351)
Love it, Rachel, thank you. And leading with intent and purpose. So thank you. Thank you so much for being here. It’s great to have you here. I’m sure our audience learned a lot. And don’t forget to pick up your copy of 30 Days in Running Great Stores.

Rachel Williamson (35:38.747)
That’s right, results will always follow. Thank you, Shelly.

Rachel Williamson (35:52.733)
That’s right, available February 24th, 2026. Thank you so much.

Shelley E. Kohan (35:56.919)
Thank you.

Shelley E. Kohan (00:03)
Hi everyone and thanks for joining our weekly podcast. I’m Shelley Kohan I’m very excited to have Katie Thomas with us from Kearney Consumer Institute. Welcome, Katie.

Katie (00:15)
Thank

you. Thank you, Shelley. It’s great to be here.

Shelley E. Kohan (00:19)
It’s fun because today we’re going to talk about something that is all over the news. But ⁓ I’d love to hear your view on this because you kind of look at this a bit differently. So everyone’s talking about the K-shaped economy. And I think a lot of retailers and brands are reacting, as we do, to the very specific model of the K-shaped economy. And you’re saying that

It’s not wrong, it’s just an incomplete kind of story being told, which can misguide a lot of retailers and brands. So let’s start with kind of your general overview of what’s happening with that K economy.

Katie (00:55)
Absolutely, yes. mean, like you said, we all see it in the news all the time, but I found that over time it just wasn’t getting any more contextualized. It was sort of just the same analysis of like essentially to like the rich are getting rich and the bottom of like the haves and the have nots, like so to speak. And I didn’t like that either. Like as someone who does try to advocate for the consumer, not only did it feel a little bit oversimplified, but at times, you know, starts to feel a little bit offensive even if asked

if it are true or people who are part of those groups feel that that’s the case. ⁓ It just felt like we could add more dimension to it and really understand a little bit about better about the consumers that live within those pieces of the K. So that’s what we tried to do was really just add context to it beyond the income alone. So we did technically keep the top of the K and the bottom of the K, but we split both of those into instead of into just one group into three groups based around, you

like buffers that they may have, what they may be exposed to in certain choices or lifestyle decisions that they’re making, that we think better inform consumer behavior and spend as we think about the K in general and certainly from a brand or retailer’s perspective.

Shelley E. Kohan (02:11)
And I know Kearney just came out with the great report, which will tell everyone the name of that report and where they can get it, because it just dropped recently. part of this idea is this, I’ve heard a lot of people talking about the middle class is shrinking or disappearing. And when you look at the K, that kind of gives you that reference when you look at the kind of ⁓ K economy, the symbol of it. But I think what you’re saying instead of that is that it’s not just one

Katie (02:34)
Yeah.

Shelley E. Kohan (02:40)
general segment of the middle class, but there’s all these other factors that have to be considered. So we’re actually further segmenting that middle class, even higher and the lower social levels as well, but when we put them in these nice little buckets, we’re actually misclassifying customers. So then we’re making decisions about pricing, assortment, and messaging that is maybe missing the mark.

Katie (03:06)
Absolutely, I mean there’s a couple different ways to think about the declining middle class. Again, part of it is sort of true, but when you think of the K, like when I talk about it, there’s what I would say the bottom of the top of the K and the top of the bottom of the K. And some of those folks are, I mean really beyond that, people are still considered middle class, but those folks are actually quite mobile. So you can actually jump from the bottom of the K to the top of the K if you get a good job or move to a lower cost of living area.

Shelley E. Kohan (03:35)
Mm-hmm.

Katie (03:36)
and vice versa. So that’s what we call this one group over leveraged, right? Or on thin ice, which is you could be the top of the K and actually be quite exposed to a job loss or a stock market crash or a tough housing market because you’re over leveraged and you’re living in a high cost of living area and your assets are not liquid and you’re not actually able to just spend in the way we assume the top of the K is spending right now.

Shelley E. Kohan (04:03)
It’s really interesting. think the other, you have this idea about the trading up and trading down, and you really don’t look at it as trading up or trading down. You kind of have this idea that consumers are selectively reallocating their personal resources. So tell us about that. That’s super interesting.

Katie (04:21)
Yeah, for a long time, I have never loved the concept of trading up and down because it implies this linear behavior on behalf of consumers and that they’re just looking at, in particular, when it comes to trading down, it’s like, oh, instead of buying this brand, I’m going to trade down to this cheaper option. And what we hear from consumers is they really, first of all, they consider themselves savvy and they’re making trade-offs across categories. So it’s not these like super linear competitive choices that

they’re making, but they’re saying, I am going to try to really optimize what I spend at the grocery store so I can still spend on my vacation, or I can still go to the mall on Saturday and treat myself to something fun. And so that’s a lot of what we see is this real thoughtfulness around where they’re putting their money and what they still want to be able to afford, as opposed to, again, across categories trading down. And a lot of times if they are truly quote unquote

trading down, they don’t necessarily feel that that’s the case. They feel like there’s a price value mismatch. And so they actually, again, think I’m paying for the product that feels like the right price quality connection and not that I’m paying more for less almost. Yeah.

Shelley E. Kohan (05:28)
Mmm.

Right, that’s interesting.

I think the other thing, you mentioned it earlier, but maybe you can tell us a little bit about these quote unquote buffers. Because I think that we always are looking at income. Again, we’re doing this segmentation that’s very large and it feels like we’re putting people in buckets and categories. But we have to actually look at lifestyle, circumstance, and other factors that are really impacting how retailers and brands should be looking at the business.

Katie (06:11)
Absolutely. that’s a great deep dive there. So when we think about buffers, it’s just what it sounds like. in particular, when you think of the top of the K, a fair amount of people in that group have either generational wealth or a reasonable amount of family help. So when you’re even looking at income, their money isn’t necessarily coming from income. Again, sometimes you look at net worth or other assets, but there’s a lot of protection there that exists in higher income that

like simply may not exist elsewhere. Then there are the pieces of it that are choices. So it could be where you live. You could live at a high cost of living like California. The state of California is a great example there. And if you work in tech, I mean, maybe you do feel like you don’t have a choice or if that’s where you’re from, that’s where you want to live. So you’re living in a high cost of living area. So that eliminates some of the buffer. Whereas on the bottom of the K, frankly, you actually can see the reverse, which is people living in a low cost of living area, or maybe they don’t have this, you know,

family wealth in the same way, but they have a supportive community. And that’s what actually keeps everybody in the bottom of the K from like, quote unquote, struggling too much. But all of these things also then start to feed into what you’re exposed to. So the other piece of it is your lifestyle choices, right? Like lifestyle creep is very real. And it can be even worse, frankly, at the top of the spectrum than at the bottom, which is like if you’re living in a nice house, all of sudden you want a nice car and you pay

Shelley E. Kohan (07:16)
Mm-hmm.

Katie (07:41)
pay

a lot for landscaping, and you have to furnish that whole house, and all of a sudden it becomes a lot more than you realize when you were well-intentioned to start with to try to live in a nice neighborhood. And so that’s the other piece of it, is so many of these things feed together, that then all of a sudden, if you are stretched that thin, all it takes is one of the things we’ve been talking about from a macroeconomic perspective, job loss, AI bubble burst, being stuck in the housing market.

Shelley E. Kohan (07:53)
Mm.

Katie (08:11)
market situation and then all of sudden your financial situation could change and you’re spending to go with it.

Shelley E. Kohan (08:16)
Yeah. Yeah, that’s interesting.

I also think ⁓ the idea of a comfortable living, I lived in California, I loved it. I love Cali, but it is expensive. Now I live in New York, which is also expensive. ⁓ But this idea of a comfortable living has really changed over time. Our consumer expectations are much higher. So tell us a little bit about what you’ve seen in your work and research that you’ve done about this change and what comfortable looks like today.

Katie (08:24)
Yeah.

Yeah.

Absolutely, Shelley. This was a question that really has been nagging at me because again, know, wherever you are in the K, I just feel increasingly like I hear from people, like I just, I don’t feel like I have this idea of a normal, comfortable life. I feel, you know, like we’re a dual income household, but when all the bills are added up, I still don’t feel like I can go out to eat a couple times a week. Or I feel like I have to order delivery multiple times a week because I don’t have the time to figure out cooking or other

And so that’s what we looked at as well,

which was this cost of a comfortable life and how much the combination of both norms and prices have ballooned in the last 60 but 30 years. I think of myself growing up in the 90s, right? And what that experience was like and how different it feels

now in terms of the amount of clothes we have has doubled. And one example why there is whether you’re a man or a woman, business casual.

Shelley E. Kohan (09:42)
See you.

Katie (09:46)
actually. So people used to have like almost a uniform that you wore to work. And in fact, things like business casual have made it so that you have a lot more clothes or more shoes. You don’t just have the one pair of shoes, you have all of these shoes and trend cycles for men and women are faster than ever. So you’re now buying new sneakers all the time. And you know, the tricky part with some of this is it’s easy to like get in this mode of like finger wagging at consumers around spend, which I also don’t love, right? Like, well,

you’re just shopping too much. It’s a reality we live in, which is like, you know, people expect to be able to order delivery. They see clothes all the time served to them on Instagram and TikTok and home decor items and all these things that have just continued to increase. You’ve seen childcare costs go up because more women are in the workforce. So like all there’s all these things that have been on collision courses that have just made people feel like this life I thought I was gonna have, I don’t have.

Shelley E. Kohan (10:24)
Right.

It’s interesting, and I want to ask one question about debt because I think, you know, especially with the Gen Z and Gen Alpha, as they’re looking at, you know, either furthering their education or going to trade schools, they are so debt adverse.

And so they’re making these lifestyle decisions because they don’t want to come out of school or trade school with this huge amount of debt that they’re faced with. So does that play into this kind of comfortable class not having debt?

Katie (11:17)
Absolutely. I think, mean, the debt has always been an interesting discussion when it comes to consumers, because for better or worse, when you look at most ⁓ of the government data on debt, it’s literally just going up. like, like we’re all like credit is just like the amount of credit or loans or mortgages and just ⁓ say what the country, right? It’s just like, we’re just going up. It never feels like it really comes down. So clearly there’s, there’s an issue there, but it’s also

like.

not a data point I always reference at large because it’s not like it goes up and down. It’s just kind of on this like upward trajectory. I do think what’s what Gen Z and Gen Alpha have the benefit of is learning from, you know, what student loans and certain things people have gone through, or even the cost you’re hearing it about kids, right? I’m not sure I can afford to have a kid. And I think what’s good for those generations is they do actually feel like they have options, whereas, you know, a lot of the

Shelley E. Kohan (12:09)
Right.

Katie (12:18)
generations prior to that, it felt like you were being funneled into one direction. Like you had to go to college, you had to try to buy a house, you had to. So I think that piece of like debt as a component of that decision making ⁓ is good and will maybe help kind of stabilize some of these costs that do feel like they’ve gone up a little inexplicably at times. Costs of education, cost of you know houses, etc.

Shelley E. Kohan (12:44)
And I know that we’ve always, we kind of look at the K economy and we always kind of think that the bottom levels, the lower levels that are on that K are more fragile than the top. But your report suggests the opposite, actually.

Katie (13:02)
Well, I wouldn’t say that they, there are certainly consumers in that subset that are far more fragile, ⁓ or that are more fragile, but not everybody in there is struggling, right? ⁓ A lot of people know how to live within their means. They aren’t necessarily, so lifestyle creep is real for some people. It’s not for other people. Other people are like perfectly happy with the lives they have available to them. And so that’s the choices that they’re making there, which is again,

a little bit of those buffers or a little bit of like, you’re just, you’re happy with a simple lifestyle, you’re not as exposed and you’re also still able to spend. So that’s the other thing I find that sometimes is a little bit insulting is like, well, again, they just want cheap, cheap, cheap. And that’s not the case at all. mean, sometimes like that’s exactly where, you know, people are looking for quality and they’re absolutely willing to pay more for higher quality and they have the ability

to do so, and it can be just insulting to strip quality out of a product to hit a price point and assume that’s what someone’s looking for. Again, they’re making these thoughtful decisions across the wallet. so, over time, brands will be exposed if they think cheapening a product quality is gonna be what keeps them in the fold.

Shelley E. Kohan (14:24)
I think the other interesting thing is that we’ve been hearing, I don’t know, for nine months, six, nine months about how consumers are going to pull back. Consumers are going to pull back spending. They’re going to pull back spending. Yet, you know, I get the reports every month, you know, and I’m looking at, I’m not seeing the pullback. Why is that?

Katie (14:39)
I

mean, I know that’s what some of we’re trying to tackle here too. And they’re not pulling back yet. They don’t feel like they’re living a comfortable life. It is like all of these data points do feel in conflict. ⁓ So I think it is a little bit of those things coming together where some of it has to do with some of the frustration and the negativity are ⁓ that the economy has grown, but the average consumer didn’t necessarily benefit from that. So to benefit from economic growth typically means you have to be invested in a

Shelley E. Kohan (14:47)
Right.

Katie (15:09)
meaningful way or have like

really well-timed real estate, and that’s just not the reality for most of us. So, you know, people may not have a huge investment account, they may not have like, they have the house they live in, but they’re not necessarily gonna be able to profit from real estate on a regular basis. And so some of the frustration and negativity comes from like feeling like, again, there’s this growth that’s happening that people aren’t benefiting from, or that their net worth is tied up in these like illiquid assets. mean, retirement account,

is an investment account, but it’s illiquid to the average consumer. And then the other piece of ⁓ it is just, like, we’ve seen consumers possibly, I think, my hypothesis is that you’re seeing people forego some long-term ⁓ spending for short-term. So that’s why spending is held up, which is like, there’s just been a real emotional strain on the consumer. And people like,

It’s like retail therapy, essentially, but it’s also a sense of control and normalcy, which is, know, I can still go to the mall, I can still have my simple pleasures, I can still go shopping, and the job market has stayed relatively healthy. I mean, that’s the thing I’m most aware of, where I think could lead to a pullback in spend is a job market, you know, getting worse. And so that’s the number one thing I’m watching. But for the most part, feel like, sort of to your question even on debt,

Shelley E. Kohan (16:26)
Mm-hmm.

Katie (16:38)
I think people are also like maybe not saving for a house. They’re kind of just like, I’m gonna live my life right now. I’m gonna take the trip. Yeah.

Shelley E. Kohan (16:47)
Yeah, I think

it’s interesting because you know talked about retail therapy. It’s a real thing. It makes people feel better and I do think this whole idea of wellness, you know, since the pandemic but it’s grown but now it’s very sticky because people want that work the what I call life work balance, right? They want to feel wellness. So I think there’s a lot to that whole idea of retail therapy and wellness.

Katie (16:52)
Totally. Yeah.

And self care, I mean, that’s

like how we see it is these small moments of self care. So that’s why I also think, know, wellness is a funny category right now, because we go after a lot of the vices people have, right? Like, ⁓ you know, don’t drink and don’t eat sugar and don’t, like people gotta live. You know, I think we go to like hard assuming that we’re gonna eradicate all these indulgences and vices even, ⁓ because I think a lot of times like those are the simple pleasures of life.

Shelley E. Kohan (17:31)
This

Katie (17:42)
too.

Shelley E. Kohan (17:43)
Yeah.

So tell me, let’s get to the nitty gritty now. What should retailers and brands be thinking about? How should we be moving this forward? Based on our conversation and what I read in the report, my key takeaway is you could have two customers in the exact same segment, but actually should be treated very differently behaviorally because they’re making different choices, right? So they’re going to respond differently to pricing, promotion, or product launches.

How should retailers and brands navigate through this?

Katie (18:18)
The biggest thing brands can be doing right now is having honest conversations about price value and the value mismatch because that’s exactly what you’re seeing is retailers and brands sometimes still have a little bit of a bias to like the old good, better, best model, right? This like price tiering of like, let me just like, I just have to hit these price points and then I check the boxes for everybody. And that just structurally doesn’t seem to be working well anymore, right?

Shelley E. Kohan (18:35)
yes. ⁓

Katie (18:48)
people really, have as consumers, have more options than ever. assuming like, me cheapen some things to hit a certain price point, but also let me assume premium is going to hold up. ⁓ Both of those are risks. like the luxury market we’ve seen, you know, stabilize, we’ll call it in recent years, because they just so many of those traditional fashion houses just kept taking prices up. And even if you could afford it, nobody wants to feel like they’re being taken for a ride.

that’s kind of what you started to see is like even at the high end, there are people like, well, why would I spend that much on something? And that’s the thing I’ve seen in general is we’ve seen a lot of brands just continue to take price because they feel like they can, and consumers are really questioning this value equation. And that’s not going to be a change you see overnight. It’s going to be you’re getting this slow churn out, and then a year or two from now, you’re going to be in a tough position. So if I’m a brand, that’s the conversation.

I’m having is really like, what do we really want our price value to be? What is the right mix? If I’m an apparel retailer, what does that look like for basics and statement pieces? In the near future, what I’m hearing from consumers is actually they know how to optimize their basics. They know how to find simple white T-sym. What they want is the good statement pieces, but that doesn’t mean you can’t have basics, right? So it’s really like trying to have that honest dialogue about

what those value matches and mismatches are.

Shelley E. Kohan (20:22)
That’s super fascinating. I think that ⁓ when you talked about luxury, something popped in my head and this is the whole idea of this bifurcation of luxury. have a lot of the luxury houses, ⁓ they’ve gone up.

So you have a lot of the luxury brands have actually outpriced themselves from this aspirational shopper. And then you have the other luxury brands that have kind of valued out some of their, so you don’t have this aspirational luxury. Like where’s that coming from now?

Katie (20:58)
Yeah, I mean, in some ways, if you’re like sort of on the upper end of what you’re describing, we’ve seen a big shift to jewelry. So that’s why because jewelry has not taken ⁓ price in the same way as like leather goods, basically. So you’re seeing like Van Cleef, Cartier, they’ve done really well the last couple of years because now what used to be way more expensive than a bag is the same price as a bag and arguably has better long term value. So for if you’re like still a

able to spend. That’s a lot what I’m hearing from consumers. And then in the truly more aspirational, mean, that’s where you get a lot of those interesting brands like a Pauline, even like Totem is not priced quite as high. So you’ve seen even that market become more diverse with interesting brands and people again, really saying like, okay, I want a nice leather bag. What is the right price point for me? And I love like, I don’t know if you’ve ever seen ⁓ the guy Tanner Leatherstein who like

like

rips apart luxury bags and helps. So consumers are educated too on like how good products are. So I think like even there, there’s been, you know, room for some of those. And what I’ve loved to see too is like the Renaissance of brands like Coach, right? There’s room for brands that actually did have a strong enough history to come back into the fold ⁓ and were able to kind of go back to that heritage that they had. And so I think that’s what you’re seeing too from the aspirational consumers.

Shelley E. Kohan (22:01)
I love it.

Yeah, I think that’s great too. I love it when brands resurrect themselves and come back strong. It’s really fun to see. Yeah. They’re killing it. I know, it’s great. Anything else you want to add, Katie?

Katie (22:33)
We’ve seen some good ones in last few years. Yeah, Abercrombie, like I remember wearing an Abercrombie sweater in my like eighth grade yearbook photo and here we are again. Yeah.

⁓ I mean, I think we’ve captured all of the big things. Again, it’s really just, I just think it’s interesting to think about the level of exposure and what that means to ⁓ how consumers will actually behave and spend. And when will we see this pullback? ⁓ Maybe we won’t, but ⁓ I think that’s optionality. know, right? Yeah.

Shelley E. Kohan (23:12)
Let’s hope not.

Where can our listeners find your newest report hot off the press? know you’re featured in it, so love that.

Katie (23:22)
Yes, yes, so

they can find it on Kearney’s website. So if you go to Kearney and look for the Kearney Consumer Institute, it’s called Hidden Dimensions of the K-Shaped Economy. So you can find it there. Quick Google, LinkedIn. You can find me on LinkedIn as well. ⁓ any of those places.

Shelley E. Kohan (23:41)
Great, Katie, thanks for being on Retail Unwrapped. was a pleasure having you here and helping us look more deeply into what’s happening in our consumer mindset.

Katie (23:50)
Yeah, this is a great conversation. Thank you so much, Shelley.

Shelley E. Kohan (23:53)
Absolutely.

Shelley E. Kohan (00:03)
Hi everybody, thanks for joining our weekly podcast, Retail Unwrapped. I’m Shelley Kohan and I’m excited to welcome back Liza Amlani Welcome back.

Liza Amlani (00:15)
Thanks Shelley, I’m excited to be here!

Shelley E. Kohan (00:18)
It’s always a pleasure having you on. I always learn so much when you come on. Of course, we know you’re principal and founder of the Retail Strategy Group and co-author of a couple books, one that just came out, The Material Life. So we’re going to talk a little bit about that today. But you also co-authored The Wholesale. So welcome back.

Liza Amlani (00:36)
Thank you.

Shelley E. Kohan (00:38)
It’s an exciting time for retail. And before we jump into kind of the thought process behind the book and some of the key components of it, because I think we can all learn from that, I gotta ask you, NRF, what did you walk away with this year from the NRF? Because I saw you at the NRF for a brief moment when you weren’t doing all your moderations and speaking, so.

Liza Amlani (01:00)
Well, I have to say that NRF was a marathon as it always is, I think this one hit a bit different only because as you know, NRF Rev was something new, part of the big show, but in a different location, but same time. And what was interesting about NRF Rev is that there was this incredible focus on circularity, sustainability, returns, reverse logistics, and…

What was so wonderful was that there were conversations happening that were really meaningful and purposeful. So we have brands, retailers in the room that are really focused on those topics like sustainability and circularity and how reverse logistics impacts maybe the bigger strategic goal. And then there were also nonprofits in the room. There were ⁓

also solution providers of course in the room. And what I was excited to do at part of that show was I led three round table discussions. So the way the show was formatted was we had our keynotes and then there were breaks between the keynotes so that people could go like upstairs and it was like this huge room with all these round tables and they had experts and industry leaders to lead round table discussions.

And I do have some highlights, but I’m going to pause it for a second.

Shelley E. Kohan (02:32)
I was gonna say, I know it’s all secret stuff behind closed doors, but can you share any kind of, maybe some key takeaways, what you learned?

Liza Amlani (02:40)
Yes, I think the first thing was that returns are not just an operation problem. They are a product creation problem rooted in materials, fit and design. So think of reason codes as a great example, training employees, frontline to connect with what’s happening in the DC when sorting is happening, ⁓ having the right

return codes is very important and having the employees match return codes to ⁓ what’s happening in terms of insights going back to the Merchant Design Team, for example, if there’s an issue with fit, right? ⁓ And I think having just the use of technology to help us do that faster and better and more accurately, I think that was a really big takeaway, but.

Returns should shape how products are designed, how they’re developed and how they’re bought and right now I don’t believe that’s happening But there it can happen

Shelley E. Kohan (03:45)
I,

and it should happen and going back to your first point about sustainability, if you think about it, returns are a big sustainability issue because the higher the reports, the more stuff, the more it gets put back, then it doesn’t, I mean, it’s like, if you could solve it at the beginning design process, you can reduce ⁓ some of that impact on our planet too, right?

Liza Amlani (03:55)
yes.

Yes.

Exactly, and I think the real fix here is preventing returns instead of mitigating them. So that was my biggest takeaway from NRF Rev. Absolutely loved it. It was amazing. And then ⁓ I was lucky enough to also go to the Foundation Honors Dinner, so that was really, really nice. They honored Fran Horowitz of Abercrombie, and it was lovely. So I think it really humanized why we’re in retail in the first place, and I just, you know, just giving back to the students and…

Shelley E. Kohan (04:13)
Bye!

Of course.

Liza Amlani (04:39)
⁓ seeing how these retail executives have really embedded their journey in people and I think that is what NRF was really about this year.

Shelley E. Kohan (04:51)
That’s great. ⁓ I love that. That’s a whole different take on NRF than what I’ve gotten from a lot of other people. So thanks for sharing that. ⁓ That’s a whole other podcast. All right, so let’s talk about the material life. So first, just kind of give our audience just a little kind of high level view of what’s the book about and what is your intention with the book.

