Retailers are not feeling like everything is gonna be okay, and the decisions that they make. Will ultimately impact what’s available for consumers to buy. So it’s all interrelated. Retail Unwrapped is a weekly podcast hosted by Shelly Cohan from the Robin Report. Each episode dives into the latest trends and developments in the retail industry.

Join them as they discuss interesting topics and interview industry leaders keeping you in the loop with everything retail. Hi everybody, and thanks. For joining our weekly podcast, I’m Shelly Cohan. I’m very excited to welcome back Nikki Baird. Hey Nikki, how are you? I’m good. Thanks Shelly. I’m really glad to be here.

It’s always a pleasure. I think you and I have been talking shop for like over a decade. I. Oh, let’s not count the years. Well, currently your VP of strategy and product at Actos, which is a global retail software solutions provider, um, also known as retail technology. And today we’re gonna have a fun conversation.

We’re gonna be talking about how, what, where should retailers be spending their time and resources right now? There’s been a lot of uncertainty in the beginning of. And also we can touch upon maybe some store experiences, store tech investments, and I’m gonna ask you to give us some of your holiday predictions, if that’s okay with you?

Yeah, sounds good. I mean, it’s almost July, so we’re halfway there. I know. I can’t believe it. Um, so retailers, this whole year has been very uncertain. There’s uncertainty with retailer pricing, logistics, supply chain, consumer purchasing behavior, and I could go on and on and on. So if you could kind of share with us, you know, what’s going on with retailers, what’s going on with consumers, and any other, uh, points that you wanna bring up regarding our global economic environment.

And that that global economic environment is definitely very tough right now, and not because there’s a lot of bad news out there. It’s really more just the level of uncertainty is so high, so. The, with the US and tariffs and on again, off again, delayed again. Uh, it just creates an environment for retailers where they almost can’t plan anything.

They can’t plan how much inventory to buy. They can’t plan when to take it in because they don’t know what price it will be by the time it lands. Uh, and then from a global perspective, that’s very US centric, but there’s spill on effects, right? If you’re in the UK now. You’re worried about dumping from China because none of those Chinese goods are coming to the us and is that gonna undercut your price and your offering?

Uh, so I think there’s, there’s. An enormous amount of complexity out there. I will say from the consumer side, uh, you know, we saw in some of the numbers some increase in confidence, uh, very recently. And the um, I think part of the challenge is they sort of are saying, well, we haven’t seen those price increases so we don’t have to worry so much about whether tariffs are gonna be a thing, so maybe everything’s gonna be okay.

And, and I think the disconnect there is that retailers are not feeling like everything is gonna be okay and the decisions that they make will ultimately impact what’s available for consumers to buy. So it’s all interrelated. Yeah, it certainly is. Um, and the other thing that I’m kind of hearing a lot about and.

Which is everything. Going back to the store experience, which you and I have been talking about for a long time, the store experience is really what makes a difference, uh, for the consumer. It builds the loyalty, it’s longevity. Um, the store has never been dead. I’m one of the few people you and I that talk about stores

Not dead, everybody, but, um, what I am seeing is a heightened sensitivity for the focus on store experience. So maybe you can touch upon that for us. Yeah, I think there’s, uh, there, well, there’s a couple of factors to it. So one factor is e-commerce, uh, has gotten a lot more expensive, so it’s not as profitable as it used to be.

And. It was easy when you could make a small investment and kind of juice your e-commerce results really quickly and easily, and those days are gone. So every uh, growth opportunity for retailers has to come from kind of the hard fought ground war, if you will, for the consumer. And more of that happens in the store and, and today the store has actually more leverage than.

Online does because you can use it for so many more things. You can use it as part of fulfillment. You can use it as part of the experience, the brand building part of the experience. And you use it for the thing that it’s there for to begin with, which is selling goods. So there’s, there’s a lot more opportunity in the store today.

And then I think there’s. Uh, just this recognition that the dollar that you invest in stores is actually gonna pay off a little bit better than the dollar that you invest in online. So Nikki, I’m just curious if you’ve seen anything in terms of, you know, what customers are actually spending, whether it’s online or in a store, and that, compared to the sentiment readings that we’re getting in the industry.

Yeah, the, uh, I know like from Aptos perspective, we have a basket of our retail customers that we look at aggregated to see sales results. And for the last three months they’ve been posting double digit sales increases in stores on average. So, uh, the speculation is this is pull forward spending that happened in anticipation of tariffs hitting.

Apparel, which, uh, Aptos focuses on a lot, is an area where there was expected to be huge tariff impacts. A lot of that comes from China, uh, in particular. So, uh, so whether that continues is definitely the big question, right? NRF kind of called out that they feel like that pull forward spending is leveling off, uh, as far as the split between store and online.

Uh, it’s interesting, like, I mean, online still keeps growing at a little bit of a faster pace than than store sales do, but it’s, it’s not gangbusters, it’s definitely kind of leveling off. So, um, there does not seem to be big behavior changes from a purchasing perspective. I do think they’re seeing big behavior changes in the funnel, in the search that happens that ultimately leads to them buying a product.

That is getting very disrupted these days. Oh, that’s interesting. Can you tell me more about that? Yeah, that’s all Gen AI and search being transferred over to chats, uh, like chat GPT and perplexity and people asking for like, I’m going to do X, Y, Z. What’s the best product for that? Um, or giving, you know, a lot of details and context so.

The, um, the LLMs are pulling together, you know, much greater, much broader inputs into providing product information to drive those decisions. And so the search funnel goes from like Chachi, bt, or perplexity, straight to the retailer’s product detail page, and everything else gets cut out in between. So there is, there’s a lot of concern about what that means, and it has implications for the store too.

It’s really fascinating because answering that kind of question is exactly the kind of thing that a store associate would do, right? You come in and you say, well, I’m going to this event and I’m not sure if it’s super dressy or if it’s only kind of dressy, and can you help me figure out what the right dress would be, right?

That’s what a store associate is for, and so now we’re seeing that kind of experience and expectation shifting to getting that kind of feedback. Online too. So the, the melding between that online and store experience, I think is getting closer than ever. Wow, that’s really fascinating. And uh, now that you say it, it makes a lot of sense because that’s where a lot of our consumers are getting lots of their information.

I heard one, uh, company tell me that they have products that have 2,700 attributes. That, that’s to me like, oh my God. Like I didn’t know a product could have 2,700 attributes. I, I agree. Uh, I mean I, uh, there’s, there’s a lot of interest. We’re seeing it too in, um, enhancing product, tagging, I mean, attributes tagging same diff in in a lot of ways.

Right? Um, but it is to say like. I wanna tag it with lifestyle tags, so not just product descriptors, like it’s black and you know, it’s this long and it’s made of cotton or whatever. Um, I wanna know, is this evening wear, is this date wear is this right? It’s like, okay, you have to suddenly put in a whole bunch more details because.

As good as, so a lot of the, a lot of the Gen AI product search, it’s really looking at the description that’s on the product detail page, the marketing text, right. And right. So they’re trying to, retailers are trying to take a lot of what goes into that marketing text. And actually attribute it on the products so that you can, so that you can search performance at the backend.

Right. The consumer came to my site asking perplexity about what to wear to a wedding when I don’t actually know the brighter groom that well. And then, you know, how do you filter that into your products so that you can say, Hey, for this is a new lifestyle category, are we addressing this category? How do you find those items to say, yes you are.

No, you’re not. It’s tough. Yeah. No, that’s interesting. I also wanna go back to something you said. I wanna see if you’re seeing this too. Going back to the tariff conversation, which I’ve had way too many conversations about, but you talked about the pricing thing, and I, I know that, um, a lot of companies that I’ve talked to and a lot of colleagues I’ve talked to in the industry.