Liza Amlani (05:01)
yes. I didn’t even get into the big show, but we can do that later. That’s a whole other podcast. Yes.

So the core idea of the material life is that

the how matters more than the what. Meaning the way we go to market and create products matters more than what we’re

Now let that sit for a minute because that’s something coming from a merchant of 20 years. That’s not very common, right, for a merchant anyway.

Shelley E. Kohan (05:45)
Right.

Liza Amlani (05:48)
I’ll give you an example. Here’s what I’ve observed, having this career in retail for over 20 years, merchandising, product creation. When I was with Ralph Lauren, for example, I was never involved in the design function or the sourcing function, or I never visited a factory floor. It’s never been something that merchants really do unless they’re at a super high level.

But it is not it’s not common. So the focus is really on What is the assortment? What is how will the consumer react to the assortment? You know, what is the? execution of the merchandising strategy on the shop floor and it’s really rare that a merchant will see a factory floor and Because merchants are not exposed to this and we leave it with sourcing and product development. What’s happening is

costly industry problems like overdevelopment like excess inventory like this extended time to get to market These things are happening Because merchants spend time downstream versus upstream Yeah, so that’s really the core ⁓ I guess it’s a core message of the material life. Yeah

Shelley E. Kohan (06:50)
Mm-hmm.

That’s

great. And I know there’s so many companies out there that are really focused on product innovation, product innovation, product innovation, but you have kind of a different spin. You’re really talking about process innovation. So tell me a little bit about that.

Liza Amlani (07:30)
Now this is really the theme of the entire book is that process innovation is the most underrated opportunity in the supply chain, specifically in fashion. And what we talk about is this concept of being materialistic and implementing material direction in the product creation calendar, elevating teams to collaborate more and design into materials versus going to market.

and creating new materials, which is directly connected to sustainability initiatives. And the market’s already thinking about this because the market has already expressed that materials are the foundation of a product. Let’s say garment. Fabric is the franchise. Think Lululemon, Viore, Uniqlo, right? The market has already expressed that.

Materials are the foundation of the product and fabric is the foundation. But even if this is the case, if we look at the product creation process, typically is not required to design into these materials. The concept to market process has always been design leading when it really should be materials leading.

Shelley E. Kohan (08:51)
Right.

Wow, that’s a big change, mindset change, isn’t it?

Liza Amlani (08:58)
It absolutely is. And the way that we think about this process change, we really need to think about it across every single function in the product creation process. Whether we’re talking to sourcing, supply chain, product development, tech designers, or merchants and planners who are starting to develop a line plan architecture all the way to the assortment plan.

It’s really connecting those internal cross-functional teams to meaningfully eliminate a lot of those silos because now we are not only talking about materials at every milestone because we’re leading with materials, we are reducing significant unnecessary development because even when we think of the line plan, if we add in

you know, this is the material that we’re going to use for this capsule or this collection in the delivery, we know that that is going to be a constant and we’re not going to see rework later.

Shelley E. Kohan (10:03)
That’s great. I think so I got to reflect back on something you’ve said a second ago about merchants don’t normally visit factories. And I have to say since the pandemic.

Liza Amlani (10:10)
Mmm.

Shelley E. Kohan (10:13)
I think you have a great opportunity right now to really get this message out because CEOs are visiting factories because of everything that’s gone on with supply chain over the past five, six years. So I think it’s a great opportunity to kind of make impact on this movement. The other thing that you always talk about is you talk about this creation calendar having multiple tracks. You know, what does that mean and why is that something that we should be thinking about as retailers or brands?

Liza Amlani (10:20)
Mm-hmm.

Mm-hmm.

Well, this is a great tie-in to what we call AI, which is actually acceptable inequality. And I know I’ve talked about this in, I think, some of your classes, right? And it is about innovating the product creation calendar to include multiple tracks. So when we think about how apparel is created today, and this is really almost category agnostic, because if you think about apparel, footwear, accessories, even…

Shelley E. Kohan (10:51)
Yes.

Liza Amlani (11:11)
home decor and textiles within home. The single track calendar, it assumes that all products are equal and as such all products are created equally. But the reality check is that single tracks have their limits. And once those limits are hit, single tracks contribute to excess inventory and it overburdens vendors. So,

process innovation here is needed to involve the single track calendar into multiple tracks. And the intention of it is to misalign, well, really it’s to remove that inherent misalignment of product from its value chain. So think of it this way. If tracks are created by product type seasonality, think seasonless versus core versus seasonal fashion, and

Shelley E. Kohan (12:04)
Mm-hmm.

Liza Amlani (12:07)
design and development complexity, then the tracks can be further distinguished by the extent of digital product creation. So keep seasonal, season-less items strictly on digital since they reoccur every season or every other season. Reserve physical sampling and prototyping for like an innovation track or something, you know, highly complex. And then capsules.

are smaller than the main season. Let’s say you have ⁓ a collab with another brand. Think, you know, I mean, there’s so many other, I won’t even get into it. But think of Capsule Collections, which are smaller than the main season, so they’d need fewer touch points, so they’ll be a smaller track. And then you have Fast Track, which is triggered by market signals, launching closer to market, shorter timelines. And that track can use tactics like postponement, for example.

Shelley E. Kohan (12:44)
you

And so when you’re trying to manage, I’m not a merchant like you’re a merchant. I understand merchandising and I understand the functions of merchandising, but you’re the true merchant. So when you think about having these multiple tracks and you’re a big company, how are you managing all this? Is this easy to manage? Is there transparency? Is there digital databases that help with adjustments and flexibility and agility in these multiple tracks?

Liza Amlani (13:33)
Definitely. I think the way that we need to think about implementing multiple tracks within our current process is when you have, for example, a fast track, which is very market reactive, you’re going to have a pod to approve those. Anything that needs approving, and it’s much more simplified than your regular track calendar, so that those decisions will be faster so that you get to market faster. Because ideally, you

What does every merchant want? Full price sales, closer to market, understanding what the consumer wants, closer to the season that we’re gonna sell it. And if we take a step back and we look at what do our calendars look like today? Well, they’re at least a year. It takes 52 weeks sometimes, right, to get from concept to market, sometimes longer. And if it’s longer, it means you have overlapping calendars.

Shelley E. Kohan (14:21)
Yeah.

Liza Amlani (14:30)
and you’re working on multiple seasons at a time, it gets even more complicated. And you’re getting even further away from the customer. And what happens is you have a lot more overdevelopment, a lot more rework, a lot more guessing what the consumer wants. And then add in technology. Well, I think that teams will probably break, right? I mean, what we’re seeing today, and I’ve seen it, ⁓ you know, in some of the teams that I’ve worked with even.

recently is that we’ll have one category working on almost all digital product creation, but they’re still following the same calendar. So even though they’re designed to go faster, right, they still have to wait for approval. So that’s why in some cases you’re going to have different tracks for different types of products.

Shelley E. Kohan (15:23)
Yeah, think part of that is ⁓ it’s difficult changing the mindset. You know, can put the process in place, but I think the most difficult thing is changing the people’s mindset. ⁓ It kind of…

Liza Amlani (15:29)
yes. ⁓

Absolutely. Especially in

fashion and retail because we are so used to working in these retail silos, these highly matrixed organizations, especially with obviously the larger organizations, that thinking how we can innovate the process has to come from leadership, right? It has to come from leadership and it has to say, okay, you know, we’re just gonna find out what it, how is our culture reacting to change today?

And how do we break down those silos so that those cultures are a lot more open to innovation, to change, to implementing technology in the right way, in the right place?

Shelley E. Kohan (16:14)
It’s kind of funny, Liza, because you’ll get a kick out of this. So you just gave me a big flashback. So ⁓ back, I don’t know, I’m going to say 10 years ago, I swear to God, most of my job was trying to convince retailers to use analytics. And it was really hard because buyers would say, I know what sells. I know my customer. I want to get this. And analytics would say, don’t buy that, buy this. And trying to convince them, it was a whole.

Liza Amlani (16:19)
Ha ha.

Ha ha.

Shelley E. Kohan (16:39)
whole huge issue in changing the mindset of the buyers and I feel now you’re kind of at this crossroads on the production side.

Liza Amlani (16:48)
Definitely. And to add what you just said, and such a great point, is that today these retail cross-functional teams across every cross-function, maybe except marketing, don’t really trust the technology, right? And even though we say that they’re involved in the decision-making process, are we really understanding how each cross-function

is touched by a new technology. And I gave this example yesterday on a webinar where we talked about the implementation of a PLM. Now a PLM is like you need a great PLM, something robust where if you do start to digitize your materials, it can actually house them. It can talk to the vendor. The vendor can collaborate. Like PLM is going to help you get your product to market.

faster in the most efficient way possible. But if you’re not involving planning, forecasting, and even even merchandising, right, in how you are building the criteria to either engage with a PLM or not, then that is a massive massive miss because planning their numbers

Their forecasts need to be visible in, like, when we create our vendor orders, right? I have seen many, many duct tape together solutions that talk to this amazing PLM but it’s a mess because you’re not really engaging with all the teams that are touching it.

Shelley E. Kohan (18:24)
Yeah.

Yeah, the collaboration is so important. Let’s talk about, tell me a little bit about, there’s tons of technology out there, but tell me, how does technology play a role here and what can companies do in terms of implementing the right technology or softwares? What should they be thinking about?

Liza Amlani (18:45)
Yes.

So, you know, I can’t take credit for this particular phrase, but I do believe we need to balance the tech and touch wherever we decide to implement it. And I think it was from Nesbit’s book in like 1987, and he talks about this balance of ⁓ technology and human touch, and it’s exactly what we need today. So if we think about the self-

Checkout example. This is great example that’s very fitting for today, right? When we lean too much into the tech, it fails. Amazon Go, great example, right? They’re closing all their stores. ⁓ But when I go shopping at Walmart, there are associates in the self-checkout lane, and they help the customer through any sort of friction when they are trying to self-checkout. And there’s always friction, right?

Shelley E. Kohan (19:35)
Mm-hmm.

Liza Amlani (19:55)
But that’s where that balance of tech and touch is working. And the customer is able to choose which lane they want to go. Do they want self-checkout or do they want the human touch 100 %? So tech is supposed to be a tool. And trying to bolt technology onto outdated processes and hoping for progress is such a big waste of time and money. And I think that’s something we all need to come to terms with. So balancing that tech with

human touch, making sure that we are aligning with how our customer wants to engage with us, how our internal teams want to engage with us, and how we want to advance in things like digital product creation and digitizing material libraries. All of these things are great if they work. And if we understand, OK, do we need a librarian when we have a digital materials library? Yes, we do.

because then the design team can have help when they are looking to design into existing materials, which is something we also talk about in our book.

Shelley E. Kohan (21:03)
that’s amazing. I never even thought about it. But now that you say that, makes perfect sense. Of course you do, right? You got to be able to go through all the content quickly. And you need someone who’s proficient at that. ⁓ That’s amazing. So if you had to leave like closing thought,

If you had to say run, don’t walk, do these things, what would those things be? Would there be a few things? mean, what’s your big advice for retailers and brands out there today going into 26 and 27?

Liza Amlani (21:34)
Really understanding where overdevelopment is happening. I have talked to a few retailers that have really acknowledged that overdevelopment is happening. It’s something that we saw in our report. was the number one issue that brand and retail executives and manufacturers highlighted as a challenge, as overdevelopment as a challenge. If we think about it from a material standpoint and a product standpoint, so just separating them, I’d say…

do that first. And if you already have visibility into your overdevelopment of materials, you’re halfway there. So that’s great. But what we need to do is also understand how does that material that we’re choosing, so this is fabric, print, color, how does that journey align with product that’s being developed? If we have overdevelopment of product, let’s say after assortment lock,

We’re changing things, we’re changing colors, we’re adding. I’ve done it, I know what happens. Are we choosing, are we choosing existing materials? Is that a requirement? So really looking at overdevelopment as a whole, I think that’s really important. And that is directly going to connect with your profit, your margin, right? How much time it’s gonna take you to get to market. So it’s really going to shorten.

Shelley E. Kohan (22:39)
No, it never happens. Come on. ⁓

Liza Amlani (23:04)
and eliminate some of those things which are big problems today. It’s also, sorry, go ahead.

Shelley E. Kohan (23:08)
Yeah, and no,

no, I was just going to say that that’s, you know, reducing the time, reducing the markdowns, reducing the waste. That’s all cost of goods. That’s margin. 100 % break to the margin.

Liza Amlani (23:21)
It is.

And you and I both know, and everyone that’s going to listen to this knows, that that cost that we think is free, because we think the vendor is paying for all that extra unnecessary development, whether it is material or product, it is going to be charged back to the brand. And every CFO will agree with me that it is a line item. But we don’t see that.

Shelley E. Kohan (23:43)
Thanks

Liza Amlani (23:50)
while we’re creating the product. So there is a cost associated with working in this way. And this is exactly why we need to really dig into how we’re creating the product versus what we’re creating from a merchant.

Shelley E. Kohan (24:07)
Love it. Thank you so much. I appreciate you coming on and sharing that. And of course your book, Material Life, is great. And for anyone that’s listening, I mean, I’ll toot your own horn.

But my favorite newsletter is The Merchant Life. I think it’s great, it’s always on topic, so subscribe to The Merchant Life, especially if you’re interested in all things merchant and updated, you know, processes and all kinds of fun nuggets that are in your newsletter that you put out. So thank you for helping us be better retailers and merchants and brands.

Liza Amlani (24:19)
You

Thank you.

Thanks Shelley. And you can find the Merchant Life newsletter at themerchantlife.com is where you subscribe. You can find the every newsletter on our website as well. And I post a lot on LinkedIn, so feel free to get in touch and let’s talk about materials.

Shelley E. Kohan (25:00)
Awesome, thank you.

Shelley E. Kohan (00:03)
Hi everybody and thanks for joining our weekly podcast. I’m Shelley Kohan and I’m very excited to welcome Jason Brenner, who’s Senior Vice President Digital Portfolio at FedEx. So welcome, Jason.

Jason Brenner (00:17)
So great to be here, thanks for having me.

Shelley E. Kohan (00:19)
Absolutely. So I know FedEx just came out with their big return survey and I was really fascinated by it because it shows a lot of AI-powered support along with the consumer growing demand of no box, no label options. So I’d love to get some insight from you about that and also love to hear about returns overall. So coming out of Christmas, I don’t know if you, it’s only what, three weeks?

⁓ But can you tell us a little bit about how returns wore this Christmas volume wise compared to last year or expectations as a starting point?

Jason Brenner (00:57)
You know, we’re still in it, but the returns volume is actually meeting expectations. ⁓ Our volume was up slightly year over year from a ⁓ overall shipping perspective, and returns are ⁓ trending in line with that volume increase. But for us, what we’re really focused on is improving and empowering our customers.

to make sure that that returns experience is great for their consumers. And we’re doing that through improving visibility, simplifying the experience, and pretty excited to see how that’s panning out this peak season and post-peak season. So excited to talk more about that.

Shelley E. Kohan (01:41)
interesting is that, ⁓

so the survey showed that like 53 % of consumers found AI, quote unquote, customer service, more satisfying than human agents. And I think that’s pretty cool and remarkable because I’m not sure the consumer’s quite there yet with AI agents.

tell me a little bit about that and ⁓ how is that working? How are they becoming more comfortable with this technology?

Jason Brenner (02:06)
It’s so funny you picked that out. To me, that was one of the most surprising things that we found in that survey as well in the research we did. I take during returns, most customers really just want quick, straightforward answers. You think about your experience ⁓ doing a returns process. What are you looking for? You’re looking for what are the steps? What’s the timing? What’s the status? And AI power tools are getting better literally by the week.

at delivering information as quickly as possible and doing so consistently and doing so in a human tone and doing so that’s grounded in trustworthy data. So from our perspective, it’s less about AI, it’s less about the technology itself, it’s more about how do you just keep pushing the envelope on reducing friction, driving speed to resolution or speed to information. ⁓ So when customers can get good answers right away, ⁓

the experience just feels easier and customers or consumers feel more in control. So I think that’s kind of what that 53 % number was getting at, to your point.

Shelley E. Kohan (03:13)
So what I find really interesting is that, you know, I always said, you know, consumers have always been a little bit ahead of retailers, right? And then the retailers kind of adapt to where consumers are. But I think with returns, it’s the, it’s opposite. Like I think the industry has been ahead of the consumer offering like no box return labels and that type of thing. So customers are used to packing stuff up and dropping it off at FedEx already in an envelope or a box or a shipping label. But what’s also interesting in your survey,

this year is consumers are actually more familiar with no return labels and no boxes. So tell me a little bit about that.

Jason Brenner (03:52)
Yeah, I think we saw that ⁓ the familiar familiarity. I messed up that word, but ⁓ with no box, no label returns jumped from 37 % to 48 % in just one year, ⁓ which is a big jump. And I think it goes back to the when you’re prioritizing work, you’re really thinking about how are you driving the value prop for customers and consumers and it’s oriented around experience. So.

If nearly half of US customers say they’re now familiar with no box, no label returns and the usage continues to increase year over year, the reason for that is once shoppers try it, ⁓ they understand how convenient it is, how low stress it can be, ⁓ and they don’t need to think about printing a label, packaging an item, taping it up. They simply need the item, the QR code, and they need to find a location where FedEx ⁓ has a ⁓ lot of locations that are really conveniently placed for the

broad ⁓ for most of the US population. So we’re pushing the envelope on experience, on convenience, ⁓ and consumers adapt onto that. So that’s where you see ⁓ that adoption curve really increasing year over year. I’d say when we look ahead, ⁓ we expect more retailers to keep scaling these solutions and continue to look for ways

to simplify the returns process. So ⁓ we’re going to continue pushing the boundaries of that value prop for sure.

Shelley E. Kohan (05:28)
think it’s great and it certainly makes it a lot easier. And the other thing from a retail perspective, if you think about it, if you’re relying on the customer to box it, label it, pack it, you know that’s gonna add time into that return getting back in the system as opposed to your code product and you go to the FedEx place drop off because that has to shorten the return time. is that like, are you seeing that?

Jason Brenner (05:53)
Yeah, and the fun thing is get to, know, our job is to, again, to push the value prop convenience, simplicity, ⁓ price, experience, etc. And then, yes, these operational considerations are second order, sort of second order effects from that. But then our job is to plan and react to it. And again, back to the value of AI and data. ⁓ Any changes that come

from our offerings that we create that impact our operations, we then have to study those ⁓ and see what the impacts are to our operations, to our retailers’ operations, and then plan for it and react. But the important thing is starting with the customer and starting with the consumer, and then managing the downstream effects of it, and ideally turning those downstream effects into areas of differentiation.

if you could capture it, study it, and plan for it, and change your operations around it. So we are seeing it, and we’re adapting. We like to say that we have the smarter supply chain, and we help our customers make their supply chain smarter. ⁓ So this sort of falls in line with that, from my perspective.

Shelley E. Kohan (07:09)
that’s great. And I think for retailers, if you can shave off two or three days from that return, getting back into their quote unquote inventory, that’s got to be tremendous for them.

Jason Brenner (07:18)
Absolutely, absolutely yes.

Shelley E. Kohan (07:21)
So the other thing that’s really interesting is that, know, consumers, when they’re doing in-person returns, they have a very, very high confidence level. And so I’m not sure it’s as high with shipping. So there’s like a gap between the confidence going in and returning something and the gap between shipping it out. So what is FedEx doing to kind of close that confidence gap between the two?

Jason Brenner (07:25)
you

Really, really good question and very top of mind for me right now. ⁓ So where does confidence come from? It comes from predictability from visibility ⁓ and visibility has to be grounded in sort of a simple UX, ⁓ simple communications, all of that. So whether a return happens in person ⁓ or through the mail, customers just want to know where their item is and what’s happening next. So our focus is on

reliable delivery, clear tracking, proactive, thoughtful updates throughout the post purchase journey. ⁓ So customers and consumers can easily see the status of their return and trust that it’s moving forward as expected. And that has to apply for returns and for shipping. So ⁓ those are two end to end journeys that we look at constantly and say, how do we drive

incremental improvements, then how do we also radically transform the experience to make it simpler and more trustworthy for our customers and consumers? ⁓ I think we did a lot of great work there going into Peak, and we’re seeing some of the output of that right now. ⁓ But we also have a lot more work to do. if you’re driving towards visibility and simplicity, it’s kind of like your work is never done.

⁓ So there’s always opportunities for us to improve there for sure.

Shelley E. Kohan (09:14)
And I think Jason, you’re right. I think what consumers worry about is that when they do a shipping return, it goes into a black hole. And then they have to sit and wait and wait and wait, right? And so I love getting those notifications saying, hey, we received your return. Hey, your return’s being processed. Because now I don’t have to worry about it. It’s one less thing I have to worry about as a consumer. So I think that’s great.

Jason Brenner (09:21)
Yeah.

Absolutely, I mean the key to great customer experiences is exactly what you just described. Put yourself in the seat of the customer and say what friction points come up, what creates stress, what creates unknown or anxiety, and then how do you solve for those and then even delight within those moments. So that’s what a lot of our team is focused on here.

Shelley E. Kohan (09:59)
Well, I think the other thing that’s really on the top of mind for consumers is this idea of businesses, retailers are now, some of them are starting to charge for returns. I think it’s like 40 % or something based on the information that was collected from your survey, it is 40%. But so that’s it, that’s a lot of businesses that are starting to charge for returns. And when you think about it, it makes sense because with all the other cost pressures, high labor costs, tariff costs,

Jason Brenner (10:00)
out.

Shelley E. Kohan (10:28)
cost of goods increases, et cetera, I can see how retailers are finding it that they have to do that for some customers. But what’s happening is consumers are actually making a purchasing decision based on whether or not they can actually make a return. And this is more so online than in-store shopping. So what are you doing to kind of balance ⁓ that in terms of customers making choices about

how what the return policy is based on what they’re purchasing.

Jason Brenner (11:00)
Yeah, let me let me add to your point there. So you mentioned 40 % of businesses are now charging for returns and on top of that specifically 59 % of consumers avoid retailers that charge for a return. So this is this is this is the conundrum. So that’s what our survey just kind of came out with recently. So we really encourage retailers to be intentional and transparent. Convenience.

Shelley E. Kohan (11:15)
Wow.

Jason Brenner (11:28)
does not mean that the retailer has to absorb every cost. ⁓ But I think what really breaks down the trust is surprises in the experience. ⁓ So again, being intentional ⁓ and being transparent with your customers upfront, ⁓ we see nets the best results from a lifetime value perspective. ⁓ You’re not just trying to win this purchase.

You’re also trying to win the lifetime value of the customer and the repeat rate and delivering on a strong customer experience. So ⁓ I think, again, we see trust breaking down the most on when surprises come up later in the journey at the time of return. So ⁓ the data shows that shoppers value that simplicity, that clarity. I guess when policies clearly communicate and are easy to understand,

then retailers have more flexibility to manage the costs without jeopardizing experiences. So ⁓ I don’t think there’s a silver bullet here. This is about balancing your customer experience versus the reality and the economics of your business. But the most important thing is being transparent with the customers.

Shelley E. Kohan (12:44)
No, that’s great. And let’s talk for a minute about the bad actors, the bad actors meaning fraudulent returns, because I do believe that there are sometimes when you have bad actors that are trying to return things fraudulently. And when you talk about businesses, they have stricter policies, shorter windows, and they’re trying to of curtail that fraudulent. So are you able to use ⁓ AI? How can you help retailers with the fraudulent returns?

Jason Brenner (12:59)
Yeah.

Shelley E. Kohan (13:14)
concerns.

Jason Brenner (13:15)
I appreciate the line of questioning because these stricter policies, the tighter ⁓ charging, all that reflects real pressures that retailers are facing to manage costs and returns fraud, is very, very real. ⁓ But I’d say net, our perspective is that that friction, that may be healthy friction, should be very targeted rather than universal.

⁓ And the good thing is the visibility and the data are key ⁓ to enable that and they’re becoming more and more mature. So what do I mean by that? ⁓ I’ll give you a very specific example. We support our customers by providing tooling that improves shipping tracking. One example of that is picture proof of delivery. ⁓ So that shows retailers and customers exactly when and where a package was delivered. ⁓

That extra visibility helps retailers reduce fraudulent replacement claims and associated costs. And there’s also in that process, ⁓ we are rolling out more and more ⁓ data points to help validate that the shipment was delivered, like GPS proof of delivery, ⁓ attempted proof of delivery. ⁓ All these data points add up within the retailer’s arsenal to help validate ⁓

that the delivery was made, the attempt was made, it was made to a specific address. ⁓ In addition to that, we are rolling out some enhanced post-purchase digital offerings coming very soon, ⁓ which will continue to simplify the returns process for both customers and businesses. So we have in-market, live, ⁓ we’re using predictive models, we’re using enhanced data points, ⁓ and we’re furthering that value prop.

which is really exciting to empower our customers to reduce their incident of fraud.

Shelley E. Kohan (15:16)
That’s great. And so can you, I know you probably can’t tell me what you’re doing yet because you haven’t announced it. Is that a good guess on my part?

Jason Brenner (15:23)
That’s a good guess. We’re announcing something

very, soon ⁓ regarding a post-purchase solution and a post-purchase suite. Yeah.

Shelley E. Kohan (15:30)
That’s awesome.

Okay, so my quote, I know you could probably answer this question. So when I think about the fraudulent returns, I’m with you. think creating all these rules and policies for the 10 % that affect the 90 % that are good returns, you know, just doesn’t make sense to me. So you have to figure out a different way to deal with that 10%. But in this new stuff that you’re doing, the predictive analytics using AI, that type of thing, do you think that you’re able to more quickly make a decision about returns that are fraudulent, which are not

thereby, you know, what we want to do is reduce the amount of time it takes to authenticate a return.

Jason Brenner (16:10)
And that’s exactly what we’re doing. What we’re doing is we’re providing our retailers, our customers ⁓ with more data ⁓ and showing them, here’s the use cases where others are identifying, this is how you leverage this data to make informed decisions. ⁓ We are not in the business of singling out individual customers or anything along those lines. We’re in the business of…

Hey, we have a tremendous amount of data at our fingertips. ⁓ Our network produces two petabytes of data a day, which is really crazy on the 17 million packages that we deliver per day. So we’re in the business of saying what data do we have available? Where are we seeing folks leverage that data to make informed decisions to improve their KPIs? ⁓ So that’s where we keep ⁓ trying to push the boundaries on.

Shelley E. Kohan (16:44)
Ha ha.

No, that’s great,

that’s great. And I’m going to impress you with my knowledge of petabytes and gigabytes. Isn’t a petadite a million gigabytes?

Jason Brenner (17:14)
I believe so, yes. Yeah. It’s a tiny effort for yes, it’s it. It means a ton of data we had. We have. We have some funny stats on, know, it’s it’s you know the classic the football fields, etc. It’s to the moon back, etc. But I’m forgetting the specifics of it, but net it’s a ton of data. But but the data in itself is the most important thing is what you do with it.

Shelley E. Kohan (17:15)
or something like that. Yeah. So that’s a lot. That’s a ton of data.

Yeah. So the other. Yeah.

Of course, definitely. So the other thing is, I don’t anticipate, and reading your survey, I don’t think you anticipate either. I don’t anticipate consumer behavior changing and returns becoming either obsolete or less. think the behavior we’ve seen, returns are going to continue. But what can change and what you guys are working on is how we deal with returns to reduce the friction points and to keep…

inventory in our systems at a more, at a quicker rate, right?

Jason Brenner (18:14)
Exactly. I mean, if I look at my own house, I don’t think returns are decreasing. I think from our survey, it showed that 40 % of consumers expect to return the same amount or more in the next year. yeah, think returns are just becoming increasingly a routine part of doing business, which means that we, as the supply chain providers and retailers, have to design for them intentionally.

⁓ It’s no longer an anomaly. ⁓ It’s just part of doing business. I think what that means for us is the experience has to be more connected. It has to be more predictable. It has to be more data-driven. ⁓ And it has to, back to the point of ⁓ transparency, ⁓ it has to reflect the voice and the values of the retailer ⁓ if the retailers want it to drive lifetime value for them.

So I think, yeah, it’s just, it’s a part of doing business.

Shelley E. Kohan (19:16)
I love all the stuff

that you’re working on and I love the fact, Jason, that you are absolutely putting the consumer in the center of this equation, which is what I think you have to do. So what are you most excited about in terms of designing for the emotional experience of returns, not the logistical one?

Jason Brenner (19:36)
Yeah, I think if you see in our language, it’s oriented around when we talk about our no box, no label solution called FedEx Easy Return, it’s all about convenience, being straightforward, being stress free. So you’re hitting on the point around the emotional experience for returns. All of that is very intentional. ⁓ Returns are often the last experience that a customer has with your brand. ⁓ So how that moment feels really matters.

It could be make or break whether or not they repeat with you and all retailers and brands are orienting around lifetime value of a customer, which a key part of that is that our customers repeating with us. Are they buying? Are they coming back to us again and again? And do they have a positive experience? So. You mentioned emotion. I that’s exactly right. We have to make this process simple. We have to set expectations clearly. We have to make sure customers feel informed.

We have to make the stress and the anxiety of a return, as you described, sort of like the black box. We have to make that go away. ⁓ So the emotional experience plays a big role in whether the customers come back to the retailer and the brand time and time again. So we think about it a lot.

Shelley E. Kohan (20:50)
That

is so true. Absolutely. So I’m going to close with two thoughts. One is I had a favorite retailer that I would buy from every single year for my whole family, my husband, my kids and me. And I had a bad return experience with them. I have not shopped them in seven years. I refuse to shop them.

Jason Brenner (21:04)
Yeah.

my goodness.

Shelley E. Kohan (21:10)
So when you say there’s an emotional attachment, that’s what happens and I won’t bore you with the details, but I’ve never shopped there ever again. I won’t even wear their stuff in my house anymore. But… ⁓

Jason Brenner (21:21)
Yeah, that’s That’s what we so you know

we are trying to make sure that we empower our customers that that doesn’t happen. ⁓ Yeah, you unfortunately. ⁓ When you you think about NPS, there’s you know this delight moments. There’s there’s the detraction moments and both. They’re both equally powerful, so we have to sell for both.

Shelley E. Kohan (21:31)
Of course!

That’s right. And the last thing, here’s a fun fact about me that you don’t know that will impress you, is I’ve actually toured your Memphis facility back in, yeah, I’ve been there. I toured it with your team. I’m gonna say 2004 or five-ish when I was with Saks Fifth Avenue. So I had a great experience and I really enjoyed looking at the facility there in Memphis.

Jason Brenner (22:07)
Yeah, it’s an unbelievable facility. What do you think? were your impressions?

Shelley E. Kohan (22:11)
I’m blown away about the amount of packaging proficiency and efficiency that takes place in that warehouse. It’s just unbelievable. I should say multiple warehouses, but the whole logistics and the planes and it was quite fascinating for sure.

Jason Brenner (22:26)
Yeah, I mean it really blows your mind to see it. I hope I get this right because we’re being recorded, but I believe 1.5 million packages goes through that facility every evening every night. 1.5 million packages every night through the Memphis Hub. ⁓ It’s just mind blowing ⁓ when you think about the scale of what we deliver. It’s amazing.

Shelley E. Kohan (22:51)
It is amazing and also I got

to visit Graceland too so that was fun too.

Jason Brenner (22:58)
That’s an added perk of coming down to Memphis.

Shelley E. Kohan (23:01)
It is. But thank you, Jason, so much for being here and telling us a little bit about what’s headed for customer returns. And we look forward to what’s being announced soon.

Jason Brenner (23:11)
Awesome. Likewise, speak to you soon. Bye.

Shelley E. Kohan (23:14)
Thank you.

I am so thrilled we’re here at the NRF show in January in New York City. I’m thrilled to be sitting with you in person, Matthew. Oh my gosh. I’m sure we do our virtual podcasting and stuff, but I have them in person. Well, thank you for having me and thank you for all the work that we did with the Crave Retail Radicals. It’s been super fun to acknowledge some of the best people in the space. So here we are again, another year at NRF. Another year at NRF. And you’re absolutely right. I love recognition. It’s the best thing about our industry is recognizing the top people.

work that people do. And now we’re in a big room of all the changemakers. I know, wow, there’s a lot going on out there. But what I’d like to focus on first of all, Matthew Sear, CEO, founder of Crave Retail. And I’d love to talk to you. So one of the things that a lot of retailers come to me and ask me is, so there’s all this, obviously, there’s so much technology here, AI, genetic AI, and all these things. But a lot of the retailers are asking, you know,

How can I then connect all this in that shopping journey? So they’re looking for this kind of connected experience with the store. Because the consumer doesn’t care how many things you’re doing behind the scenes. They just want that experience when they walk through the doors. And I know, Craig Retail, you are a pioneer in the space. You just launched H &M Dubai. congratulations Yeah, an amazing visit. Amazing brand, amazing visit.

It’s so cool to see so many different brands check out the experience and talk about, it actually works and it’s remarkable and the experience it drives. And they’re asking about, you do this insight and can you get this data point? And we get to show them and they’re like, this is what we’ve been waiting for for so long. So yeah, it’s been a really great few months, great several years. We’re seven years in business now.

And you work with some of the top brands, Victoria’s Secret, Unparma. Yeah, yeah. And we have a lot more that you guys are going to learn more about this year. I wish I could share more. But once you visit those stores, you’ll know it’s crazy. I love it. Yeah. So can you talk us through this connected store idea? Yeah. Well, I’ll I think I’ll take us back. Right. So where did where did my my my origin in retail start? A good friend of mine asked me if I could manage an Abercrombie and Fitch store.

And at the time I thought, I’m not sure if I really want to get into retail and manage an Abercrombie and Fitch store. just seemed like a lot as a 20 year old kid. I did it and I loved it. And I fell in love. I worked with Abercrombie and Fitch for a couple of years. I worked for Sketchers for seven years. I got the opportunity to move overseas and manage over 300 stores with Sketchers. And one of the things that always got to me was I would get a call during my quarterly

updates with our team to say, hey, here’s what performance was last quarter. We missed conversion rate or we did this or this happened. And it was always reactive, right? We’re sort of always saying, okay, what can we do moving forward? And then we would implement a strategy that couldn’t be measured in any way. And we would go on flights every single week to say, are you guys doing what we said? How’s it working? We would then see at the end of the month,

Here’s a conversion rate, here’s a basket size, here was a sell through, always reacting. And I thought, this doesn’t make sense, right? One, I shouldn’t be flying to go see stores that were obviously perfectly equipped to look as they should during my visit. But I thought as a store manager, as a district manager, my responsibility is every minute with every shopper. I should know exactly at any moment if we’re up

if we’re doing the right things with our customers, if we’re introducing the right products, if our performance is low, let’s just say fitting room traffic, or if we’re not engaging with enough customers, or if they’re not trying on enough products. If I have that insight daily, I would actually have the tools to impact the metric that I’m being held accountable to. And so for me, when a lot of different leaders say, what’s the connected store strategy? It’s actually…

developing a store, physical store, that’s got a pulse of everything that’s happening between your inventory, your shoppers, your store teams, what’s being bought, what’s not being bought. So you can respond to it in real time. And I feel like we’re, we’re finally entering into an era where brands are maturing a lot of this infrastructure, right? I know I’m kind of rambling on here, but I think this is like an awesome moment to be at NRF, to be in physical stores because

If you think about RFID, everyone’s chatting about RFID. So if you’re not here, that’s the theme, RFID and AI. It’s really getting blended right now. We didn’t even know the product in our store. So this idea of actually being proactive with inventory information, I couldn’t even do it then. But today, many brands have matured their RFID developments. They have the right infrastructure in place. They have foot traffic counting.

They have computer vision investments. They have task management that’s monitoring how store associates are performing. They got solutions like Crave. Everything’s now in a spot to be fully connected and we have to just work together to connect it all. I remember you told me this story and I forget the term he used, but when you have a customer coming into the store and they’re looking for something specific and if you don’t have that specific size 12 red

wide-legged gene or whatever, they leave. And you never know what. So you told me this story about a series of options and choices. Can you kind of walk through that example of what that looks like in today’s connected shopping journey? Yeah. Well, look, if you have RFID today, you’ve done the first step. I call RFID like a mirror. You finally know exactly who you are. You know what inventory you have in your store.

But the mirror doesn’t yet know if you’re wearing the wrong shirt with that pair of denim, right? It just says you’ve got a shirt on and you’ve got denim. You’ve you’ve done that part. But we have a few brands now that are really leaning into what we’re calling our out of stock demand. So this is you. Let’s just say you walk up to a denim wall, which RFID says, hey, we’ve got everything that we should have in stock and you’re looking for a certain size. They don’t have that size.

Now you’re either chasing a store team member, you’re out looking for the product somewhere else, maybe you’re trying to think about it, you’re on your phone seeing if it’s online, you walk out. You talked about not knowing information about shoppers. If you think about it, seven out of 10 shoppers are leaving your store every single day and you don’t know anything about them. And the three that do, the 70 to 30 % analysis, the 30 % that do already made a bunch of decisions.

So for Crave, what we’re thinking is, when Shelly’s in that moment looking for something, we should immediately be able to show her other products that are available in our size. We should be able to show her similar items, maybe nearby stores, in that very moment of recognizing that friction so we get you into that product. We should be saving the associate time from not having to do that manually, which computers can do that, tell you what’s in stock or not immediately.

but the brands can actually get this out of stock demand, which complements that RFID investment. One of the retailers we worked with learned that a portion of their stores were getting a lot of demand for double extra larges and extra larges. Now they’re planning, I’ve worked in planning and merchandising for a couple of years at Skechers. We would have just been celebrating a positive sell through and we just would have been replenishing as we normally would. Now we know you’re a

you might be selling through, but you missed out on selling an extra 40 units at this store because you didn’t have enough of the thing that people needed. There’s no way to capture that unless you’re directly connecting with your shoppers on the sales floor. think, you know, selfishly, Crave is a shopper engagement platform. I really believe that is the missing part to a fully connected store because we’re going to get you that insight into what shopper behavior is.

And then we’re going to help you learn did that influence to a purchase? Did that not? Did it change your buying strategy? Should you rethink about how your assortment is? Do you have to do better training? So much to learn from understanding what your shoppers are doing, whether they buy or not buy. love that. And I think it’s what I love about the Crate solution is the sophistication of if I go in and I want a, we’ll use purple, I want a purple turtleneck. You don’t know if I really want a turtleneck.

other color or if I really want purple. So by giving me the choice of here are other turtlenecks not in purple and here are other shirts in purple, now I can make a decision based on is it really the turtleneck I’m looking for or the color. And we don’t know that when a customer walks in unless they have a dialogue or they have something, right? Yeah, yeah, 100%. And it’s, stores, they’re not getting easier to shop right now.

because a lot of times they’re just not getting easier to staff. It’s a challenging market. You see a lot of stores, you know, trying to ask, do we, how do we give you that customer experience with less people? It’s really hard, right? And so I think we’re kind of at this point where you only can optimize the store teams so much. Put Shelly in control of that decision. Don’t make the assumption for her, put out on a hypothesis, figure out what she’s interested in, let her discover and curate.

right there in your stores in the most easy way possible and then get her trying it on. Because there’s nothing better than getting her into the clothes, trying it on and seeing what it’s like. And when you look at the Gen Z and Gen Alphas, and they’re coming into the shopping environment, they’re expecting to have a very easy, seamless, automated kind of answers to the solutions that they’re looking for when they walk in, right? Yeah. I think today we’re at a different point.

Everybody wants that. Right? mean, I’m sorry, but if you think that every shopper wants to have a highly engaged one-on-one experience, they don’t. Right? And those 30 % that do, great. I would bet most brands who understand that about their shopper base, they’ve got it served. But 70 % of your customers are coming in and they just want to explore and they want to learn about products. They want to understand your story. They want to make it very easy. We are all time starved today for whatever.

Reasons we’ve created we’re on a mission and if it doesn’t go perfectly we’re out right so we I think for every shopper today of all ages we have a really strong responsibility to say how do we help them control their own outcome how do we give them the tools in real time to just Help them have an experience they deserve and frankly you think about e-commerce Because they were tracking what shoppers were doing they continue to optimize that for you

The success of e-commerce has been because they know every step of your journey and they can help you make it easier. Maybe sometimes they want you to slow down to curate a whole outfit with the denim you’re trying on, but we can’t do that in physical retail. So how do we create a highly personalized, convenient experience if we’re not having any shopper touch points measured and understood as shoppers are going through it? You can have computer vision on your ceiling, but you still don’t know if Shelley needs

a red or a purple, right, a small or a large. You can know someone’s dwelling and waiting, but what do you do? You have to have touch points that shoppers can finally act on and we will be able to give you the ability to stitch those sessions together so you can finally have a digital layer of physical retail just like e-commerce does. And I think that’ll allow us to really evolve the in-store experience. I think the brands are ready, I think they’re definitely ready. I think the other complexity layer is that

the shopper isn’t consistent 100 % of the time. What I mean by that is sometimes when I go into a store, I want to get in and out, I’m on a time crunch, I have to do something with the family, and other times I want to chat with someone. So you can’t do this solution that always delivers the same for every customer because we change. We change our shopping behaviors based on the situation, our time. Yeah, yeah. That’s where I think

you know, this connected store finally gives you a pulse of that. You’re going to have, you’re going to know soon which shoppers are in here as loyal customers who are in here every other week and whether they should have a more high touch personalized experience. And you’re going to know the other one who just likes to come in your store because we’re getting close to a world where we’re going to know Shelly walked to the door and we’re going to know that she checked out and every time it’s 15 minutes, we know Shelly walks in and out.

Right? And Jenny, on the other hand, we know she likes to take an hour every single time. And she likes to talk to people because she’s one of those customers that is always requesting service, asking for help. We know what kind of service she wants. So this connected store that has a pulse of what’s happening gives us the tools, gives the store teams the front line, the tools to say, I feel equipped to do my tasks that I’m asked to.

support the right customers the right way and know that I’ve got supporting technology on the sales floor that can answer some of the basic questions so I can do my job well, which is be a human, have a human conversation with Jenny, understand her lifestyle, figure out what she really loves and wants while meanwhile, Shelly can go up to a denim wall, tap, tap, get it in her hands immediately, get out the door. We have a world now where we can create that flexibility.

That’s great. Well, first I want to say thank you, Matthew, for creating your company because you and I are very similar in that we just want to make retailers better at what they do. We want to kind of make the industry better. we care a lot. So we do. care a lot. I know we’re expecting a lot of great big announcements from Crave Retail over the next year. Anything else you want to share with us? You know, just keep testing.

You know to anybody watching keep testing and trying new things in your stores. Your customers want to see freshness. They want to see something new. They want convenience. They want help. Yes of course Crave can definitely help you with that but I’m just very excited that we have an opportunity to work with some of the best brands in the world. We’re going to continue to learn what we don’t know every day. We’re going to implement the things that just make sense. Be practical. Right. That’s why I tell my team every day. Retail is not that complicated.

People want to come into your store, they want product to be there, and they want to take that product home. Make that path to purchase super easy for them. But if you don’t know what they’re doing in your store, how can you ever make it easy for them? go back to the basics of retail 101. Make it easy to find a lot of product. Make sure your shoppers are servicing them, and make sure you’re able to measure the outcome of those changes.

awesome well thank you Matthew so much. Crave Retail and thanks for the Crave Retail radicals this year. Thank you for having me here. Exciting. Thank you all. Awesome.

Hi, welcome to Reektail Unwrapped Live. I’m so excited that I actually get to see you in person. I know. It’s been what, a year since I saw you person, a year, yeah. And we’ve connected virtually, but it’s always good to be in person. That’s right. So this is Kimberly Miner. She is CEO of Wokra. So welcome. Thank you. Thank you, Shelly. It’s always good to talk to you. I love having you here and I love the fact you did lead like her.

and also even on my podcast. But today we’re at the NRAP show in, actually the weather’s not bad in New York right now in January. No, it’s not bad. I will tell you, I got here this morning around eight o’clock and I was really shocked. I walked out and when the doors opened to the hotel, it was like this burst of cold air. But then when I stepped out, I was like, it’s not bad. The sun is coming out. This is great.

This is, think this is the best weather I’ve ever seen in 30 years. Yeah. Well, the last three years have been painful. It’s been so cold that, you know, if your nose runs, it freezes before it hits the tip. Like it’s, it’s been bad. So it’s great. And you can tell because it is packed. is so busy this year. That’s right. Yeah. It’s really busy. I’d love to talk you a little bit. I know you’re very busy and your schedules packs a first. you. Of course. For spending time with me. Of course. But I want to talk about the work.

because I know you’re doing a lot of work there. So what is going on with today’s workforce? What are you seeing out there? You know, that is a hot, hot topic. It’s a hot topic for a few different reasons. So here are some of the things that happening in the workforce. So we know that at the beginning of the year with the administration change, there were lot of changes to policies and there were preemptive changes so that there weren’t issues with certain companies.

All of that affected the workforce. It affected the workforce in that even though we’re still at a relatively low 4 % unemployment, there are certain groups that have surged in unemployment. And so one of those groups is black women. Black women are currently at 7.5 % unemployment according to the US labor statistics. And that happened because they overpopulate in government jobs.

they overpopulate in frontline jobs. And so how does that affect, right? Well, we know how it affects in the government, but then frontline jobs, we keep hearing about AI, right? And when we think about retail and we think about AI and you go to the store, how many times are you in line? Because it’s self checkout. That’s right. Right. And so those are things that we think about. We think about that with WACRA because you have to create this pipeline.

So people are being removed from the pipeline, who’s benefiting? And what does that mean for the future? And so, that’s what we wanna talk about with Workforce. And then in addition to my work with WACRA, I’m also executive director at the Ohio State. The Ohio Glad you’re so exciting. And by the way, congratulations on that. That was last year, right? No, it was July. July, yeah, last year. that’s And so…

That’s also workforce development. And so we have these young people who are so talented and so fresh and excited and passionate about what’s next. And then we also have the economic situation that’s going to affect, again, workforce development. So how do we create, I think this is at the heart of all of it, how do we create pathways to jobs that aren’t traditional but exist?

and how do we prepare people to be flexible so that they are ready when those opportunities open? And what does that partnership look like with these companies who are going to have those jobs? Because I don’t care the most self-checkout retailer, you still need customer service. Definitely. Right. And so how do we prepare or how do we redirect

those who are out there who are in the workforce so that they’re ready for those new jobs. That’s what keeps me up at night. I think it’s so important. It’s kind of like the human side of technology working together. But one thing I want to go back to what you said, which I think is really important is you talked about making sure people were ready and flexible when things came about. So it’s not this, you know, very direct linear career path.

And you really do have to be open to opportunities as they arrive or come up, right? You do. so yesterday I was part of the executive mentoring with N.R.F. Of you were. I love it. You know, I’ve been in this industry for 30 years and I found it. It wasn’t a path I prepared for. It wasn’t a path that I went to school for.

but it was a path that I was flexible enough that I was able to move into it. And it has served me very well because I was ready. Nothing, you know, I didn’t have fear that, I didn’t study that in a book. I asked questions. I was curious. And so to prepare yourself for that path, this is something I talked to this young people about yesterday. What do you look for? You know, oh, Kimberly, what do you look for? Like what’s the most important skill? The most important skill to me is curiosity.

Absolutely. Curiosity. If you don’t know what you don’t know. Shelly, funny story, I was 10 years into my career. I was at Davis Bridal. I had just gotten to Davis Bridal. was vice president of design. And I had been at Express and Macy’s. And had I been in Foot Locker? I’ve been to Foot Locker. I moved very quickly because, you know, put it in front of me and I’m like,

this Pac-Man, like what can I learn, what can I do? And so I was in a meeting and I was relying on what I knew, but I didn’t know what I didn’t know. And the CEO of David’s Bridal said to me, I’m going to need you to be quiet. He didn’t say it like that. I’m saying it much nicer than he said it, but I’m going to need you to be quiet. Why? He said, because you don’t know what you don’t know. No one had ever said that to me before because

I came into a job and they were expecting you to hit the ground running. He was like, no, you need to learn and I want to know how curious you are so that you can be better when it’s time. And so when I talk to young people or anyone who’s like, what do I do? I’ve been putting in these resumes. I’m not getting the job. So what are you putting the resumes in for? Well, this is what I’ve done. But how do we apply that differently? What questions can you ask?