You know, the pricing really hasn’t hit yet because a lot of the bigger companies kind of moved their inventory forward. They got things earlier. So this kind of pricing really isn’t gonna hit till third or fourth quarter, or what’s your opinion on all that? Yeah, I agree. I see the same thing like the, the tariffs haven’t hit even when, even when a retailer is paying tariff, they’re not passing that on to the consumer yet.

Partly because it’s also very expensive to reprice things that are already priced right. A lot of the stuff that comes in is already priced and to change out all of those price tickets is really labor intensive and time consuming. So nobody wants to do that. So I see more pressure to, um, building those price increases into future purchases where you can change the pricing at the source.

And, and have that efficiency. Um, but also the same thing with the inventory levels. They pulled in a lot of inventory. They’re still chewing through pre tariff risked goods. And so though they, they don’t reflect a price increase, uh, and they’re not going to, those will run out if in some cases they haven’t already.

Uh, and then, you know, I, I keep coming back to fashion, but I feel like fashion’s the, the most difficult case, right? Like the. The timeline between, you know, an avocado and a new, you know, 40% tariff that you then have to apply at the shelf. That’s like a couple weeks that’s already there. It’s, we’re already dealing with it with fashion.

The, the tariffs are going to come in on goods that you’re not actually gonna see at the, on the shelf or in the store until back to school or October. So that’s, that’s the, the hard part about trying to filter in. Well, how are consumers responding to tariffs? Well, they’re like, Hey, tariffs aren’t a problem, because, yeah, my groceries are a little more expensive, but I’m not seeing it in everything else that I buy.

It’s like, yet you’re not seeing it yet? I. So let me ask you, so with everything going on, uh, it’s very difficult for retailers to kind of make decisions on where to invest their capital, invest their money. So talk to me a little bit, I know you’re a retail tech expert, so tell us where should retailers really kind of be making those investments?

I think retailers have, um, in some cases they’re finding their hands kind of forced because we’re at the tail end of a long chain of events that. Uh, our have been really challenging for retailers on the technology front, especially in stores. So, you know, the pandemic hit, nobody was going to stores, nobody’s gonna invest in stores.

They’re all investing in omnichannel and online. And then when we come out of that, all that store technology sat for, you know, two years and the supply chain then got completely wrecked even for devices that would go into the store that got impacted too. So. Even if retailers were at the end of life for their hardware in stores, they were kind of stuck.

It was really difficult to replace any of that. So here we are a couple years later from that, and some of them are, are like really at the end of life of, you know, well beyond the end of life for some of this hardware. And then we have PCI 4.0 is gonna come and it’s gonna wreck all the, um, compliance for their payment devices like.

There’s a lot of needed spend that is going to come for hardware in stores. And whenever retailers have to make a big hardware decision, that’s when they say, well, what am I gonna get out of this? I gotta improve the customer experience to make this worth something. So what am I gonna do to get that? And I think, you know, now is the time, even though everybody wants to be super cautious about, um, about spending any money, because who knows what tomorrow is going to bring.

The, the problem is that if tariffs apply to electronics, that’s gonna hit the store tech that you need too. So better to try to do some of this stuff now and disrupt your stores when consumers maybe are worried themselves and not spending as aggressively as they could do it. Now while you can, or do it while you don’t have as much inventory to sell, because that is a decision that they are making.

They’re saying, well, I’m not gonna buy as much. Because I don’t want it to come in and then get plastered with tariffs. Uh, so that means holiday season could be challenging for product availability as well. Not to get into that next question already, but No, that’s true. And can you just explain PCI do four, what that is and why retailers should be thinking about that?

I’m sure they already are, but what’s the, it’s the payment, um, payment industry requirements for, uh, payment security. And, um, there’s, there’s different standards they renew at a different time period, but it’s almost, you have to think about it almost like, you know, windows 10 and having to move to Windows 11.