If you’re curious about what your future could look like, then you should be curious about what other opportunities are available. And if you open yourself up to curiosity, you become more flexible. And who knows what the possibilities are? And that’s great for the candidates, but it’s also a message for the companies. know, so many, because they use AI,

to go through resumes and check that it’s so rigid because it’s AI and AI is not thinking, AI is repetitive. And so companies, leaders, you need that same curiosity because especially with consumers, consumers are changing now. It’s such a dynamic. It’s so dynamic. People are thinking differently. Young people, Gen Z.

What was happening on Tuesday is not happening on Thursday. And you have to think differently. So these companies need to have people in those positions who have that flexibility and aren’t like, it’s just a cookie cutter of what they think the job should be. Right. I think the other thing I’d like to see more women do, especially young leaders, is going back to your flexibility conversation is that a lot of young women

feel like they have to nail every single component of a job description. And when you what you’re saying is a little bit different, which is, you know, be curious. Yeah, you might have three out of five skills, but go for it. Don’t think you have to have that tick box of every skill to apply or to go after jobs. Well, absolutely. I mean, if I use my own like at the beginning of my career. So my degree is in radio, television and film.

I didn’t know that. Yes, I wanted to be Oprah. I did. Oprah. Well, there is only one Oprah. And I discovered that very quickly. But that’s my so and I had a radio show. I did the whole thing. Like I love that part. Like I love it. I right now, you know. So when I was interviewed with Macy’s executive training program, I couldn’t rely on what I knew. So I didn’t have any of the checkboxes, right. But the recruiter

had had enough conversations with me, he was like, you’re kind of, you’re interesting. You know, you have a sense of fashion. You kind of know what’s going on in the marketplace. You should meet some people. And I was open to that. Sure. I’ll meet some people. At first I was like, wait, retail? I can’t work retail. Cause all I knew about retail was stores and I worked part time in stores and like, I might be kind of living out of that. But by being open, I was able to learn and, and

the aptitude, you know, the testing and the interviewing, I showed up as myself and was, I think, confident enough as a young person to say, I don’t know this, but I know that. And so that message is really important to young, especially young women to your point, because most don’t do that. They don’t. They don’t understand what it is to just show up as yourself.

and be okay with asking questions. I learned so much more because I wasn’t trying to be something else. And I think they saw that. And so I just went in as a consumer. And then, you know, if it was time to change the floor, I was like, you know, that’s not selling anymore. I think it’s time for me to do a floor move, right? Or a change. And I would sit with a visual or go to my group manager and say, I want to do a change. And I would, had like,

these models that I would play with because I didn’t know any different. Right. Right. Or I went to the local distributor because Spud McKenzie was the big thing. And I was like, hey, I see young men going to these other stores. What do you have? Spud girls. They like, yeah, like, can they come to Macy’s? Can they come to my young men’s floor? And it just like being curious. I love that. And I don’t. Were you at the keynote today? I was with it.

I mean, there’s so many things I learned from him and I loved his whole leadership and the dynamic. I the diamond. I got to teach the diamond. I wrote that down. But anyway, I’m in org chart. I’m definitely going to do a lecture on the diamond work chart. But one of the things that really kind of stood out to me is when he said, listen, if you have to be the smartest person in the room.

This is not the place for you. And that’s what we’re saying. You don’t have to know all the answers. You don’t have to be the smartest person in the room. It’s the most curious person in room. The one that doesn’t know everything, that really is successful at exporting goods, Right, and you take chances anywhere. One of my jobs was nine West. And at the time I was the SVP of merchandising stores and planning and allocation.

It was weird. But they brought in a gentleman who had been with Clarks. And Bob was wolf. And he intimidated some people. I thought he was the coolest guy ever. Like, I really did to this day. Because if you were in it, so was he. And he would come to my sales meetings.

He was kind of like a consultant because he had done this for so long and they wanted to make sure, you And so I said in one of my meetings, said, oh my God, I don’t want to be the smartest person in the world. Can somebody please, and after the meeting, he said to me, he was like,

you’re gonna go far because you get it. He said, I think you do need to make some changes to your team because they are depending on you to be the smartest person in the room. So you don’t really have any leaders. Yeah, that’s so interesting. Yeah. So I want to ask you, I want to move to a different topic. Yeah. Okay. Have to say this because I know it’s all over the N.R.F. show this year. A.I. A.I. A.I. So let’s talk about A.I. and maybe how that relates to the workforce. Well, I think

Obviously AI is coming and it’s coming quickly. But if you are a person or even a company who is saying, AI is coming, I’m going to save money and it’s going to replace my team and you’re in retail, I think you’re smoking something. Because you have forgotten what’s the core of this business. The core of the business is the consumer.

And while they’re obviously it’s AI. if you want, if you have a question, if you want data about that group, if you want anything, sure, ask AI. But if you only use AI to make your decisions, then you’re not going to be in business very long, right? Use it as a compliment to the talented people who are there to think, to be dynamic and to be curious, right? What can this information tell me that I don’t know about my

consumer that will complement what I know from being out in the stores or being on a customer service call. If you’re a D2C, you can be there so quickly, get on the phone. Have a call with your consumer and then look at the AI information. When I was, you know, in planning an allocation.

Sunday was terrible because I’d have to get the reports. Oh, I remember going down and getting all those. Yeah, you go down, you get the reports, you’re reading through, right? And you’re drawing conclusions. That time is gone because AI exists. So all of that, you don’t need those reports. Here’s my prompt, here’s the information. But what you do need is you need to be able to interpret and understand that information so that when you’re making decisions.

that is what you can do. Does that mean that your job goes away? It means your job changes and it does mean that some jobs go away, but your job doesn’t have to leave if you’re prepared for that change. And how do you become prepared? It’s a wa-wa-wa. Ohio State just introduced AI training as part of their curriculum, but they just did it.

There are lots of programs out there. I will tell you that you learn the best by doing it and don’t be afraid of it. You know, there’s so many different things. If you want to start with chat GPT, start with chat GPT. I always talk about someone introduced me to perplexity. yeah. Love perplexity. You can ask perplexity anything. And now perplexity even gives me updates. Right. So that keeps me informed. But there’s so many between Gemini and

co-pilot and Claude and you know, I don’t even, it just goes on and on and on and on. You can do graphics, know, Canva is met when it comes to the AI, but there are some other programs out there that are fantastic. You know, I needed a new headshot and I couldn’t get it with my photographer. Seriously? Your headshot’s AI? It’s my actual picture. I love it.

And then I had a picture of my new hair because in my old picture, my face is the same, but my hair is short and it’s not gray. And as you can see, I’m gray. And so I went in and I talked to a photographer and I said, well, how do I do this? Because I don’t have time and I don’t want people to walk past me and not recognize me. And they told me, you know, put both in and just tell them, keep, you know, prompted to this. This is what I want to maintain my face, my spuddle, and replace.

this with that. And so my picture, I mean, it looks like me. It’s just, have new hair, right? And I changed my suit. That’s great. So what excites me most about AI in the workforce is that the what if scenario. So like if you’re working in product development, you’re working in marketing, like if you gave me a marketing task, I would go and do it I would make me give you two or three different versions because that’s all the time allows. Right. But now if you have all this resources,

I can come back with 30 different versions and I can pick out the three best for one campaign, four best for another campaign. And it’s like, all of a sudden now, I can do genius work because I’m not limited by time. That’s exactly right. And if you know how, you can make AI your partner. Because in addition to all those options, you can say, OK, this is my desired outcome. Which do you recommend?

Exactly. And they will give you all those options. It doesn’t tell you which one to choose, but it says, here’s my recommendation out of five options. My recommendations are option three and option five. And here’s why. I love it. It’s the best. I if you’re afraid of it, it’s the worst. No, you got to play with it. I encourage everyone to play with it. Play with it and understand how to make it your friend and your secret sauce.

Right? Like what’s your super power, what’s your AI superpower? So then when you’re walking into interviews, you can say, yes. And in addition to this, here are examples of how I would prompt that or how I might use AI to enhance my role. Because people want someone who’s thinking ahead and is looking for that white space so that they can move their business forward. So use it as an advantage. Don’t be afraid of

I agree. Well, Kimberly, thank you so much. Thank you for having you. And I look forward to seeing you around the show. And of course, I’ll see you hopefully in Columbus soon. Sounds good. Thank you very much.

I am so excited to be here. Shelly Cohen, Retail Unwrapped, I have Marie Driscoll here, which is very exciting, live and in the flesh. Thanks, Shelly. Great to be here with you. I am so happy to have you here. So you don’t need an introduction because you’re so well known in the industry. But Marie Driscoll, founded Driscoll Advisors. But this is the second year we’re here at the NRF show. And this is the second year you’ve been…

a NRF retail voice. Yeah kind of amazing right? I talk too much. No that’s not what it is. It’s your are such a impactful voice for our industry so congratulations on Thank you. you. And of course you’re a retail expert by Rethink Retail and I could go on and on and on.

And selfishly, I am going to say one more thing. That is your professor and you’re helping to educate our next generation of students. So your professor at Fashion Institute of Technology as well as Parsons and… At the City University in New York too. The City of New York, okay, that’s fantastic. So thank you for helping to bring the next generation of leaders forward. Thank

You too, same thing, right? Right back at you. So today, I’d love to, so last night you did a LinkedIn post which was fantastic, talking about what you’re seeing at the show. Yeah, I am like…

I’m so excited coming into 2026, right? It’s like, feel like it’s the new next, right? The next new. Very excited, like we’re moving so rapidly. Last year was such a crazy year with tariffs, right? Like you could never get ahead of yourself. AI was talked about all the time. This year, I think we’re really going to see some AI really at…

and I think we’re finding some really practical ways to use it and it’s not just about the CEO going pushing it down to everyone it’s like he’s saying yes we’re buying in but now pick the right spots for it and is it it’s not necessarily right in each in each function of retail. No you have to pick and choose based on the company right? Right, right. But so like what I heard that I was so excited about was like

you know, at Dick’s Sporting Goods. It’s like, I wrote that they’re the next American department store in a good way, in the fact that so many people are walking through them. They are a reflection of the culture, what’s important to the culture, and the more they assort to that woman who’s buying for her children, the more their sales are gonna grow. And they’re opening more stores, they’re opening bigger stores. And I think that, you know, culturally with the focus on sports and the

focus on wellness, this is an amazing place. And I can see how this is becoming so exciting for shoppers around the country. And there’s a real focus there on team. The CEO said, you know, the higher you go in your corporate ladder, the more you should listen and not talk. I love that. Right. It’s a good one. Right. You want to hear what the consumer is saying and who’s hearing that? It’s not the CEO.

But that brings me to a point, I saw a panel that had Mango, Victoria’s Secrets and Coach on and at Coach they’re going back to basics, customer insight, which has been part of their DNA from, you know, from 19…

1980 when Lou Frankfurt went over but now it’s not in just the silo of customer insights. It’s the CEO and it’s the brand presidents going to customers homes, spending time with them, seeing how coach fits into their life, not how we’re gonna put this on your body, right? And it’s such a different, you know, so it’s a mindset change and that’s what I’m hearing.

And that’s what’s so exciting. That is exciting. have to I have to remember back. So remember Samsung when they were making refrigerators, right? They would actually go into the home of the consumer and sit there and watch them. And they would ask questions like, why do do this or why do do that? So when they designed the new refrigerator, it had to do with how you’re actually using it. So coach is now doing this, right? Which is very exciting, right? That’s where it all starts. Right, right. One thing and the woman from Victoria’s Secret, you know, we’re we’ve

watched Victoria’s Secret do a turnaround. The woman from Victoria’s Secret said, you want to, like, you

to focus on where you can have the momentous occasions, not the marginal occasions. that’s where… interesting. build to your strengths. It’s easier to make good better than it is to make bad good. Right. It’s like make good better and keep doing, and it’s iterative. And that’s what’s so exciting about retail, right? It’s like every day there’s something that you can learn from yesterday. And that’s what…

Shane Greenlee, who was from Mango, that’s what he said was the mantra at Mango, which has opened 50 stores in two years. They’re at like 63, they’re opening more. like, how do you do that? He’s so invested in his associates. And everybody is talking about being in the store more. And for me, with like…

say, you know, 75 to 80 % of sales occurring in the store, you do have to know what the consumer is doing in the store, what matters in the store, and can we capture some of the data that’s happening in the store? Absolutely. Right? So I kind of look to you as kind of like the guru of luxury, because you really cover a lot of luxury. So tell me what’s going on in the space of luxury. Right. So, you know, luxury really got ahead of its skis in the last few years in terms of pricing. mean, COVID

like brought a whole lot of new, new swath of buyers, partly because they had nothing else to do. Luxury created this ba-boom experience. And in the dearth of experiences that we had in 21 and 22, luxury was a place to go and get it. 23 and 24, they started to move away as they got back to traveling. They got back to eating out. They went to the theater. And then you all of a sudden had inflation.

at 23 % inflation for average customer goods. And for luxury, they were increasing prices like that. So if most people play in luxury via handbags, footwear, beauty and…

sunglasses, those kind of accessories and beauty. With prices up, sometimes double digit and more, it’s turned off your true luxury consumer and your aspirational customer who is saying these prices are too high, it’s not worth it. At the same time, the quality deteriorated. So it really became, so for a true luxury customer, it’s like…

So the handbag went from $6,000 $12,000 and it’s not as good as it was when, you So that customer, it’s opened the platform for people to consider new brands. And so if you go into Bergdorfs, if you go into Bloomingdale’s, there’s a whole swath of new brands that are, you know, in terms of apparel pricing.

under $3,000 in terms of handbags under three, the same thing. And this is like, number one, they’re new and fashion is about newness. Luxury can be about heritage, but it’s gotta be fashionable too. And I think it’s like another thing that happened to luxury, Like really this…

dovetailing of so many different events is you’ve got with sales stalling in 23 and 24 like really flatlining in 24 and 25 and when you think that there were price increases units were down profits were down so maybe this year they’ll stabilize and start up again but with

With that happening, you had the executives at these houses of luxury brands move around the designers. And so the designers are doing musical chairs.

And so as a consumer, you’re saying, well, do I follow them or do I stay with the brand? like, why not? It kind of is, there’s a certain amount of cognitive dissonance and well, let me look at some other brands. And there are other brands now.

And you see them online, you see them on the arms of celebrities, you see some influencers talking about them, and then you see them at Bloomingdale’s and at Bergdorf’s and at your luxury department stores. So let me ask you question. Is that aspirational shopper?

still there? What happened to them? It depends what strata they are of aspirational and really there were I remember coming to NRF two years ago and

the president of America’s from LVMH was on stage and he said, and he was contending with questions about, you know, the consumer is hard hit with inflation and all these other categories. Is there still room for luxury to grow? And he said, we like to think that luxury is sticky. And luxury is sticky because it’s the best quality unless it deteriorates, right? And it does have this emotional component.

and it can make you feel sated, right? It’s not like fast food, I want another, I want another, which is what fast fashion does, right? But there were a lot of people that entered the market that really, maybe they’ll buy one bag a year if they buy that. And maybe they won’t, you know, maybe they won’t go back to the bag they bought in 2022 and 2023. Maybe they’ll explore. But certainly…

You know, like, the econo… I just sat in on the economic outlook here at NRF, and we have a kind of K-shaped economy. People in the middle are squeezed, but they still have 401Ks, and the market has done so well that there is this wealth effect that’s hitting middle and upper income. And the spending is happening amongst upper income. And upper income is like anything from like 160,000 on up.

And they’re probably driving a lot of the business, but they’re also spending on travel. Like Americans were not your true luxury shoppers. They bought luxury sporadically until COVID, right? Our luxury was European.

China drove the luxury market. And I didn’t even talk about how China and Russia kind of got out of the market post-COVID. Right. And so there’s been a lot of impacts that have hurt luxury. And this year, while they all are not coming together, I think we’re sitting in a better place. No, that’s good to hear. So the other thing I want to ask you about is, so you have a very interesting perspective on brands versus retailers. So talk to us a little

bit about the difference between the two. Well so you know a lot of brands are direct to consumer which makes them a retailer. Right. But a retailer, what’s the expertise that a retailer has to have? They have to understand real estate, they have to understand hiring people, and they have to understand

They have to curate their store to their local environment, to their local customer. They have to understand merchandising, promotions, right? All that. It’s like a lot. Branding, you go and work for a brand and you have a singular point of view. You understand the dream. And Shelly, you probably know from years in retail that if you went to like a Ralph Lauren…

showroom, you had ambiance that you get at the flagship, right? all the, and I mean any brand would do that for you. Like if it’s a swimsuit brand, they have waves in the back, and they have surfboards, you know, My tie is on the corner. But when you put the brand in a store that sells many brands, it’s totally different. And retailers do that.

And retail, and one thing that brands don’t always do well is their own retail, because they understand how to make a dream that’s kind of static. They manufacture, they make beautiful product, they have great marketing, but now they’re in front of people, and how do they sell this to somebody else? That’s a real skill, right? Not everybody knows how to, it’s one thing to draw the wonderful pieces and engage people online.

And I’ve seen so many brands that are incredible legacy brands. And I don’t mean necessarily luxury, but that when they open stores, they don’t know how to talk to people. Yeah, it’s so interesting. Yeah. So you’ve been doing analysis of our business for a long time. Decades. Yes. So tell me, as you look into 2026, what were some of the key things that you are finding?

consumer perspective going into 2026? So from a consumer perspective, I think the consumer is sitting in the best seat, right? It’s like there’s so many choices, you have so much optionality, and I think that retailers are really creating services for their customers. I think, think about Nordstrom. If you spend a certain amount in Nordstrom, they have an icon lab.

You get to go there as often as you want. And I don’t mean that you have to spend a lot of money. You go there as often as you want. You can have a free drink.

in a room that has windows overlooking Broadway. And there’s TVs there. And you also can have a little snack and a little order. You can meet your friends there. You get a little reprieve and then you go back and shop again. And I really think that, like, oh my god, this is so hospitable. You also get, at that level, like $300 worth of tailoring.

my gosh, how convenient is that? Now at Loomingdale’s, they have incredible loyalty programs and you start getting involved with that as soon as you buy anything there. And at a certain level, you get free gift wrapping. So like I could go shopping with you and you buy something for your mother and I say, come on, I want you to wrap it for your mom, right? And all of a sudden you have this beautiful package. And I don’t think…

You know, I think it’s about value now, but value is not price. Value is a unique equation of quality, experience, service, and that, you know, that…

intangible. That’s right. You can’t put like a specific description on value because it changes by consumer. And by the day. I know and what I’m doing at that precise moment my value changes whether it’s convenience or whether it’s something else. Right, which is like why when people think that they you know you can use agentic AI to make decisions for you it’s like you know I’m more comfortable really personally.

putting something on auto replenishment because I know that I need the toilet paper, the cat food, the cat litter, and I never get it exactly right. I’m always over or under. too. But to put on agentic AI…

Like I once was unable to buy what I wanted on eBay and it’s like I set a price and it probably sold higher. Well, you know what? I would have been willing to pay higher. Should I have given that to AgentiK AI? I seem to have, but if I knew I only had to spend another $10, I would have. Another $100? I don’t want them bidding me up.

So for the consumer though, there’s so many, I think that there’s so many different choices, there’s so many different places where you can buy, there’s marketplaces for you. I think, and for retailers, how do they make money in this environment? And it can’t be through promotion. Like, we write for the Robin record.

Robin Lewis would always say you can’t cut your way to profitability. It’s a race to the bottom. That’s what he used to say to me all the time. It’s a race to the bottom. And it’s that’s… horrible. Right, right. And somebody, the woman at Victoria’s Secrets yesterday said we are speaking to her emotionally. That’s what David Lauren at Ralph Lauren says. We’re not talking to them about promotions.

talks about promotions. You just, like, once you go there, like, it’s hard to come back, right? And you can spend a year and a half trying to get your customer not to expect sales and, you know…

You’re comping the comp, it becomes harder and harder. People lose jobs because they did promotions and then they’re not comping them. But it’s been also so wonderful to see on stage a mango that is kind of new to America and a new brand, relatively here anyway. On stage with…

longer time American brands, and Victoria’s Secrets, both of which have maybe walked away from their consumer, like Coach was guilty of too much promotions at a time, but they’ve turned their business, which is like… It’s amazing. It’s a great story. But it shows you how retail is dynamic and organic and it’s not static. And with people, if you listen to your consumer, can…

Pull it together again, and and here’s the thing with brands. They’re loved they are much loved But but I will say that retail brands like Dick’s Sporting Goods like Bloomingdale’s and Macy’s and more they are loved brands

And they’re retailers, but they’re brands too. Absolutely. So I think to sum it up, value, very important going into 2026, community, creating a community and then that in-store experiential retail that kind of bonds the consumer to the brain. Right. And of course, like online is super important. Make it frictionless. it so easy to connect with what I’ve seen in the online, in the store, even though

We know online is an endless aisle and in the store there is space constraints, but connected. Yep, connected retail. Thank you, Marie. It’s been great having you here. My pleasure, thanks. Awesome, thank you. You’re great.

We’re back on tradition. Oh my God. I am so excited. We’re here at the N.R.F. show, Retail Unwrapped. And I’m thrilled to have, this is like tradition every year for what? years? Yeah, it’s been a few I’ve had you on. So this is Dominic Miserandino. never Miserandino. Miserandino. He is the founder and CEO of RTM. RTM. Retail Tech Media. Next. got it.

Tell me what the heck has been happening over the past year. What are you seeing? I’m dying to hear your insights. It has been a whirlwind of a year. I have gone to 15 conferences this calendar year. 15? Yeah. I’ve done Boston for the Day kind of thing. I’ve flown all over. is conference back to back.

In the industry I’ve seen a lot and our business RTM Nexus has gone crazy. I’ve done also a lot of facilitation with retailers helping the conversations on the C-suite. that’s really given me insight. What’s happened? I’m dying to hear your insights from that. Yeah, on the facilitation side, the job is just getting them out of their silos. And I think what happens, I’ve seen this for 30 years. There’s something new.

Could be anything, social media, new media, Google, our retail media networks in general, and AI. And they all get siloed in that. I know, right? It’s so true. And they almost forget, and you just have to get the conversation going. Why did you start this business? What is the thing the customer wants? And that’s why I always lean towards experiential, because at the end of the day, the customer wants to be happy.

When I saw you today, I was happy. You see things that makes you happy and that’s the purpose of this. Anyone go to Amazon or Tmoo and press a button and then put the joy. That’s the whole purpose. And that’s kind of what I’m doing the facilitation with these retailers. All I’m doing is encouraging the conversation saying, what do you see that makes the customer feel joy essentially? So tell me a little bit about what experiential retail means to you.

and how that translates into our industry over the next year? I think we have evolved into a non-experiential transactional, meaning DoorDash, press the button. Uber Eats, press the button. And the consumer is saying, yeah, that’s awesome. But sometimes I like a pop-up. Sometimes I want to know. I recently bought a tux. I was very fortunate and went to the Fashion Gala Institute’s big event in Rainbow Road.

yeah. So I had to get the tucks and everything. And the experience at the suit supply made the difference. you walk in, here’s the coffee and here’s, let’s help you measure you and here’s your measurements whenever you want to get anything. And in fact, the sales guy said something like, we need to get this and this, just use our measurements. So I thought it was brilliant because the non-sale use our measurements elsewhere, encourage the sale. But that’s been since the dawn of time.

in retail and sales and in business. Experiential is a human connection. And with that being the priority, sales work. Yeah, I have to say I was recently in Lululemon and there’s sometimes there’s like a small disconnect and I love Lululemon. I love the product. It’s great. It’s awesome. But I was in Wall Street having a day with my son. Yep. And so we went to Lululemon. I bought two things. They needed to be hemmed and I can sew. I can do my own sewing. So I was going to sew it.

And she’s like, we have them for free. I’m like, yeah, I know that’s great, but I have to come back here to pick it up. See, that’s a disconnect. Like it’s great that you’re offering that service, but I live, you know, 40 miles north of the city. I’m not gonna travel two hours to come pick up my, I’m gonna have them myself. So it’s disconnects like that, that retail, like I would rather pay $5 for them to ship it to me, hence, than give it to me free and have me come all the way down, would quite frankly cost me about $40.

It’s funny you say disconnect and connect because that’s been I think the secret to success with RTMnext is what we’re doing is the connection. I will send for our events. I will conservatively send a hundred texts. I’ll wake up, wake up at 6 a.m. schedule them for 9 a.m. so no one thinks I’m crazy but it will be personal. I reach out to you. It’s been a while. I miss you. How are you doing? And people want that. I think we’re in this world especially with AI. Dear

Shelly, how are things going at Robin Report? Good. And you can sense it. How often do you have kids who say, my daughter will do it all the time. that’s made by AI. We know it in our gut when it’s not authentic. And the reality is we crave connection as humans. We would not be alive. If there’s any differentiator, and I’ve lectured some students about this at Aon.

AI in general, the differentiator is the authenticity and the connection. It’s very good at non-authentic. It’s really good at press the button, door dash, have a nice day. So like when I’m putting on these events, the reason I think they’re working or when we do the webinar, the people attending, I’m reaching out. Shelly, this will be of interest to you because of this, because I remember the time we sat and talked and we had this moment.

You have to seek those emotional connections of humanity. So how can retailers on scale think about on scale, how can they humanize? Yeah, I think first of all, scale is the key. That’s the cause. And we, from a business perspective, with every reason, look at it from the perspective of scale with the non-humanness. To me, the trick is, when I was CMO of AdoramaPix, CMO of AdoramaPix, I literally said,

give me a list of our top 200 customers. Now I can’t reach everybody, but I called on the way from Long Island to Brooklyn customers. They thought I was nuts. Every day, every day, I got through that 200 and I wanted a call. And part of it was using their data to implement. What do you want? we want, I’d love to see a tour of the factory. We’ll make a tour. What do you want? I want a better coupon system. We’ll figure that out. I want to feel like when I call the office,

I’m getting an answer. We’ll change that system. Now, I couldn’t reach all. There was just no way to reach the tens of thousands of people. I could certainly reach a few hundred and use that data to start to infer. And then I think what happens, at one point we were also doing weekly Facebook lives talking to the customers. You can infer that. You could say, hey, you know, I reached out to everyone and this really means a lot to me.

I think that’s the trick. a lululemon or something. Maybe you’re talking to the customers and they’re saying, you know, I had to get the measurements and it really drove me nuts. And the solution to that is we’re going to train the whole team and we’re going to make an announcement. You need it. We’re going to guarantee we’ll get this measurement done in this time. And you’re addressing that human need, which I guarantee your human pain was felt by others. Oh, I’m sure. Yeah. So you identify the individual needs.

and magnify it on scale from the business where applicable. Now the challenge becomes when it’s difficult, but you can work towards that goal as much as you can. Say, what is the generalized human need that I’ve learned from talking to people? It’s sitting on a lobby. You know, the other thing I did, I’m sorry to give two answers to it, I feel passionate. You can give three Oh, well, try. I sat in the lobby at Aderon Pics. I took my laptop and I sat in the lobby where people were walking in.

worked like a normal day and I’d listen, watching. I studied Yiddish. And I did it to overhear the Orthodox community. I wanted to understand what are they saying. Then you start to hear the same words. You know, what is, hear, wait, that woman said this, this woman said this, this woman said this. What does that mean, that word? I don’t know it, but can you help me out here? And too often we’re in the ivory tower, 50,000 foot view in the air, but it…

That logic doesn’t make sense to me at times. You still have to take your product, throw it against the wall, walk in the store, buy your product. That’s a necessity. It’s a complete necessity to it all. So tell me, what is RTM RTM Nexus. And what are you doing? Yeah, retail, tech, media, Nexus. We’re connecting retail, tech, and media in general. I always felt the equation. I’ve been on the media side of the world at first, getting pitched by the retailers.

Can you cover my this or this or this? And then I noticed you almost, I feel like there was a line, the B to C and the B to B. There’s definitely a lineation for sure. And I noticed I was well aware. So the retailers were calling me for traffic, for how do I sell the product? How do I get more sales? And I’d go in and flip over e-commerce companies left, right and center saying, this is how you scale it up.

The B2B side of that delineation, I know it was not talking almost to the consumer. From the media side, I started seeing the voice of the consumer. So retail tech media, we’re connecting the retailers to the media. I’ve gotten retailers on TV and I’ve gotten the board jobs and I’ve helped retailers get their career further. On the tech side, we have tech companies calling us saying, how do I connect to these retailers? So with Nexus being the connection amongst them all. that, that’s awesome.

It’s been going really great. I’m really happy with the number of events and the number of webinars and our newsletters at a record level, our podcasts is on a record level. So it’s been good. That’s awesome. Any closing thoughts from you today? I think I’m thrilled being here at NREF with you because it’s reflective of what this industry needs. It’s people. It needs that moment that I texted you saying, come around, let’s talk. And you texted me.

Let’s get together. Let’s do it. And that energy. Imagine if more people in retail said, hey, you wanted that product this morning. I found it on the shelves and I’d love you to come in and I’m so sorry you wanted this or that. Oh, I miss you. It’s so good to see you. We need that connection. Definitely. I also see a lot more collaboration in our industry, which is great. Let’s collaborate. Awesome. Well, thanks for being here. Thank you so much. Awesome. Thank you, Dominic. Awesome.

Hi, Shelly Cohen here, Retail Unwrapped. I’m so excited. We’re here at the NRF live in person. have Gary Sankrey with me from Esri. Yep. And he manages the industry solutions. For the retail industry. For retail. So we’re excited to have you here. So let’s start by tell us a little bit about the company first. OK. And then I’ll ⁓ ask you for some insights.

We do mapping, geospatial analytics. We help retailers understand why things happen where they do and we help them.

it’s a good thing, it happens more often, and if it’s a bad thing, we try to mitigate the bad stuff. Excellent. So when you talk about this location services, is it inside stores, is it outside stores, is it across the board? All of the above. So everything from global all the way down to the neighborhood down to inside the store. we’re all about maps. The scale of the maps ⁓ is really irrelevant. It’s all about taking data and applying it into the map.

That’s great. So tell me what have you been seeing over the past year? ⁓ So really it’s all about localization, right? So if I take my role at Esri out of the picture, retailers have really come to understand that localization, personalization is critical, right? ⁓ I write that up because I know like, especially in the United States.

I come from Target, so I was at Target for like 30 years. in that role, I mean, we were opening 200 stores a year, and when you do that, you can cover up a lot of seed. We don’t do that anymore. Retailers in general aren’t doing that. But they still have the same growth expectations from their shareholders and from their management that they had before. So to be able to do that, you’ve got to do more with the locations that you have. And the way that you’re doing that is what…

Esri and with ArcGIS you’re able to bring in geographic data and look for discrete correlations to help you understand again why is this store performing this way? Why is that store performing that way? Why is that particular category? Who are my customers here? What do I think they’re going to like based on the demographics, based on the psychographics, all that kind of stuff. That’s amazing. So you’re looking at lots of data, you’re analyzing the data and then you allow

retailers to make real time decisions based on that? Exactly. So they can bring, so the retailers can bring the data in and they can.

reflected in a map and looking at different layers. So I came over from Target, I actually didn’t know what Esri was, I didn’t know what GIS was, but I retake really well. And what I learned to kind of settle in on, and what I’ve realized is secret sauce for what we do, is this ability to bring in all of this kind of disparity in it. So if you think about a store, all right, so I’m going back to, know, grocery chain ABC.

store that’s in a particular market. I’ve got a bunch of data that tells me about the lifestyle of the people around that store. I also have data that tells me where the people who shop in that area come from, so I can also apply that kind of information. I might have data about product performance. I might have data about my competitors, all different kinds of things. It’s all in a geographic layer, and I don’t have to normalize it in GIS. I can use location as that unstructured join and use that label.

in that data. That’s amazing. And so do you create like a dashboard of some sort that retailers can use? So we create dashboards. We also just create geospatial announce, so create a hotspot. I can throw that hotspot into a dashboard. I can also create a story map that tells a whole story to help them understand, like how they… One of the variables is the temporal changes that happen in a story.

So what are you most excited about for 2026? Well, all right. So I see this. There’s a little bit of a gentic AI down there. Just a wee bit. The entire two floors of the Javits. But I think what I’m what when I think about geo AI, because we’re right in the middle of that.

You know, I’m an old guy, so I’m slow adopter, but I really think what it’s doing, it’s not, I’m going to be an outlier here and say it’s not going to, there’s not innovate, what drives retail success is innovation and design, in my opinion. But what the AI is helping us do is really expand the scope of the things that we can look at. So in our case, I can bring even more data sets and find correlations that it might have taken, I may have never stumbled across. And I think, you know, when the AI,

GEOAI is really cooking with gas, which we’re there, is it’s going to be able to say, I ask it a question like, ⁓ want to know where’s the store I can sell really high-end lifestyle products, and I think it’s going to be a store that’s in a high-income neighborhood.

When it’s able to come back and say, know, yes or no, but here’s two other things you didn’t even think about, you might want to consider as well. That’s what I think is going to be revolution. That’s very helpful.

so what else would you like to add anything else that you would like to add in terms of what great work that you’re doing and how you can help retailers be better retailers? ⁓ Well I think the other thing that I’m really excited about is we’re really getting ⁓

into the world of loss prevention asset protection. So we talk a lot about margin growth and sustainable growth and now taking a look at, if you think about all the law enforcement agencies out there are all using GIS, they’re using it for dispatch and that sort of thing. I can now use that same discipline at a retailer. if I’m a retailer that has an asset protection loss prevention team, I can use our tool as a sensor platform so I can be able to see where my cameras are, I can be able to see where I’m getting hit and look for patterns.

types of activities to do the same sorts of analysis to say either to help with prevention. Right. Like I mean today I walk when I walk back to my hotel and I dive into a Duane Reed and it’s like I’m not buying anything here because I got to find something to unlock every one of these little things. do I need that in every single store? Well yeah you do. ⁓

you don’t need it by category and the GIS can help you figure out how you can still preserve a comfortable experience but at the same time try to manage some of those negative things that are happening in your store. Yeah that’s very frustrating especially when you’re trying to shop and you go to stores and you can’t get to the product the customers just walk out or they don’t just get it online absolutely and have it delivered to their door so they don’t have to go through that frustration. That’s right and then you miss out on all of the up sales.

The market basket goes away, which is a bad thing. That’s right. Oh my gosh, so it’s been great. Anything else you want to add? No, I’m just delighted. This is, know, this is I’ve been here. Trying to keep lost town because I came here as a target guy and now I’ve been coming for 10 years. The Esri guy. This show is always kind of a highlight of it. They could move it two more weeks into January if you want to, but it’s really it’s it’s just always I’m always coming.

find something to get excited about to work on for the year. I think I’ve been coming for like 30 years. Yeah, I think I’m at 20. Do you remember back in the day it used to be shelving units and POSs? cash boxes. Yeah all operational stuff and maybe a solution provider too in the back corner. Absolutely. Yeah. What’d you do at Target? I was in the merchandisers organization so I did I went through the buying ranks. That’s awesome. Yeah and I did the I went in a merchandise.

I ran a plan a grant team and store planning. I’ve won that. That’s great for what you’re doing now. Yeah, I understand the back of house piece of it. It’s been fun and you know. My daughter just got her first job out of college at Ann Taylor and I told her congratulations. You’re now the fourth generation. Sankrey in the retail bits. What school did she graduate from? University of Delaware.

Congratulations. Like many most retailers not in retail, but not in business. She was an art conservation major. Here she is. She’s excited. Well, thank you so much for being here. nice to meet you. meeting

Hi, Shelley Kohan here, Retail Unwrapped. I’m very excited. have Tim Robinson here with me, Senior Vice President of Commerce of Blue Yonder. Thank you. Yeah, very delighted to be here. I’m so excited because you’re here in person. Here in person. How rare is this? I know. I usually have all my podcasts that are virtual. So I’m so thrilled to you here I’m pleased to be in New York. It’s great. And the weather’s not bad. Weather’s not bad. Yeah, it’s a bit British. It is. very familiar. It’s a bit gray and damp, but no, very good. Yeah, you’re lucky. Last year was like a mess. Yeah.

So what I’d love to talk to you about today is so returns. Yeah, you got to talk about returns in January, right? Because that’s that’s a big problem for a lot of this is the sweet spot as they say So tell me a little bit about what you’re seeing out there and you know, what what’s different today? Then say a year ago holiday. And what do you what do you look for in the future? Yeah, so I mean, it’s a great question because I think returns, you know as a subject in retail supply chain is very hot

You know, so there’s a lot going on. There’s a lot of investment. There’s a lot of talk. And I think that’s because ultimately there is a lot of opportunity. There’s a lot of opportunity to do things better. I’d say the thing that’s changed the most for me is ⁓ there’s been a real shift in the last couple of years from ⁓ returns being a kind of customer service challenge, a customer experience thing. You know, if you’ve got to create great returns experiences so consumers continue to shop in your stores.

And whilst that remains very important, returns now are being seen as inventory, the thing that they are. These aren’t wasted items that you can’t resell. This is valuable inventory. definitely. Exactly, yeah. And so therefore, there’s been a real shift from how can I dispose of these returns as low cost as possible to how can I harness these returns, understand what I’ve got, get them back into stock, get them back out there for full price.

And so if you think about what that means from the supply chain and what that means from a, well, almost like philosophy, philosophical perspective, there’s, there’s a lot more to do ⁓ in order to, in order to resell a returning item at full price, but the industry has all the data. We have all the information. We have all the capabilities about just putting it in the right place. So this year we’ve seen much more widespread ⁓ use of kind of data, data science, analytics and AI.

as tools to manage your returns challenge. That’s amazing. Yeah. So I’m anxious to hear how that’s happening because I know that there’s a lot of consumer behaviors that don’t help the whole return scenario for retailers. Yeah. You know, bracketing, the ordering more sizes, the colors problem, size problems. There’s all kinds of reasons for returns. how can we work better as an industry?

to get those returns more manageable and are you now using AI? Yeah, definitely. So I would say as a first principle, the vast majority of returns exist for very good reason. Because in order for consumers to shop online and to have the best experience, you do want to try different sizes on, you want to try different colors, different fits and that sort of stuff. And so they do exist for a very good reason. I think there is a danger in the industry that we do, we end up talking too much about bracketing.

because it’s a tiny, tiny proportion. really is. I’m not saying you don’t have to address it, but it’s a tiny proportion. The vast majority of returns exist for very good reason because they drive up sales. They drive consumers to your online journals. when I think about what’s the consumer’s role in all of this, I think it’s about if we can give consumers better visibility of what’s going to happen to your returns.

and give them choices that allow them to behave in a way that reduces the impact of that return, then I am absolutely sure that we will see exponential change and exponential benefit. If you think about, you know, I’m old enough to come from a world where back in Europe, you didn’t have to wear a seatbelt. You know, it was your choice, you in the car. And of course, over time, that changed, legislation changed. But ultimately, it was societal.

shift. was, you know, you’re behaving poorly, you know, you’re being irresponsible if you don’t wear a seatbelt. And that shift happens. And how did it happen? Well, in Europe, it was through very overt campaigns and the spreading of information about what happens when you hit a car and you don’t have a seatbelt on. You know, it became very, very, very, it became sort of a big topic, much talked about. If you think about the return space.

you know, we might complain about, these consumers, you they buy four and return three. Don’t they know what’s going to happen to their returns? Well, no, they don’t. They rely on us to make sensible decisions and do sensible things to deal with their second life. So I do think like changing, giving more visibility to consumers about what might happen to this item. If you want to return an item, if you’re prepared to drop it at this location that allows us to put it in this, you know, it goes into a location where it’s going to be resold and maybe that’s free.

But if you don’t want to do that, that’s inconvenient. You want to drop a return this way, that’s actually going to cost us and our business money and you’re going to have to pay for it. But give visibility and transparency because it’s all there. The data’s all there. I love that. Well, first, I love the fact that your whole mindset is so different on returns. Like you actually feel like the customer should be able to try multiple things on. It’s part of the sales. That’s what drives the sales. Yeah, definitely. And I do think our industry is kind of like trying to figure out the all the

challenges with returns and trying to change consumer behavior. That’s not just that doesn’t work, right? No, no, not at all. I think we can influence consumers to modify their behavior, but the core behavior that creates this challenge is important. And it has been a huge driver of the growth of e-commerce over the last 20 years. And so, you know, if you weren’t able to return items.

free cheaply or for free or readily, then this industry would not have grown at the rate it’s grown and it would all look very different. This hall here at this trade show, the stands would look very different if e-commerce didn’t exist. And so we’re back to a day where it was all about point of sales and tills. So ⁓ we’ve got this great industry now built up on the back of changing consumer attitudes and demands and behavior. I think what we’ve got to do is we’ve got to rely on consumers to give us accurate information

the data we need in order to be able to do the right things with returns. It rely on them to behave differently when we provide the information. So if we provide information about this returns route is a more expensive, more impactful returns route. Let’s tell the consumers that that’s the case. If that’s what they need to do, then that’s fine because need is needs that exist. But let’s just give the information and then let’s do what we supply chain professionals should do, which is

use data to make sensible decisions to reduce our impact and increase our profits. It’s of no different in that regard. is. Let me ask you question. Are you seeing in terms of the consumers? I’ve read and seen a lot where consumers are making choices about where to shop based on return policies. Are you seeing that? Very much so. that’s a that’s a real trend. That’s a real trend. So we did a we did a survey recently of consumers across the US.

Australia, Asia Pac and Europe. And that was a resounding finding, you know, that nowadays one of the big drivers of not just where I’m going to shop once, but maybe loyalty, you where I’m going to repeat shop is down to the returns policies, how strict they are, you how many choices I’m given for returns drop off. Does it cost me? Doesn’t it cost me? All of those things are big factors in modern consumers deciding who they’re prepared to spend their money with.

⁓ And you know, I get it. I can see why. Because I think, ⁓ you know, the point we made earlier on, it is very much part of the experience now. It’s part of shopping online is being able to behave in this way. But also, I think it’s a trust thing. Definitely. Because it gives the consumer the sense that this retailer trusts me. They trust me that I’m not bracketing or they trust me that I’m you know, I’m not I’m not sort of just behaving badly. They trust me that this is what I need and therefore they’re going to react to it.

Yeah, it kind of does drive me a little crazy when retailers create policy around the exception. Yeah. Oh, it’s literally it’s it kills me. Yeah. Like designing a policy or a process or a system to deal with the 1 % or the minus 1 % of, you know, less than 1 % of consumers that might be trying to trying to break the system or fiddle the system or whatever it happens to be. It makes zero sense, really. Yeah. You know, because a lot of cost.

⁓ gets generated by creating this exceptional ⁓ process and system. And ultimately all it does is it switches off the 99 % of loyal, you know, well behaving customers. That’s right. And do you, does Blue Yonder do any work in terms of like fraudulent returns and minimize that? Yeah. So the great thing about the amount of data that we collect. So, you know, we have

hundreds, thousands of retailers that rely on our ⁓ various elements of our returns platform to deliver these experiences to consumers, the ones that we’ve just described. So we gather a huge amount of information and we see that. So we can track that information across like a single email address or a cohort of consumers in a particular geography maybe, or consumers buying particular SKUs and particular items. And you can see anomalies, you can see exceptions.

And actually you think when people are talking about return fraud, probably three or four years ago, the answer seemed to be cameras in shops, looking at the behavior of a single consumer, you know, and they’re all having to open every single return to see whether it is the thing, you know, I thought it was shoes, but it’s a brick, you know, The in practice, you don’t, that’s madness doing that. That is expensive. And it’s like, you know, as you described earlier, it’s a process to deal with this mind with the sub 1 %

of cases, the way you track it is through anomalies in the data. Because as consumers, we pretty much behave the same repeatedly, time and time and time and time again, often with multiple different retailers. So here in the US, for example, we power a very large returns drop off network for a major carrier. And we do the same in Australia, same in Japan, same in Europe for different partners. We can see changes in behavior patterns that highlight where these kind of

all what I call organized and curated fraudulent activity is taking place. You know, the odd one here or there, you know, may get missed, but in the round, fraud is detected through anomalies. And it’s the data that tells you that. So I have another question for you, and I hope I’m not putting you on your spot. But if you could tell me what is your ideal return scenario from a consumer perspective? Yeah, so.

Yeah, I think about this a lot. makes me, not the most popular guy at parties because this is like one of my favorite subjects, but I think about this a lot. What’s the panacea of returns management? And I think it actually comes down to both the customer experience, but also the what next, the so what. So I feel like for most consumers, we know that

We’ve got a very good idea which items are likely to be returned. So let’s say Tim’s bought three jackets, three Navy jackets. We know he’s not going to keep all three of those jackets. We just know. And so to be able to communicate with that consumer soon after they’ve received the delivery, to get real data about which of the three, why that one, why these two or whatever, and start to engage with the consumer at that point, I think would be the perfect start to the journey.

But ultimately for me, the sort of the eureka moment is the day when Tim goes online, therefore like responds to my prompt, tells me that he’s going to send this particular jacket back. The jacket’s fine. It’s just the wrong, it’s the wrong fit. I’m going to keep the, I’m going to keep the longer fit. I can then allocate that skew to an outbound order. So when Tim rewraps that item up and goes to a drop off point and he drops it off in that drop off point.

the label that’s being printed is going to Mark. Oh, that’s amazing. So it’s never actually going back to a distribution center and being touched again because we trust him. We know that he tried it on, rewrapped it, put it back in the package, print the label at a drop off point. Mark lives in the next zip code. Instead of going all the way back to some state where it gets handled in a warehouse, waited and then refulfilled, just go straight in that way and you end up with this completely symbiotic kind of environment where nothing sits still until such time as it’s until such time as

customer wants it. I love that scenario. So that’s what we’re working towards. We’re working towards exactly that. And if you think if you’re running returns management for a retailer and you’re running order management, so we’re matching orders to skews and to fulfillment. And we and we’re feeding transport management systems, we can print the right labels, we’re powering these drop off networks. That’s the ideal scenario, you know, the kind of you keep that keep that skew alive until the customer is ready delighted for you find that

customer that wants it. love that. I love the fact that you spend your off time thinking about this too. Yeah, it’s sad, it is me. What else can you tell us about BlueYonder, anything else you want to share with us? Yeah, think, you know, some of what we’ve talked about for returns, I would say is really good, really illustrates what BlueYonder is all about. that is, we’re a supply chain technology business, supply chain software business.

But we’re one of, and there are many, you only have to look at show like this and there are thousands of us. In practice though, there are very few that operate across the entire life of a skew of an item. So, you know, we, as a business, we run planning tools, the commerce tools that ⁓ I lead and I own around. once you have the planning tools, forecast, make a judgment.

procure stock and items. The commerce tools is then the kind of the brain that shapes that interacts with the consumer, shows what options are available, creates demand. And then you’ve got the execution side of our business, which is then around how you fulfill that warehouse picking, transport management, deliver on those promises that you’ve made the consumer at this point. So we manage that all end to end, but we also go right back down through the manufacturing supply chain. So in many cases, I like

I’ll walk into a supermarket in the United Kingdom and it’s fascinating. It also makes you very proud to work for the business because I can look at a shelf and I can see consumer goods and I know that our technology and our capability has been involved in the planning, manufacturing, delivery, execution of all of those things that are on that shelf. And I also know that at some point later tonight, there’s a very good chance that one of the consumers are going to go online.

They’re going to pick a basket digitally. And one of these supermarket colleagues is going to come and pick that item again, put it in their basket, create a basket, put it in a road vehicle, take it out to their house, scan it in the customer. And we’re in all of that. We’re everywhere, you know? And so, and that’s like the, you know, we’re trying to kind of create what use technology to create a world where, where any, any customer kind of preference that you could imagine can be, can be fulfilled.

But you can do it in a sustainable manner. And my boss talks about sustainable abundance. You we’ve all got used to abundance now, but have we now got a sustainable abundance? The reality is no. So we’ve got to move to a world where you have sustainable abundance. if you’re like today, in the most part, if you’re a fashion retailer and you want to buy, you want to sell a hundred t-shirts, you probably buy 140. Right. Because you know, there’s going to be some waste in the system, you know.

Whereas I think better use of technology at every point of the supply chain allows you to buy 100, sell 100. Exactly. So that’s the, of course, that’s the big objective. That’s the trick. That’s amazing. Well, thank you so much. It was great thank you. It’s been great. Yeah, no, thank you very much. I look forward to it. know. Thank you. I think it’s been very exciting. Yeah, it’s good. a lot of activity, a lot of different…

Not just retailers are here, but a lot of vendors are here. distributors as well. Yeah, it’s great. It’s like the whole collaboration of the industry coming together. I’ve done this for a long time, actually, about 15 years now. And I was saying to somebody earlier on that the pace of change over the last five years, it’s eye watering compared to the previous 10. As in the previous 10, you could walk around the show and it genuinely would be shelving and.

I remember that. remember that. And it’s very different now. It’s amazing how it’s very little hardware here these days. I think the other thing, so talking about your how blue yonder is really across every kind of touch point. I think now in our retail industry, we’ve never been more collaborative. Yeah, exactly. Across not just the functions, but across the industry. And I think that makes us better retailers. It does. It does. And I think, you know, there’s obviously a lot of

There has been skepticism about things like AI across all industries for a long period of time. But I feel like that skepticism really doesn’t exist at scale in retail anymore, particularly not in supply chain, because everybody sees how it works and how it’s evolving. But it forces collaboration, really, because AI requires multiple data sources. requires, and actually can start to influence and intervene.

in not just your bit of the business, but in your colleagues bit of the business. And therefore your colleague suppliers and your colleague supply chain and, and, and, and, so it forces that kind of rethink about how the industry operates. So it’s a bit of a force for good, even though there are worries about AI and its impact on humanity. think in our industry, it’s a great force for good. Yep. Well, thank you. And thank you for all the you do for the industry. No, great. Thanks very much.

I’m so excited we’re here at the NRF retail on wrap and we have with us Ethan Chernowski. Chernowski. always forget. It’s close. It’s great. We nailed it. Nope. We’re going to say Chernowski. Did I do it right? Chernowski. What is it? It’s Chernowski. Yeah. All right. Anyway, you are CMO of Placer AI and you guys have a lot of rich data and analytics and I’m excited today because usually you and I speak or virtual and today we’re in

Nice, it’s amazing. love it. So anyway, so I’m dying to hear what are you seeing? You get lots of information, get lots of data. Maybe do a quick what Placer AI is and then tell us what you’re seeing. Yeah, absolutely. So Placer is a location analytics company. That means very, very simply, people vote with their feet. We show you how they vote across the United States every single day.

Excellent. And you do all kinds of, I think personally I’m not biased, but I think you put out some of the best reporting of the industry. I’m always going to your website and looking up your reports and all your analytics because you kind of look at the business not like an analytics company, but you kind of look at the business like a retail. I think what interests us is this idea that you go from

metrics and data to opinions. Because I think what ultimately the way the data is used by our customers is how do they inform better decisions for their actual businesses. So for us, it’s first of all, it’s just super interesting and such an exciting space to get to monitor and look at. But so much of what we’re trying to show is you might completely disagree with the conclusions that they have and that’s absolutely legitimate. But to go from a metric, a number, a data trend to an informed opinion about something, I that process is so.

I think it’s great and we’ve shortened the time considerably from like five years ago. Like decision making is like very quick in no time now. I feel like some of it’s almost like too quick. Like it’s funny every time you go to one of these conferences you hear about like what are the big themes that are being discussed and you’re like well remember two years ago when you told us it was gonna be this it doesn’t change that dramatically that quickly and so I feel like sometimes you want

really, really rapid decision making and there are certainly places for that but in a lot of cases it’s almost like take a deep breath let’s decide is this thing that was something we think is going to be here forever is this thing we think is going to go away in the next few months is this something that’s going to be you know dictating the way retail operates for the next decade and I there’s so much variability there. Yeah absolutely so tell me what are you seeing in the data what have you seen transpire over the past year and what can we look forward to?

So I think there’s a few things that have really caught our attention as being foundational into what retail is going to need to do in order to drive success in the coming years. I’ll give you one that starts with the consumer. If we think immediately post pandemic, we saw this mission driven shopping trend where people are going to retail locations. They’re spending lots of time in those locations. If you win the visit, you win the basket. It’s not just about the number of transactions, it’s about the number of items that are in that basket.

What we’ve seen over the last few years is that really dissipated. So visit durations are down. The number of visits for every category per customer is going up. So people are going to more locations. They’re spending less time there. And I think this is so critical because, again, let’s put on that time machine hat and go back to 2020. We were told convenience is king.

And I think what we’ve learned in the last few years is that’s absolutely not the case. Interesting. It doesn’t mean convenience isn’t important. Right. But it’s not king. Right? There are things that are much more important. So value, product, experience, brand affinity. These things have a lot more significance than we sometimes give them credit for. Right. And I just want to mention something about value. Because value is really important. Value doesn’t mean cheap. Or…

Low price. Value means the worthiness in the eyes of the consumer, right? I agree with you completely, and I think it’s one of the things that you hear the terminology tossed around. But it’s almost like…

Because it’s so fluid, it’s difficult to pinpoint. So what is affordable enough? What is valuable enough? And I think that’s why elements like caliber of product, elements like experience and brand, they matter more because value is somewhat of a moving target. so…

think about retailers that really nail the experience, people are willing to spend a little bit more. When people, the retailers that don’t do that, value becomes more of an issue, but it’s not because the price was off, it’s because they don’t perceive the overall experience as being worthy of the price that you’re charging. Right. So tell me about in-store experience and what any information you have regarding visits or duration. You mentioned the duration went down.

What else can you tell us? What’s interesting is when you look at data like that, see shorter visits, you see more visits, and so you can clearly see that the battle is going to, again, how do I get the visit and I win, to I’m gonna get the visit, how do I maximize my share of the list of things that need to be bought or purchased? When you take that as true…

implications from an innovation perspective are massive. So where are we going to invest our time and energy? Is it going to be shrinking the journey in store? Like I don’t think that’s the thing that really moves the needle, but I go to elements like retail media, especially in the physical environment, and though it’s kind of not as hot and exciting as it was a year or two ago, think it’s unbelievably important because that need to maximize the kind of value.

The dollars per visit, so to speak, increases. So what helps improve the customer journey? What helps drive more purchases? What helps drive, I don’t know, just monetizing the visit itself? These things are unbelievably important, and I think those are going to be prioritized as we continue to see things fall out in the next couple of years.

That’s so interesting. So who do you think is really killing it? When you look at the data and you look at this consistency of visits over time, who’s really killing it? There’s the ones that never surprise. And it’s almost necessary to call them out because it’s easy to overlook because they’re so consistently good. So Walmart, such a great example of just effective execution, consistent growth. Even the way they do e-commerce, the way they leverage.

their in-store capabilities to drive that e-commerce growth. Costco is such a great example. I think, Costco is an amazing example because I think we gloss over some of the crazy things that they do. you can go to Costco and you know, you have an expectation of what’s going to end up in that giant, that giant cart that you’re reeling around.

But I think one of the things that’s amazing about Costco is you’re also renting cars. You’re booking travel. That doesn’t make any sense. It really doesn’t, and yet they do it so effectively because we love them, we trust them, we appreciate their relationship. It’s something that’s really special. when you call it out, I know someone who gets their hearing aids at Costco. Again, in what planet is that a normal journey to go on? But yet it works because they’re so strong, they’re so trusted. And then you think about smaller players that certainly get lots of hype.

HEB, their ability to be authentic and really locally focused. But then there’s players that I think are well positioned because of things that they’re doing, but also changes in the market. So things like Michaels. Michaels was a really strong performing retailer. And as the year went on, we saw their visit growth pick up pace. And that’s because two of their biggest competitors fell off. Joann’s and… And Joann’s and Party City. And so you see this incredible combination of a really strong retailer and a great opportunity. And I think those are the ones where you’re like, wow, this

is going to be exciting. Love that. So what can you tell us on consumer behavior? What are you seeing differently? What do you think is going to happen in 2026? I think it’s going to be, I mean, there’s nothing more boring than saying it’s going be more of the same, but I do think it’s going to be more of the same, which is this. A shopper that is basing their purchase on the things that they love, a shopper that’s willing to visit more places, I mean I was on a panel earlier today and the terminology that was used that was both funny but also incredibly like excellent, it’s a promiscuous shopper. Like they’re not just for you. Like they’re going to go to other places and you need to know that. And so how do you lean in to those things that you do exceptionally well?

What makes, it’s not like a lost leader mentality of how do I convince you to come and then you’ll hopefully buy other things. It’s how do I create something great so that you’ll come? And I think that is a mindset shift, especially when we know how prevalent value is, where it’s not a race to the bottom of who can make things the cheapest. It’s who can create this incredible experience that’s so affordable. I love that. Who said that comment, do you remember? I don’t wanna, I’m gonna butcher his last name, but a brilliant guy from Giants.

Oh nice, yeah. Okay, so yeah, I agree with that. And I think it’s very difficult because as you kind of hinted to, the consumers, the behavior changes based on the scenario. Like today, for me, I gotta go to my son’s baseball game. It’s all on convenience. Tomorrow, I’m shopping with friends. It’s all about social interaction. Also, I think one of the big things we forgot is that, or we didn’t want to admit, I don’t know if we ever forgot it, we like shopping.

even like going to the grocery store because there is something about walking through the aisles and like what am I gonna choose what’s gonna inspire the dinner that I don’t know what I’m making yet in two nights or which I don’t know for me that like it’s because it’s silly but you know walking through the cereal aisle with my kids and they’re like well which version of Cap’n Crunch are we gonna choose like there’s something exciting about that journey and I think the more we embrace the fact that this isn’t just something we have to do it’s something we are choosing to do the more we can elevate that experience. Yeah, now I agree with that.

I think the whole physical stores and the experiential retail are really gonna win out. So Placer.AI has been around for a long time. Seven years since we launched. That’s great. So what are you planning any kind of new features coming out over the next few years that you can tell us about? Yeah, so I mean there’s we have a heavy focus on trying to make the data even more accessible even easier to leverage so lots of things where like one-click reports where you can go in

filter out some key details that you’re looking for and then have that in your inbox within a handful of minutes. That’s what we’re really focused on. How do we speed up the process from that eureka moment, this idea that you want to explore to getting a real insight that’s going to help you make better decisions. There’s a lot of obviously emphasis on AI and how do we enable these AI components to better access the data, allow you to answer questions more directly.

to be a little bit more specific and tailored to what you’re looking for, these are the areas that focus for us. So clearly you’re using agentic AI, right? I would imagine, yeah. You’ve probably been using it for years. mean, we’ve been, yeah. The AI trend has been one that we’ve been leading into for quite a while, but it’s like a never-ending exploration, and it is very complicated, and it’s hard. You want to make sure you do it right, and you do it justice. Yeah, because if you do it wrong, it’s a whole trail of events that occur that…

Absolutely. There’s a lot of trust that our customers put into us in terms of the caliber of the data and what it’s indicating. So to make sure that the tools and products we create are ones that our customer base can trust is a huge element.

Anything else you’d like to add or anything else that you’re seeing? I mean, I think the biggest thing is remembering that we’re operating from a position of strength because it’s so easy to forget that less than a decade ago, the dominant retail narrative was stores are dying, people hate shopping, we’re going to order everything to our house. And now we’re seeing almost the exact opposite. It doesn’t mean e-commerce isn’t amazing. It just means this conception of a zero-sum game in retail is false. And so many channels are important to creating that ideal experience. embrace that holistic view, the better the retail experience we’re going to create. Yeah, I definitely think going to the direction of the connected store and really connecting all those pieces is definitely what consumers are looking for. And if you think about the younger generation…

So Gen Alpha and Gen Z, they’re used to this instantaneous information at their fingertips. They don’t even want to search for information or search for things. They want everything immediately given to them. And that’s only going to escalate as time goes by. So whatever, we can do real time to make sure we’re meeting the needs of that consumer in the moment of the shopping experience. Right?

Well thanks for being here today. great having you. my gosh. So, place your AI. Thank you.

And see. Nice.

Hi, Shelley Cohen here. so excited to have Jay Hakami here, CEO and founder of Skypad with me in person. I’m so excited. so much for having me. It’s a pleasure. Absolutely. So we’re here at the NRF show in the Javits Center. And wow, AI is everywhere. Everywhere, Those two letters. Agentic AI is actually picking up very large. I mean, you know, we’re in the data field.

So for us, initially AI was a search engine, you to be able to search faster, get information faster. But with Gentic, now you can do predictive. Now you can give assortments. Now you can do recommendations, which is a lot more interesting because now data talks to data and the results come out. So it makes it a lot more interesting than just another search engine, which is amazing by itself because, know, today you type in a few words and you get the answers you want.

which is kind of supersedes kind of Google on steroids, if will. But with agent thinking, moving to a different field where data speaks to data and results come out. it’s amazing for us, especially as a company that deals with data all day long, between retailers and brands, we see it as a huge opportunity for us in the marketplace. know that you have been working with data analytics for, I don’t know, decades, probably. 25 years. 25 years. Decades.

And I really am interested in hearing from you. for me, and now I’m a retailer, I’m not a data person. And I do understand retail tech, but not at the level you understand it. And when I look back at the past few years, I saw kind of this kind of slow tech, tech, tech, then five years ago, it got very fast. Today, I feel like I read something today, or I look at something today, and tomorrow it’s different.

Talk to me a little bit about the speed to which it’s changing and what you guys are doing to kind of stay on top of everything. Well, it seems that the retail merchandisers, specifically in the merchant side, they used to do things based on gut and feel, right? You touch. You want to see. But what’s happening as we progress in the years, it’s about the data. It’s about trends. It’s about looking at data and trying to predict what’s going to happen later on.

Joanna Hollern (02:24.782)
So I think we kind of stumble into this space, but it’s actually a great space to be in because the look and feel is still there, but the data confirms it or makes a change in decision making. So over the years, you’ve seen companies, retailers and brand innovating, continuously deploying different technologies to improve their business. And that trend will continue, especially with AI. is a huge change.

It’s much bigger than the internet back in the day when that started. So you’re going to see a major changes where actually companies, retails and brands are going to be more technology companies than merchants. I know, right? In a way, in a way. Did you, so today the CEO of Google was talking about like we’re right now in this most transformative place ever in the history of retail.

No doubt. So what’s your take on that? Well, there’s no doubt. I you’ve seen all the dynamics happening in retail today all over the place. And I think with the new tools that are coming to the market, especially with AI, AI-Gentic, there’s going to be a humongous change. You’re going to see the conversation is going to be more about technology, data, insights, predictive, than it’s going to be more on the human touch, which is kind of a shame in many ways.

but it kind of confirms one another because you still need the human feel to do what you do. But I think the data kind of confirms it. So I think, you know, what what Google is saying is now we’re coming up with tools that enable you to do from imaging to to data, data management, things in retail that they never did before. a company like Google or Microsoft or any other big players to do this, it shows the movement.

moving more into technology than the human touch. Yeah. So Skypad, tell me, if you could tell us illustrative examples of how you’re using agentic AI or AI, what’s different today than was even last year? What are you seeing in the future? Well, when we started the business back, well, Sky IT group has been around for 25 years, and I did say that before, but Skypad has been around for 18 years.

Joanna Hollern (04:46.879)
Initially, we were started as a data collection company, collecting data from the retailer, aligning it with the brand style information, and then providing insights. Today, with AI and AI-Gentic, what we’re doing is we’re getting into the predictive side. We’re going into the planning and allocation based on AI. We’re doing dynamic AI development with dams, with digital marketing assets.

We’re doing things that we never did before. We dabbled a little bit back in the day with machine learning, which is, know, but I tell you, we were not successful. was too technological to do what we wanted to do. With AI, we can do it in an enormous amount of speed, launch it quickly, and show results almost immediately. So we’re excited about what we’re developing.

a slew of products coming out with AI. And one of them, we just launched here at the show, which is basically just type what do you want to know? And it gives you the answer, gives it to you statistically in graphs in any way you want to see. So you don’t have to click and point anymore. You can actually ask the question, which is already an AI enabled platform. But there’s a lot more in the background that we can do with data talks and data and gives you, oh, you sold that red over there in this time frame.

Maybe you should consider adding more inventory to that place or reduce the green because it’s not selling in one location and doing fantastic in another location and giving the merchant the insights to make decisions much faster. just to give you just so I understand this. So you’re saying that today a merchant or a brand can say, OK, tell me where are my 10 best wide leg jean pants stores selling and what colors the top and boom.

Well, we can do that today. That’s easy. that’s easy. Yeah, we’re doing that today because we’re collecting data from the retailer. We are aligning it with the the information we get from the brand. We’re putting it together so the brand can actually make a decision what’s selling, what’s not selling by geographies, by product attributes and by time dimension. But today with agentic AI, what you’re going to see is basically telling you, this information, this this product is going to be selling very well.

Joanna Hollern (07:12.097)
based on these parameter in this location. So future sales. Future sales. Predictive. Predictive. We’re looking at the rear view mirror. AI is giving us the that’s amazing. That’s what we are so excited about AI and agentic AI. So you’re basically, you’re essentially setting up buyers and planners for absolute success.

because you’re telling them ahead of time what’s actually going to With one version of the truth. But don’t forget, we’ve got the buyer and the seller looking at the same platform, looking at the same analytics, the same projections, and they’re coming up with the same result. They don’t have to have a dialogue about it. They have that information readily available today with agentic AI. And that’s the real key. And the beauty about a company like us is that AI without data is like glass water with no water, right?

So we have all the data, just a question of how do we treat it? How do we combine it? How do we manipulate it? How do we get to the results, the end results we want to get? And that’s the beauty about what’s happening in SkyPad today with AI. That’s very exciting. And I know that you said predictive analytics. You’re very excited about predictive analytics. What else excites you about AI or agentic AI? Well, I’ll tell you everything. Our development right now is

80 to 95 to 95 % AI. We’re not doing any pure development like we used to do before. It took us a long time to come up with a product. By the time we scoped it, developed it, tested it, today with AI that process is much faster. We can come up with solution like planning or market prep. These type of solutions, we can come up with two, three months ready to launch to the customer. And we will be

introducing that in the next couple of months, the next couple of quarters to our customer base. That’s amazing. So the cycle from idea to launch is so short. It could take weeks, could take months, but it’s not going to take years. And that’s the beauty about technology company doing the things that they’re doing with AI. Especially because you work a lot of collaborations and partnerships with the actual brands.

It’s not like your technology company out there. Believe me, we don’t. We don’t develop anything on what we think we need to develop. We we sit with the brands. We talk to the retailers. We get insights before we do anything. I learned that the hard way, by the way, I was sitting in the side with I was saying, oh, let’s develop this and this. No, no, no, not anymore. We talk to the customer. We see what the demand are. And people saying to us, we would love just to type in a question. Give me just type in a speaker. I want my CEO to use this.

Type in a question, how was my low heel shoes during South Dakota? Give me the answer, give me the chart. How did it do in September versus October? Give me the information. I don’t want to click and point anymore. Going away from that, it’s a question. So even with voice, you can do it with voice. You can do it on your cell. Okay, you can go to the merchant, to the retail and ask the question on your cell and get the answer. Here’s the answer right here. So these are the things that you’re gonna see with AI and agentic AI. We’re super excited.

I cannot stop talking about it because it’s just such a huge change from the traditional way of doing things to the do it. I mean, it’s so fast. It’s so easy. It’s so just amazing. I love that. And I love the fact that you actually went and asked your brands what they’re looking for. And if you think about the workforce and the young people that are coming into the workforce, so now they’re growing up and they’re coming out of an age where they’re used to

talking into chat GPT and getting problems quickly solved. And so now they’re in the workforce. And so when it makes sense, that that’s what they’re expecting. Exactly. And quite frankly, when we develop SkyPad, it wasn’t developed for dinosaur like me. It developed for the new generation. so basically the new generation is accustomed to that, to talk to it and get an answer immediately. And the answer is to be immediate. And that’s the beauty about this whole thing. Now we’ve got the data, we’ve got the tools.

Now connect the tools to the data, bring the data out as fast as you can so you can respond to the requester. And that’s really the key. In our world, the requester could be the brand or it could be the retailer. Either one. You want to make sure the answer is the same for the same question. Of And that’s the key about AI and AI-Gentic is the fact that you need to have the data in the correct way to make sure the answer is correct. But otherwise, people are going to make mistakes. Of course.

business decisions are being made on the information we provide. So we’re very keen about what we do and how the information comes out. And it goes to a rigorous QA before we launch. We’re a little bit slow because we want to make sure it’s perfect when we go out. And so you talked, I just want to talk about the product life cycle. You talked about how that’s going to shorten greatly. So I grew up in the era, I’m not going to call myself a dinosaur, but.

I grew up in there was nine to months product life cycle. then, know, Zara hit the ceiling in H and so that became six weeks. So are we thinking less than six weeks now? Well, in our world, it could be. It could very well be. If you want to create a solution, for example, let’s talk about market per. We can actually develop it today based on the data we already have. We can develop in six to eight weeks.

we can launch it in, you know, in 10 weeks. So what I’m saying is that the cycle time and the fashion industry has been shortened considerably considerably. by the way, our development time is shortened as well. So we’re enabled to give the our consumer a much faster technology to be used to accommodate their shortened life cycle on the supply chain. So let’s talk about the

ultimate consumer out there and they’re using and use cases because I feel like everything we do whether you’re working with a brand or you’re working with a retailer that all goes back to the consumer. Do you have any insights about? I’m a big, big believer, big believer that the retailers should be treating the consumer as well as they’re treating their brands. I think and we have a lot of stories about this right now as we speak.

but the brands are their partners. And if we don’t have this hub that provides information to both sides and sharing of information from both sides, the ultimate loser is by the way, is the consumer. Of course. Because all of a sudden you have sizes nobody wants or colors nobody wants in a specific location. So the dialogue between the retail and the brand is so, important. As much in my opinion is important as the dialogue.

between the retailer and their consumer. And these are the things that I think most retailers are realizing today. You cannot ignore your brands. You need to talk to them, discuss based on information, based on data, based on insight, based on trends, how things are moving or not moving, and then make decisions. And these are the things that I think the retail is beginning to understand, that it cannot be a siloed situation where they’re only addressing the consumer. need to address the brand as

I love that. And you’re so right, because it all goes back to the consumer at the end of the day. At the end of the day, the consumer, because the consumer wants to come in, they want to make sure they’ve got what they need at the right place at the right time. And if you don’t have these insights, you’re to come to a store and you only have red and you don’t want red. You want the blue. you will. By the way, if you have the red that size four, not the one you thought. So all these things are going to be addressed much faster when you’ve got.

AI embedded into your platform. And Jay, I have to give you high five and lots of recognition, because I know you do a lot of work with students. We do. And you know, I have a personal passion of educating students and helping students understand the next wave of retail. So I want to thank you for all the work that you’re doing with students. Absolutely. We love it. Naomi, one of your professors came in and said, you know, we would like to bring your students to your facility. More than welcome. We’re across the street from FIT.

So I think that’s becoming a trend and hopefully we’ll get our product into your faculty as well. think that, you know, SkyPad and actually in Europe as well is becoming a tool that schools, fashion schools are beginning to show and teach. And I think that’s a big benefit. And I appreciate the fact that you’re endorsing us in that way, but we love having the students. think they’re bright. And this is the future at the end of the day. You know, we need to have that future come up.

There are future merchandisers, future CEOs, VP and SVPs of the industry. And if we don’t teach them now, and if we don’t do it, who’s going to do it? That’s right. And I think you’re right, because I think with students, you said something early on, and that is you have to get, we have to have young people that are students playing with the AI. No doubt. They have to start to understand it. You can’t just say,

you know, no, no, no. And then they come on the industry and they don’t know what to do. So I mean, if I had one advice for young students is jump into Gemini, jump into Copilot, jump into Chia GPT, the slew of tools out there that can actually educate you about AI. Because once you go to the workplace, the first question you’re going to be asked is after, you know, after a few questions is, what have you done in AI? Have you played with any of the tools? Have you learned about it?

So you need to be able to really mention some of the things you’ve done in AI. I think it’s key. I love it. That’s great. Any closing thoughts for us? Well, look, I’m a big fan of FIT, as you know that. We have, I think we have about seven or eight, if not more, folks that came from FIT. we love the people that come in. Many of them are coming as interns. And today, some of them are managing big projects for us.

across the globe with SkyPad We have over 3,000 subscribers and a very vast network of retailers in the US and abroad that we support. And the talent you produce is amazing. Thank you. you. But again, getting back to the education, really gear up on AI because it’s not going away. It’s not a fad. Well, thank you so much for all the work that you do and for making our merchandisers and allocators in our

industry being you know giving them the tools to be much better at what well we do it with love so thank you so much thank you.

my gosh, I’m so excited. We’re here at the N.R.F. show, Retail Unwrapped, and we’re in person. All right. It’s great. George, I have George Shaw here, who is the Senior Vice President of Standard AIs. AI Strategy. AI Strategy. That’s kind of a tough question, That’s right. So welcome. It’s great to have you. Thanks for having me. It’s always a pleasure, Awesome. So I’m dying to hear what you’ve been up to, what’s going on, and tell me what you’re seeing at the N.R.F. show.

Wow, so a lot’s been going on. ⁓ My company, Path Air, was acquired by Standard AI. That’s awesome. We announced that on Friday. Like Friday? Just now. my God, that’s great. Yep. So I’ve had a new job for about a week. It’s going great so far. I love it. It’s fantastic. Standard is an awesome company. They came out of Autonomous Checkout. So they built a lot of fantastic technology in order to solve that. And now they’ve pivoted into analytics, which is really my wheelhouse, stuff that I love. So it’s a really, really nice fit. And we’re going to figure out how to scale.

computer vision and analytics. I love that. So tell me a little about, so I’ve heard a lot about AI, GenQ AI and computer vision. what I’d love for you to tell us a little bit about is what is computer vision in today’s retail world? What does that look like? So now the, one of the big trends that’s happening now is using existing cameras. Retailers had the, had the insight and, and I want to say companies like Path or my old company helped to, helped to educate them in this, but they could use their existing cameras.

Instead of having to install a bunch of new cameras in order to see what their shoppers were doing, use the cameras that already there, because the science came forward. So the computer vision technology, the software made it so that we could use the security cameras they’ve already got. So think that’s the biggest trend. We see a lot of that. A bunch of companies that are working on doing that. ⁓ And retailers are starting to understand also the value of that data. What can you do with computer vision? Exactly. What are you doing with computer vision in that store environment?

There’s lots of different things you can do with computer vision. What Standard mostly does and what Pather did was to track people as they move through the space, anonymously. So we use the security camera, we take that feed and we turn people into dots moving around a map. Pather, had one dot. Standard has 26 dots that represent a person. What that means is we know where your arms are, so we know if you’re reaching out to touch a product. We know which way your head is pointing, so we know where you’re looking. If you’re looking at a media screen, for example.

we can tell that you’re looking at that screen rather than just standing in front of it with your back to it or something like that. So this is something that computer vision has been used for for a while. ⁓ There are other purposes for computer vision as well, looking at products and all sorts of other things, but that’s what we do. That’s great. So you’re monitoring the path of the shopper as they’re in the store, reaching, you know, if they’re bending, standing up, looking at something, all of that. That’s right. What’s the ultimate goal? What are you going to do with all that information?

So every retailer sort of has a different use for that. They all have some different metric or some different thing that they want to learn, something else that they want to understand depending on their particular environment. ⁓ Luxury retailers, for example, they want to know a lot more about the interaction between their staff and customers. How long is it until somebody’s greeted? How long does the staff spend with the customer? Is their selling behavior happening? Does it lead to a transaction? Things like that. Specialty retailer, similar. lot of retailers want to understand the shopping journey.

So when I come in, where do I go? What products do I look at and not buy? What do I ultimately buy? What does that behavior look like across different shelves and fixtures? This happens in beauty, happens in apparel, even in grocery. They want to know about that full shopping journey. But also retailers wanting to know where people are focusing their attention. So for media, that’s one that’s really important to us right now is measuring in-store media and being able to do that in a way that’s accurate.

Again, if you have your back to the screen or you’re on your phone, you’re not actually, you shouldn’t be counted as an impression. You didn’t actually see that ad. But if you’re there watching the ad, that’s an impression. So this is something that retailers are starting to measure more as we see a lot more in-store media happening. Yeah, the retail media networks is just growing so big and it’s now, when you walk into a store, it’s everywhere. So I can see how that can be beneficial. Are you able to connect the KPI? So let’s go back to your example in London.

So you have this interaction of an associate. Can you then look at the KPIs that came out of that? Like the sales, know, what the, know, UPT or average transaction, all of that. Yeah, yeah, always tie all the metrics that we would collect to the things that ultimately the retailers care about that affect their bottom line. So whether that’s the, you know, the selling behavior of the staff or how people are shopping. Queues is another big one. Monitor queues and help retailers to keep the queues short. If nobody wants to wait in the long line, that’s a, that,

affects conversion that affects ATV. So they’re looking at those metrics in relation to things like queue or engagement with staff and so on. That’s exciting. So tell me, what do you have on tap for 2026? What are you guys kind of focusing a lot of the development side on software wise? This is the year to scale computer vision. I really believe that. been doing this for a long time and I think now is the time. And the reason is because we’ve got much deeper technology than we have.

We’ve got much better data, it’s more granular, it’s much more accurate. And to do autonomous checkout, you have to be 100 % accurate. You never make a mistake, right? And so the analytics are extremely accurate. But then what we’ve also done is prove that we could scale that kind of technology. And so those two things are coming together, chocolate and peanut butter are coming together. And it’s looking really good for this year to be able to scale this really powerful deep tech. I know that. And when you say autonomous checkout, you’re talking about self-checkout.

So like Amazon Go or just walk out. That’s where you really you think that’s going to grow bigger this year? No, I think I think I think that is sort of ⁓ sort of maybe leveled off. ⁓ But a lot of those companies that were doing that are now pivoting into analytics and more operational analytics, you know, selling behavior and just sort of analytics that I’ve always worked on. No, that’s great. That’s great. And so when you look back on the past year, I know you’ve been looking at consumer data for a long time.

What consumer behavior changes have you seen that you think retailers would be most interested going into the future? Ooh, that’s a good one. That’s a good one. ⁓ We see a lot more engagement. So people are coming into stores and wanting to interact more with staff. ⁓ think that speaks a lot to why people shop in physical stores in the first place. We want to see people. We want to touch the products and there are other reasons, of course, but we really want to interact with people. And so I think we see that in the metrics that we collect. We see more of that.

see retailers caring a lot more about that. It’s a question we get a lot more than we were before. So think that’s one of the trends that I’m seeing at least. No, that’s great. So what else do you want to talk about in terms of what’s happening at Standard AI? are you excited about? What keeps you up at night? You know, I’m excited about all this tech. I’m a nerd. I’m really into the technology that they’ve built and that I now get to enjoy continuing to develop a bunch of really cool stuff that we do.

We can measure the total time somebody spent in store. Even in a huge store, even with just a single camera, we’re able to do that. We’re able to, again, understand media impressions, all these different metrics. I won’t give you a laundry list of all the metrics, but there’s a lot of really interesting metrics that we could collect. I’m super excited about that. What keeps me up at night is whether we can do this at the scale that we want to do it. Whether we can deploy that sort of tech to the thousands, tens of thousands of locations that we’re chasing after. Yeah, the details is it.

The devil’s in the details. The devil’s in the details. right. Exactly. So I think a lot of retailers get overwhelmed with the amount of details and the amount of data. how do you suggest retailers kind of unify that view so that they can actually make quick decisions? I really feel a lot of that is the responsibility of companies like ours.

I think we have to simplify the whole process and we have work to do. It’s not there yet, but we have to simplify the process of deploying the technology to make it faster. We have to make it easier to get the tech out there. And then we have to make the data more useful. Retailers don’t want a bunch of dots moving around maps. Even heat maps are of limited usefulness. They want the metrics that they actually care about. So that’s up to companies like us to figure that out.

Give them a very simple, clean, clear dashboard that you can use operationally at scale. I feel like most of that is on us. In real time, right? In real time. We want everything real time. Yeah, yeah, absolutely. Well, again, while you’re doing autonomous checkout, you have to operate in real time too. So our system is super efficient, super fast. That’s great. Anything else you want to share? No, I think that’s it. I really appreciate you having me on. Absolutely. I’m excited. excited to see what you guys are going to be doing this year. I’m going to be watching you.

and saying all kinds of cool things that you’re putting out there. Because I know you’re trying to retailers really understand data in a measurable way. Absolutely. We want to help them just be better retailers so that we can all have a better shopping experience when we go into the store. Exactly. And give them data to do that. Awesome. Well, thanks so much for being here. Thanks again, Shelley.

Shelley E. Kohan (00:01.463)
Hi everybody, thanks for joining our weekly podcast. I’m Shelley Cohen and I’m very excited to have with me today Sandy DeFelice. She’s the Senior Vice President of Revenue and Strategic Accounts at Digital Wave Technologies. Welcome Sandy.

Sandy DeFelice (00:17.036)
Thank you so much, Sheila. Really, really appreciate. let’s try start that again. I think I said Sheila. My gosh. All right. We’ll try that again. I put my name together with yours.

Shelley E. Kohan (00:30.359)
That’s okay. You could just go in and say, thank you, Shelly. Okay.

Sandy DeFelice (00:34.284)
Yep, perfect. Thank you, Shelly.

Shelley E. Kohan (00:38.017)
So what I love about your background is, first of all, come to the end, you have a wealth of experience from the industry, which is great. So you really know the inner workings of the industry, supply chain, logistics, all of that. And then you moved over to kind of retail tech. So that’s, I’m sure, been a super interesting arena for you over the past few years. I know Digital Wave Technologies has been showing at the NRF for many years. The NRF is…

happening this weekend, which is very exciting. So I think I’ve been going to NRF for, I hate to say this, but maybe plus two decades or something like that. I’m sure Sandy, you’ve been going there for a long time also.

Sandy DeFelice (01:15.564)
Yes, yes.

Absolutely, and it’s amazing how the show has evolved and changed. I think that there’s going to be some pretty exciting things this year. And we’ve all just come out of a very, very interesting year behind us. A lot of challenges that we faced, and I think collectively. And I think everybody is really energized.

for a fresh start, a new start, and really understanding what technology can do to reshape businesses going forward.

Shelley E. Kohan (01:51.716)
Absolutely. I remember back in the day, the NRF Show used to be like material handling equipment, shelving units, registers. Like today it’s like a huge technology show.

Sandy DeFelice (02:03.126)
It really is. And there’s some really great aspects of the show. I I would obviously encourage everybody to walk and see every booth. I think the vendors that are there have worked hard to really showcase what they’re doing. I know that we have done that. And I think there’s exciting themes that are emerging, especially everything that we’re hearing in the news, the way that the consumers are really showing up and their advancements in technology.

and what that means for vendors and retailers to really stay the course and keep up with those trends. So I think there’s a lot to accomplish this NRF.

Shelley E. Kohan (02:41.513)
I absolutely agree with you and I’m going to be very transparent. can’t wait to see Ryan Reynolds. I’m not going to lie.

Sandy DeFelice (02:46.862)
Hey, isn’t one of the Jonas Brothers singing too? A little plug out for that. I don’t know. I think there’s a lot of exciting things kind of going on that will all be interesting. And you know, it is a really nice time to reconnect not only with the customers that we support, but with other vendors and just as a community to really march forward into a new era. I really love the people aspect of this too.

Shelley E. Kohan (02:50.979)
Bye me.

Shelley E. Kohan (03:02.497)
Absolutely.

Shelley E. Kohan (03:15.393)
Yeah, and I have to say I’ll give you I’m gonna give you a plug even though I know you won’t plug yourself but every time I go by Digital Wave Technologies NRF booth for the past I don’t know four or five years it is I can never get to anyone it’s packed and packed with interest and people so I know you guys are gonna have a successful show so

Sandy DeFelice (03:33.838)
Yeah, we have so many appointments and it’s just lining up to be just an incredible event. I mean, I get excited about it way before this week, so we can’t wait.

Shelley E. Kohan (03:47.492)
That’s great. OK, so retail’s at this huge inflection point. So talk to us a little bit about why you think that is and kind of your perspective across maybe retail technology and data.

Sandy DeFelice (04:00.0)
Yeah, I mean, there’s so many places we could really start, but one of the things that I know I’m seeing a lot in my own personal role and in working with these leaders across many different types of retail, wholesale, different types of industry is that the data and getting the data right so that these new advancements in

generative AI and agentic AI and all the trends and the buzzwords that we’re hearing, the data’s gotta be right. And where I’m seeing people spend their time is really figuring out how to do that and working with the right technology partners to enable that journey to get that governance in place. I think that’s a very, very big key theme that we’re hearing. The other obvious is that

While AI has been around, and it’s been around for a while now, right? This is not a new term. We are now moving into this agentic component. And so people are really trying to get their arms around, what does that mean? How do I use it? Where is it really going to get me these gains and efficiencies? So I think you will see a lot of people coming to NRF and coming to our booth to be educated.

I think people look to us as trusted advisors. think they know we are steeped in the industry and we really understand the inner workings. And so they’re coming to us to say, how do I apply this? And what’s really, really happening? How do I attract those consumers? How do I keep pace with my competition? And how do I make my products relevant and searchable and easy to find? Because that’s really what AI is really changing.

across the spectrum.

Shelley E. Kohan (05:53.748)
Absolutely and I want to go back to something you said about pace. So I think one of the biggest things I’ve seen, so if I’m seeing it you must see it tenfold and that’s the rate of change that’s been happening. It is so fast it’s coming in very significant waves as your company likes to say the waves, digital wave, but there is no more there’s no such thing as these slow incremental test of wait and see right.

Sandy DeFelice (06:04.984)
Yeah.

Sandy DeFelice (06:13.495)
Yeah.

Sandy DeFelice (06:20.938)
No. Yeah, I completely agree. very appropriately, we are named, those waves really are crashing, right? And they’re coming faster and faster. And the changes in technology and the speed in which the technology is being consumed but also reformatted on a continuous basis is really

really putting pressure on the retailers, for example, to keep pace with those changes. And it’s hard. It’s really, really very hard. And that I do want to just go back to saying, that’s why the data is important, right? Getting your arms around that data, understanding your data schema, breaking down those silos, centralizing that data, having that governance.

so that you can adapt to those changes because most of those changes are very, very steeped in having the right data. And so if you do have that in place, then consuming those changes that make sense for your business are much easier. Not that they’re not difficult. There is change that is happening and environments and retailers have to be really able to fluctuate and

take on those changes and have that kind of an environment that’s very nimble. But without the foundation, those changes are not, you’re not able to even take them on.

Shelley E. Kohan (07:58.372)
That’s so true. I think one of the other biggest challenges that we have in the industry is we have so much fragmented data. So the data can be accurate, it can be perfect, but then now when you look across the enterprise, you have all these silos of data. I thought we would see more progress by now of trying to unify some of that data, but can you talk a little bit about what’s happening with being able to take all this data and look at it in a more comprehensive view?

Sandy DeFelice (08:10.253)
Right.

Sandy DeFelice (08:26.956)
Yeah, I think that the idea of silos is still very much out there. There are, there’s reasons for that, right? mean, departmentally, organizationally, companies that are both domestic, international, there’s reasons why we have those data. And some of that difference in data is important. You know, it does allow a particular entity to operate as it needs to.

But there does need to be centralization to that decision making. And that data can’t be so disparate that there isn’t the efficiency in making those decisions or being able to look across the landscape and identifying trends. So that need for centralization, yes, at a lower level, but at a much higher level within those organizations is not an option anymore. It has to be there. And additionally, companies can’t spend the time

trying to get there. They need to make the effort to ensure that that is right, to really drive that automation and the speed through the technology that they want to deploy. Because the other aspect of this is that we haven’t really touched on is that need for much broader efficiency gains. Because without it and that quicker decision making and the ability to adjust your business as the trends are adjusting,

change the attribution of a product, example, improve the pricing dynamics based on something else that is happening in the market. If you can’t be that agile, it’s going to put you behind in terms of your competition. And that’s what everybody is really trying to solve at this point.

Shelley E. Kohan (10:07.235)
I know you guys do a lot of case studies and stuff. Do you have like an illustrative example you could share with us?

Sandy DeFelice (10:13.654)
Yeah, many, many. I think that one of the biggest ones that I have seen, the most impactful ones that I’ve seen recently, and we can talk about a number of them, but is a customer that we’re working with that really had about a $400 million problem in which they did not have the visibility in the data, going back to the data theme, to really solve for this. And essentially what was happening is that they were being overbought by their buyers.

They were writing purchase orders, they were not able to map it back to budgeting because it was very, very disparate. There was an assortment planning process, there’s an order management or a purchase order process, and those two things were not talking. As buyers were going into the market and writing orders, there was not that data reconciliation. It sounds basic, but surprisingly, it does happen much more than we think.

at the end of those seasons or the end of the year, those buyers were so overspent that it was starting to accumulate to be about a $400 million problem. so solving that through data, solving that through synchronization, solving that through business processes, the use of AI to be more efficient, to carry those processes through and create that automation was key to solving that. And that was something, you know, that’s a case study that we’re very proud of.

But there are many others in terms of really gaining that efficiency. Those efficiency gains that, you know, without those modern technologies, you’d not be able to do. Without that framework, you would not be able to have it.

Shelley E. Kohan (11:52.386)
I want to go back to something you said about product attribution. So we’ve been talking about product attribution for a while and you know, back in the day, a product had what? 10 attributions? And I think now hundreds? tell us, give us some background about why that’s important and what exactly that means today.

Sandy DeFelice (11:56.077)
Yeah.

Sandy DeFelice (12:05.346)
Hundreds. Hundreds.

Sandy DeFelice (12:10.986)
Yes, you know, it is one of the biggest premises that we have. It’s one of the most important aspects of what we are doing is really getting that attribution right. And you’re exactly right. It’s hundreds. It’s not just 10. And that attribution is informing so many things. It is informing the agents that are working to leverage that attribution.

It is informing areas that the customers are looking for these products and looking for these certain attributes. Long gone are the days where you’re getting a list. People are now using prompts and they’re putting in key words. And if those key words are not associated with your product, you’re not being found. And so a great example is someone may say, what is the best kind of drill?

for a weekend project. So you’ve got all these key pieces within that sentence, right? And that’s what AI is really doing for us. It’s allowing people to be able to find those products. And if your product doesn’t have those attribution, you aren’t going to be found. And that’s what’s really changing the game. And it sounds obvious, but storing those product attribution.

getting that data right, taking them from those silos and putting them in one place, that’s how things are changing. That’s where the game is being played now at that rich attribution. But you know, thing, just, Shelley, just before we move on, that attribution is being used in lots of other areas within products, right? It’s being used in your assortments. It’s being used as you are looking at trends and reviews from your customers because

Based on those, you are making changes within your environment and you are promoting different products based even on what your customers are saying or key words or attributes that they are using to describe your products. So it’s a very, very big closed loop at this point.

Shelley E. Kohan (14:21.815)
think that’s really interesting. So just to use your example, the weekend drill, when you know the wit or one of the major Milwaukee were creating drills, they probably never thought to have something called a weekend drill. But when you look at consumers and they’re saying I just want like a weekend drill, that makes perfect sense. So now you have to take the weekend drill attribute and assign it to a product. Did I get that right? That’s fascinating.

Sandy DeFelice (14:34.21)
The weekend drill, right?

Sandy DeFelice (14:45.762)
That’s right. That’s right. And, and, you know, and people are looking for certain price points, you know, so that needs to be sort of incorporated into those descriptions. There is a, you know, I think every one of us can think about the long description, the short description, but think about social, the way that, you know, there’s only a very small amount of data that can be seen on an iPhone, essentially versus a screen on a computer.

So now we’re into being able to have different text for different type of selling channels. And that is becoming more important. So again, enabling that data, enabling the framework to be able to accommodate those channels, as well as how customers are searching you is incredibly key.

Shelley E. Kohan (15:36.455)
I think that is absolutely spot on going in. That’s a great 2026 kind of mantra for sure. So tell me what’s happening with the Gentic AI and what do you see next? Like what can we look forward to in the next year, two years?

Sandy DeFelice (15:43.318)
Yeah, absolutely.

Sandy DeFelice (15:50.287)
Yes, I am. I think that this is going to be the real game changer. I think in my opinion where AI was more of an enabler, you know, there was still a lot of human intervention with AI and decisioning. I I still think that that’s going to be the case. But what’s different about the agentic component is it is really creating a much broader impact in your environment. It’s

It’s following a process through and it’s actually creating execution. So, Agentic is a really, really big game changer in terms of getting information more quickly, in terms of being able to define and evaluate processes, but also really that execution component, freeing up time in your environment to do the things that are much more

human-based or really need that more human intervention and allowing these processes to run on a much more automatic basis will really drive that efficiency. So what I see is, you know, ultimately people really getting educated on those use cases. Where is that going to help me the most? Where am I going to get the biggest gains? How can I use these agents to look across my enterprise to gain insights?

and to really create these efficiency tasks and execute them. I think you’re going to find the application of those over the course of this next year and really defining those use cases. And then I think that companies will start to really lean into the automation of that. And I think that’s really going to be the next wave of what we see.

Shelley E. Kohan (17:37.747)
interesting. So I think what I think I heard you say is that and I’m certainly not an expert in data management for sure, but there’s structured and there’s unstructured data and a lot of what Agentic is doing is the unstructured piece which has always been the more challenging one to collect. Is that

Sandy DeFelice (17:51.886)
That’s right.

Yeah, I think there’s the unstructured piece, but I think it’s the marrying up of the data within these silos to really get that information. So of course, within our agents, are looking directly into our own. We are getting tremendous power out of our own structure, of centralizing that data. But don’t forget, there’s always going to be other systems. There’s always going to be other processes. So these agents can also connect with those to really create a much more

comprehensive view of that enterprise. And agents are doing very interesting things around analytics as well. they’re able, again, if the data’s there and the data is right, we can get faster information and really make that environment and the people within it much more effective.

Shelley E. Kohan (18:48.707)
So my next kind of question is I’ve heard rumors that the digital shelf that we’ve been talking about for years is slowly disappearing or dying. Is that true and why is that the case?

Sandy DeFelice (18:59.724)
Yeah, I mean, think that, you know, essentially it is becoming a bit invisible because the way that AI is working and the way that it is creating that search ability is so much more advanced that that concept of that digital shelf is disappearing because those agents will essentially be that entire shopping journey and it will really support that.

So that idea of that digital shelf being out there is really reshaping very, very quickly. And I think that’s where the ideas around still the goal of personalization and hyper-personalization for that consumer based on that digital shelf being removed and added in the agentic and the AI really replacing that, that’s really where it’s going to get very exciting pretty fast.

Shelley E. Kohan (19:54.597)
I’m wondering, do you have an example, like, can you give us like a story about a shopping experience that a consumer might be experiencing in the future with agentic commerce or agentic AI?

Sandy DeFelice (20:06.732)
Yeah, I think, I mean, much like we were talking about the weekend drill, right? I think you’re going to instead of in so kind of more of a generic one, but a real one is that, you know, someone may say, show me the best purse, the best handbag that exists today, right?

Think about kind of how arbitrary that is. Nobody on their site is saying best handbag in the world, right? It doesn’t, that’s not how it’s showing up, but that’s how people are asking those questions. So with those agents learning across those products, it is in being informed by where are those best leading trends? And that is what’s being served up to that consumer. So if you’re not, you know, kind of,

If you’ve kind of gone more traditional in the way that you’re describing your product and you haven’t informed these agents, it’s going to be very difficult for the customer to really find you ultimately. So that’s really how things are changing. And that example of just show me the best handbag, what really is going to emerge, it’s going to be what these agents are really learning and what Generative AI is really learning out there to really be able to serve that up to you.

Shelley E. Kohan (21:28.472)
That’s great. So tell me what will digital wave technologies be showcasing this year in January at the NRF show?

Sandy DeFelice (21:36.193)
Yeah, we have a number of things. mean, of course, you know, we’re very, proud of the work that we’re doing in that frame that, you know, the governance and the framework on our platform that we are offering that centralized approach. I mean, I think you will see us talk about the real action that can be taken to really break down those silos and get them centralized. So get the data centralized.

So I think that that will be a very, very big piece of what we’re doing. But the other big piece of that is really showcasing the agent agents that we are working, that we have designed and what we have developed and how that will empower that retailer to really be more efficient. There will be very specific use cases. The way that we will apply that and the gains that we will be able to achieve. That will be very tangible for someone to come by and see what we are doing.

But I also want to highlight that attribution component again. I think what you’re going to see is that our ability to showcase attribution, product attribution as being the center of what the consumer is really driving toward and what is really looking for across the entire enterprise, whether that is in your merchandising solutions or whether that is in product information management, to be able to leverage that attribution.

across the enterprise to make that product available to the customer. I think you’re going to see some really exciting changes and big changes that we’re making there.

Shelley E. Kohan (23:10.685)
exciting. Well Sandy it’s been great having you on today. Thank you so much for sharing with us a peek into the future and what we can expect. Do you have any closing thoughts you’d like to share with our listeners?

Sandy DeFelice (23:22.304)
Yes, thank you. mean, Shelley, it’s been such a pleasure to talk with you today. I’m certainly looking forward to seeing you next week at the show in New York. I think that for me, I would really, really encourage everyone to come by. think you will find a very interesting company that is taking great pride in great investment in changing the game. I think that you will see ways to enable.

your environment from a generative and an agentic perspective using real use cases with real impact. And we welcome everybody and come to us for education as well as great solutions and great technology. We are really excited to see everyone.

Shelley E. Kohan (24:13.475)
That’s great, Sandy. Thank you so much and thank you for being with us today.

Sandy DeFelice (24:17.432)
Thank you so much, Shelley. Take good care and we’ll see you in New York.

Shelley E. Kohan (24:21.166)
Yes?

Shelley E. Kohan (00:01.826)
Hi everybody, and thanks for joining our weekly podcast. I’m Shelley Cohen, and I’m very excited to welcome Eric Gerard, founder and CEO of Brunt Workwear. Welcome, Eric.

Eric Girouard (00:13.928)
Thank you for having me, Shelly. I appreciate it.

Shelley E. Kohan (00:16.66)
Absolutely. So I actually am going to start off with a fun little story that you are going to love. So a week ago, it’s pouring down rain in New York City and the dog has to be walked. And my husband says, I don’t have any good rain boots to walk the dog in. And I said, I know the perfect boot for you. I know it’s a great boot because it sold a million already. And so I went online and I got him a Marlin.

Eric Girouard (00:42.825)
Yep.

Shelley E. Kohan (00:46.21)
boot from brunt. So.

Eric Girouard (00:48.5)
Appreciate the support, that means a lot.

Shelley E. Kohan (00:51.176)
Absolutely. So I’m excited because I think you have a great brand and I always love great brands. But what I love better than great brands is the story behind the brand. you actually started Brunt. Tell us a little bit about the brand and then tell us how you actually started the brand with your childhood buddies. How did that come about?

Eric Girouard (01:11.72)
Yeah, it was a pretty, pretty organic story. I had grown up with my childhood buddies in a small blue collar town where our parents worked at least one blue collar job, a couple of them two blue collar jobs. My dad worked third shift and then we’d roof during the day. And so it’s kind of all we knew. I happen to have a knack for business and was.

didn’t have formal training, and even though my parents didn’t go to college, they were like, maybe you should go and get some foundational stuff. And I ended up going off to college. All my buddies went right into the trades or the military, for the most part, right out of high school. But we stayed really close. And,

I spent about 10 years working for a serial entrepreneur, which was great training. And finally, after 10, 12 years, my buddies and I were at my bachelor party. And they said, why don’t you start a brand for us? You’re doing all this stuff in kind of fashion and coffee and shoes. And I said, well, what would that be? They said, well, we wear the same work boots, the same pants that our fathers did, our grandfathers did. How about a new modern?

workwear brand that looks like we look and talks like we talk and that was where the idea came in 2015 and three years later in 2018 I finally decided to leave my job and start start building grunt.

Shelley E. Kohan (02:34.574)
I love that. And what I love about the story is, and I’m sure you know this story already, so you’re creating a brand by people that actually are gonna be using the products. And Levi, that’s how Levi invented the first gene is that the founder would go out and look at the gold miners and take notes about what they were doing. they needed a tool in the pocket. They needed this, they needed that. So it kind of throws me back to

Eric Girouard (03:01.363)
Love that.

Shelley E. Kohan (03:03.33)
You know, you’re making something and building something for something you know about and your childhood buddies, I’m sure, gave you lots of feedback. In fact, I think a lot of your products are named after them. Is that correct?

Eric Girouard (03:13.885)
Correct. Yeah, yeah. It’s a very unique situation. Obviously, getting the business off the ground, made a ton of mistakes along the way. I’d say there’s two things that we did right that it kind of fundamentally changed the trajectory of the business. The first was from a brand perspective.

My buddies didn’t have training on how to build a brand and so on and so forth, but they understood what they wanted and what they felt and what they believed in and so on and so forth. And so I worked really closely with them when I was working on the actual brand itself, our identity and our being and what we stood for. On the phone with them asking very pointed questions, does this get you excited? I knew if it got me excited, it didn’t get them excited. Didn’t matter because they’re out in the field all day long. If it got them excited, then I knew it was a winner.

They helped, they helped really create the brand and, um, and the whole goal of we wanted our product to bear the brunt of the workday for them and our boots to bear the brunt of the workday and now our apparel. And then the second thing was the product, the first four products that we launched, the first four boots. I, at that point had been on the trades for 10 plus years. I hadn’t been wearing work boots 40, 50 hours a week. Times had changed. Technology had changed. So I worked really closely with those guys, Matt Maron, Dan Bolduck, Skyler Ring, Jeremy Perkins.

They create the Marin, the Perkins, the Bulldog, the Ring, and they gave me the most detailed feedback imaginable from what they did for their specific trade to create those first four boots. And those four boots are still all in the line today.

Shelley E. Kohan (04:47.413)
I love that. I think that’s great. And the other thing that’s interesting about the design process is that, okay, so I saw your video. I love the fact that you put videos on your website that explain the design process because I think as consumers today, it’s important for them to understand the story, the brand, you know. And so I watched your fantastic video on the Chevlyn hoodie and the whole design process fascinated me. So can you talk a little bit about that? And also,

Eric Girouard (05:10.695)
Yes.

Shelley E. Kohan (05:17.279)
I think you’re very forward thinking because you designed that PFAS free. So tell us a little bit about how that came about too.

Eric Girouard (05:22.407)
Mm-hmm.

Yeah, so when we knew we were going to enter the apparel market early in our life cycle, but we knew we couldn’t just slap a logo on another sweatshirt and it had to be different. It had to bring some type of value to the consumer. so similarly, we started from the ground floor and started looking at sweatshirts. I remember looking at some of my buddy’s sweatshirts where they were breaking down, where they were ripping, where they were tearing, what was happening. And from the every

every stitch, every seam, every feature, every functionality is completely purpose-built and we took

what could have easily been just a generic hoodie and really ramped it up. It’s got a big, you know, from the fabric, which is PFAS free. has DWR in it, so water will beat off to keep them dry in the snow and the rain, but it’s also PFAS free, which is hard to accomplish. And the market’s been moving there over the past few years and in the future it’s going to be required. So we figured let’s just jump to the end point and do it earlier than most. And so obviously a lot of people appreciate the PFAS free for those that understand what that means.

you

Eric Girouard (06:32.499)
So that’s that. And then the hood, oversized hood, it’s hard hat compatible, can go over a hard hat if needed, over a hat. No drawstrings. So drawstrings are dangerous on a lot of job sites. They can get sucked into tools and circular saws. And so it has neck snaps instead. So it can be snapped up right underneath the chin and to basically kind of turn into a turtleneck on those really cold days. Left unsnapped when you don’t need it. And then a very large oversized belly pocket that has a cell phone holder in the inside.

That’s a good example of like normally people put the cell, if they put a cell phone holder and they put it sideways and then the phone kind of falls sideways, we angled it so that it couldn’t fall out. And then we put catch corners in the bottom corner. So guys have nuts or bolts or you change or screws floating around in the bottom of the sweatshirt. It doesn’t fall out of the left to the right. And so every feature, every functionality has to have a purpose for us to put into our product. we’ve sold hundreds of thousands of the Chevrolet hoodie.

people that get it just absolutely love it.

Shelley E. Kohan (07:33.133)
It’s a very mindful design process, which is what I love about it. And I have to imagine with all this do it yourself, working at home stuff. mean, those are great, great examples of why the secondary market, I know your markets really tradesmen, but there’s a secondary market of people that are doing jobs at home. And you just mentioned like six safety features that people working at home should be thinking about.

Eric Girouard (07:48.231)
Yeah.

Eric Girouard (07:53.735)
Yeah.

Yeah. And the core difference there is we’re happy to serve either customer is the hardcore tradesman that’s out there five days, know, five, six days a week, 40, 50 hours. They’ll probably go through one or two sweatshirts a year, whereas the DIY kind of weekend person that might last them three, four years. It’s just the extended life of it, which is the benefit, I guess. So, yeah.

Shelley E. Kohan (08:17.345)
That’s great. OK, so the work where landscape has actually changed. We’re actually seeing growth in trade workers in the US. I think there’s over 30 million trade workers now. And you kind of mentioned something I’ve read in the past about Gen Z’s becoming the quote unquote tool belt generation. Can you talk a little bit about this new generation that’s kind of your target market?

Eric Girouard (08:42.055)
Yeah, so obviously the whole US market’s got about 30 million folks that work in these trade slash blue collar jobs, however you define them, and the Bureau of Labor Statistics actually classifies these things. what’s unique is…

Two things are happening. The amount of Gen Z that is applying to trade schools is up 20 % year over year. It used to be pretty flat, sometimes down. really this past year. It’s been up 20%. So it shows you a lot of the younger folks of the Gen Z population are actually raising their hand and saying they want to go to these trade schools. And it’s a unique.

you can be good or you can be lucky. Five years ago when we started Brunt, we didn’t see this coming and we just kind of got lucky that this is happening. But you see the investment from the government into construction and infrastructure into the country. That money means there’s going to be projects. Those projects need people to build them and bring them to life and build the buildings that we work in, the houses we sleep in, the roads we drive in, the electrical that powers everything. And so there’s more demand for that.

type of skill and work that’s out there. think that Gen Z population is starting to realize, wow, this could actually be not only potentially lucrative and create a lot of success, but also a lot of flexibility and freedom and entrepreneurship. If that’s the path they want to go down, they can choose when they want to work. They could work their own hours. There’s a lot of freedom that comes along with that. And I think they’re starting to realize that. so yeah, we’re just happy to be here to kind of…

be the brand that’s supporting that generation that obviously they’re loving by the droves and the fact that the kind of wind is behind our sails. We’re grateful for but I can’t say we strategically planned that five, six years ago.

Shelley E. Kohan (10:37.922)
Well, here’s some more good news. think Gen Alpha, which enters the workforce, I believe next year, like it’s crazy that Gen Alpha is already coming in the workforce. But the Gen Alphas are going to have that same kind of mentality of really wanting to work with their hands, with the trades. And I think it’s a great sense of feeling of contribution.

Eric Girouard (10:46.696)
Right.

Eric Girouard (10:59.997)
Right, right, exactly. Yeah, and it’s interesting because…

You know, as I was as I was growing up, definitely my father’s generation, but as I was growing up, especially with my buddies that I sort of the brain with, there was kind of the trades were if you don’t go to college, you go into the trades. And it was kind of somewhat looked down upon. And what’s really happened recently and it’s been kind of Brun’s, you know, unspoken mission is to really shine a light on the positive side of the trades, the success factors, the

all the benefits that come along with it. And I think that you’re starting to see that shift, generational shift where people are like, whoa, why would I go to, you know, rack up $100,000 of debt and go to school? I’m not really sure exactly what I want to do yet in life. How about I go right into the trades? can make really good money, so on, so forth. And so I think people that there’s a perception and a stigma that’s starting to finally change in a positive way.

Shelley E. Kohan (11:59.915)
It’s great and I’ll tell you a quick story. One is my son who’s choosing the college route said to me I do not want any debt coming out of college So I have to pick a college that I will have zero debt and three of his friends are actually going the trades Worker route and so what nice what high schools are doing now. I don’t know if you know this but at least in some of the New York schools that the actual high schools now have classes you take to learn to be the trade in

Eric Girouard (12:15.933)
Yep, yep.

Shelley E. Kohan (12:29.684)
in high school. So they leave the high school, they go to a facility, a vocational school, and they’re learning different types of trades. So it’s fantastic. So when they graduate high school, they’ve already been trained and they’ve docked some work hours. So I think you’re going to see growth in this as well.

Eric Girouard (12:30.974)
that’s great.

Eric Girouard (12:37.575)
Yeah.

Eric Girouard (12:43.495)
Yeah, that’s great. Yeah, that’s fantastic. Love to hear that.

Shelley E. Kohan (12:48.706)
So let’s switch over to marketing. Did you go to school for marketing by any chance?

Eric Girouard (12:52.623)
So I went to a very, this business school I went to is up here in New England, very small business school called Babson and it’s, you really only, yeah, Babson College, yes. So you really lead there. They don’t have, you leave with a bachelor’s of science in entrepreneurship. So it’s pretty general. Obviously marketing is a key component of entrepreneurship, but marketing is kind of my, if I had to do one thing in life, I’d say I’m a marketer at my core.

Shelley E. Kohan (13:00.719)
I know Babson. Yeah.

Shelley E. Kohan (13:10.797)
Yeah. Okay.

Shelley E. Kohan (13:20.75)
Oh my God. And so the reason I asked you if you went to school for it, but now it’s just innate within you, I’m learning, is that the marketing you’re doing is crazy. It’s kind of like a different playbook for a new brand coming into the marketplace. So I’d love for you to talk a little bit about, although I’m going to be transparent and honest, I am not a Patriots fan. I’m a Steelers fan, but I love the fact that you’re from New England.

Eric Girouard (13:31.112)
Mm-hmm.

Shelley E. Kohan (13:47.011)
and you are supporting the patrons. Tell us a little bit how all that came about because it matches perfectly with your brand ethos.

Eric Girouard (13:54.996)
Yeah, the first few years we weren’t able to partner with NFL league level teams and things of that nature. And we had a very different playbook. This was the first year the business got to a size where we were able to even entertain those conversations.

Eric Girouard (14:35.571)
That’s really representative of Brunt, those guys that are out there on the field crew in the snow, in the rain, in the heat, in the summer, just putting in the work, making sure those players can have a top tier field to play on. And the conversation quickly shifted to we want to actually sponsor the Gillette Stadium field crew team. And yeah, and here we are. We are an official sponsor of the New England Patriots, Gillette Stadium, and then obviously the Gillette Stadium field crew.

Shelley E. Kohan (14:42.638)
Shelley E. Kohan (14:56.397)
I love it.

Eric Girouard (15:05.491)
about nine or so folks that were.

Shelley E. Kohan (15:09.058)
I love that. That’s fantastic. And I know you have work, you’re doing some stuff with the Bruins and some NASCAR stuff and motocross, right?

Eric Girouard (15:15.963)
Yeah. Yeah. So we have a big partnerships consortium of folks. And obviously there’s the New England Patriots, there’s the Bruins through the TD Garda Bull Gang. Some of the folks that flipped the court to ice and ice back to court during the night. And then we’re in NASCAR, we’re in Snowcross. We have partnerships with folks that we know our customer really loves and enjoys following on social media like Travis Pastrana.

Seroni, Hannah Baron, and so we’ve got this great group of partners. And we use that to amplify the Bernstein. We always tie it into what we do and how we do it, and the blue collar kind of trades work. And it’s been great for the business, for the brand, for the community, and the customers love it.

Shelley E. Kohan (16:05.862)
I know. I think it’s great that you’re doing all that work. you said something really important was community. as you know, consumers today, they really want brands that are contributing to the community. And you do that in a big way.

Eric Girouard (16:18.983)
Yes, yes, we do. We do what we can and as we grow we continue to do more, but our biggest initiative has been we’ve donated today. We have a boot donation program and we’ve donated.

Shelley E. Kohan (16:32.519)
No.

Eric Girouard (16:34.099)
Just a couple weeks ago, we donated our 20,000th pair of boots to students at trade schools. And our goal is by 2030 to donate 100,000 pairs of boots to students in trade schools. And so it’s very, very unique. We partner with.

either the head of the trade school, sometimes called the principal, sometimes director, whatever it may be. We partner with them, we get the products delivered to them. If it’s in our area, we send someone from the company, whether it’s myself or other folks in the team, to talk to the students about.

right their futures are and so on and so forth. what’s even more shocking is a lot of the times these are these students’ first pair of actual work boots, safety rated work boots that they’ve ever had. And they’re actually in school learning the trades. And so it’s kind of a, we don’t ask for anything in return. We don’t know quid pro quo. just, I believe you put good out into the universe. It’ll come back to you in other ways.

Shelley E. Kohan (17:31.468)
Yeah, definitely. I think that’s great. And thanks for supporting students. I love that. So let’s let’s talk about holiday. We have talked about holiday. So I hear from the grapevine that you did like over three million dollars on Black Friday. And then over the course of the whole Black Friday weekend, it was very positive for you. The numbers I have are that you’re you did like over 15 million. So how’s holiday going for you?

Eric Girouard (17:35.335)
Yeah. Yeah.

Eric Girouard (17:49.768)
Yeah.

Eric Girouard (17:53.266)
Mm-hmm. Yeah, so this this holiday was interesting because of

because of what was going on in the macroeconomic, you know, kind of US at the time, right? And so we’re always from a brunt perspective, we always feel pretty safe and pretty comfortable because we’re not a discretionary purchase. People need work boots and work pants and work hoodies to do their job at the best of times and at the worst of times. And so when you see the economic shifts of, you know, some businesses, software businesses take off when things, you know, during COVID and others obviously

don’t do as well, we’re pretty stable. And so this is the first time going into holiday where we weren’t sure where the consumer sentiment was. There’s a lot of skepticism of what was going on. And so.

hunkered down we stayed disciplined, stayed focused and yeah it was our biggest holiday period ever from record-setting selling days to the number of products that we sold. We ended up actually selling more units of apparel than we did boots in that that period and so that’s the first time that’s ever happened for the business which just shows you how the growth of the apparel side of the business is going in.

Yeah, and it’s incredible. It was just incredible to see the team works all year for it. We start prepping for it. We have a lot of limited edition products that come in and sell out really quickly. And at the end of the day, we participate in a little bit of that holiday feeder, so to speak. we understand we serve a very important purpose. We’re getting people products that they need to do their jobs to keep them safe, to get home to their families at the end of the day. And so.

Eric Girouard (19:37.627)
have fun but we also understand the seriousness of the product that we make.

Shelley E. Kohan (19:44.692)
that’s amazing. I know that last year I believe you launched wholesale, correct?

Eric Girouard (19:49.716)
Correct, yeah, so we launched wholesale in February 15th of 2024, and because we were online for the first three years only, you you could go to bruntworkwear.com to buy our product, couldn’t get it anywhere else, so we wanted to launch in the physical retail world because…

About 65 to 70 % of customers that buy this product still like to go into a store to touch it, to feel it, to try it on, to smell the leather. And so we knew if we wanted to be the most dominant workwear brand in the next few years, we were going to have to be in that channel. Otherwise we were ignoring too many people. And so we launched.

Shelley E. Kohan (20:13.327)
Yeah, me too.

Shelley E. Kohan (20:22.873)
Mm-hmm.

Eric Girouard (20:25.875)
and tested in 110 stores with 20 different retailers that carried our product. And it absolutely, we had no idea how it was going to do. It absolutely exploded. We were sold out of most of our retail accounts within the first week. They wanted more inventory and we.

kind of caught a tiger by the tail and the team stabilized the business, got more inventory, the open up more accounts. We’re now in 858 doors across the country in every state and the business that holds the wholesale part of the business is growing 345 % this year. So it’s an absolute rocket ship. And we love it because our partners that carry our product, obviously they’re in their local communities. They’re in, you know, we’re in.

outside of Boston, they’re in California, in Texas, in Florida, in places that we can never cover that much ground for, and they’re able to service the customers the way they want.

Shelley E. Kohan (21:19.641)
Yeah.

That’s awesome. And can you just name some of the retailers? Like what type of retailers?

Eric Girouard (21:26.995)
Yeah, so there’s a couple different pockets. There’s the national retailers. I think of like, Shields, Boot Barn, come to mind.

So they have kind of a national presence. Then there’s the regional folks like whistle workwear and shoot area on the West Coast or super shoes in the East Coast. They cover a region of the country. Then there’s the farm and fleet channel Midwest. I think of Blaine’s farm and fleet. You can buy a tractor in your horse, your horse tranquilizer and brunt boots in the same store. There’s the independents that are really authentic. Like I think of Frank’s in Pittsburgh, they have just two stores

Shelley E. Kohan (22:01.731)
Yeah.

Eric Girouard (22:07.645)
but it’s the place you go if you live in Pittsburgh to get your workwear and your work boots. And then last but not least is the shoe truck mobiles. There’s this network of truck mobiles that have relationships with the biggest manufacturers in the country and they go there and service them and the employees are reimbursed. There’s kind of five different. They’re slightly different and it’s a little niche, yeah. yeah.

Shelley E. Kohan (22:28.783)
Love it, yeah.

that’s great. So what can we expect in 2026? Do you think you’re going to eventually open up a store, a physical store?

Eric Girouard (22:40.019)
So yeah, so we are working on, we just actually started actual construction yesterday on our first ever flagship store. Demo had happened over the past few weeks, but construction officially started yesterday morning. And the goal is it’s gonna be a mile from our headquarters so we can keep a.

pulse on it and it’s much as it’s gonna be our first flagship retail store, it’s gonna be an incredible experience and show the brand head to toe in its own environment. It’s also gonna be a great place for the employees and the team to really see the brand in the physical world and play with merchandising and how things fit together. And then I’d say third, it’s gonna be a really powerful place for the community. It’s right on Main Street in North Reading where we’re headquartered.

It’s a small town, small blue collar suburb, a lot of hardworking folks. We’re have a lot of events there and to kind of add a little bit of life to downtown Main Street that was a seafood restaurant that closed down a few years ago. So it was kind left behind and we are completely, we brought it down to the studs and are gonna build an incredible Brent branded experience.

Shelley E. Kohan (23:50.159)
Well, that’s great. Eric, you have to do me a favor. You have to invite me to the grand opening because I cannot wait to come and check out the store and see how you kind of merchandise everything together. I think that’s great. And I also want to thank you for serving over 1.6 million tradespeople in every state. So thank you for your contributions to the industry and all the work that you’re doing in the communities.

Eric Girouard (23:53.743)
I will. I would love to have you.

Eric Girouard (24:06.823)
Yes.

Eric Girouard (24:12.093)
Thank you. We appreciate it. We’re proud to do it.

Shelley E. Kohan (24:15.703)
And thanks for being here. Our listeners, I’m sure, are thrilled to hear your story. So thanks for being here today, especially during a busy time. So good luck with the rest of the year and good luck in 2026. I’m sure we’ll have you back.

Eric Girouard (24:27.38)
Thank you. Looking forward to it.