It’s a lot of the, uh, guidelines that go into basically the operating system that runs on the payment device. So not the register itself, but when you tap that card, uh, or insert that card, that device. Um, has a lifespan and that lifespan is limited by the security, um, compliance that it achieves. And there’s a point where it, it can’t be upgraded to the next level of compliance.

And PCI 4.0 is, is a pretty big one. Wow. Okay. So retailers have to be really on top of that as well. So let’s hop into our holiday predictions, if you don’t mind. What, what the heck is gonna happen this holiday? It’s like, I’ve always said, it’s always kind of like a big guess, but even now I think it’s even like, how do you even predict holiday?

I, I, every year I feel like, oh, this year is the hardest year ever. I definitely feel that way. This year, like, so I look at it as, um, there’s like push and pull pressures, right? So right now consumers are feeling okay and, and they’ve pulled forward a lot of spending, but there’s no way that they’ve pulled forward a whole year’s worth of spending.

So we really could get to a place where consumers decide in the fall they’re sick of it, they’re gonna come back and they’re gonna come back in forest. And that would be great. But we also have retailers who are saying. I don’t wanna bring in a lot of inventory and have it be super expensive because it got hit with tariffs that I couldn’t anticipate.

So they’re tamping down their exposure by buying less inventory. That would be what falls for back to school and for holiday. So it could be that we have not enough inventory for holiday, and we have a lot of eager consumers chasing not enough goods. So then retailers will maybe hit their profit objectives.

But they won’t hit their revenue objectives because they didn’t have enough to sell. They didn’t have to mark it down, but they didn’t have enough to sell to hit their, their revenue goals. Or we could have, you know, high prices and consumers saying, I’m not gonna buy this stuff. It’s too expensive. And then retailers being forced to mark a bunch of stuff down, even if they didn’t buy a lot.

Right? There’s, there’s so many different ways that things could go, and you just have to look at the combination of which things went, which way. In order to see what’s gonna happen. But I do think, like I see, retailers are not buying as much inventory for holiday because they’re worried about what price that inventory is going to have to be sold at and, and I think if we don’t see a tariff impact hit, then consumers will actually be the inflationary driver rather than tariffs because there’s gonna be too many dollars chasing too few goods.

Right. And have you seen any type of indicators, like for Mother’s Day or Father’s Day on consumers and are they spending as much or more than last year on Yeah, they’ve been spending more. I mean that’s the, that’s the part that’s like irritating all of this is that consumers like you look at their confidence level and sure it went up a little bit, but it’s way down compared to.

Certainly before the pandemic and even compared to a couple years ago or December, it’s way down. And they’re saying, you know, I am not confident in the future, but they’re spending like the future is assured. So that gap between. What customers say they’re feeling and what they’re actually doing out in the market is as wide as it’s ever been.

So that’s the part that it’s like, well, at what point does the lack of confidence translate into a lack of spend? Or what, at what point does the spend start translating into better confidence? And we’re not seeing either one of those things. So that, that’s the wild card in all of this is what customers say they feel and what they do.

It hasn’t matched up for like a year. It’s really difficult to predict what’s gonna happen next. I know it’s a, and it always is too. So let’s talk about the holidays and so we, when, when they do come to the store, it has to be a good experience, has to be a positive experience. What are you suggesting in terms of that?

Smooth kind of experience, how do they deepen loyalty? What are some in investments that you can do from a, a associate perspective to arm them with tools that can make the experience the best? Yeah, I think, I think that’s the, uh, that’s the big question. So I see a lot of retailers get to distracted with, um, I mean, we still have a open debate about whether self-checkout in stores outside of the grocery world and even actually in the grocery world, right?

Self-checkout, is it something you should be doing or not? I. And, and I’ll set grocery aside in any other store experience. The store associate is the center of that experience. They are the person, they are the vehicle that the retailer has that enables ’em to deliver the experience the, to the customer.

So anything that you do that improves that store associates position is going to help. And we’ve seen, um, you know, much more thinking around. Providing kind of just in time insights, I think Oh yeah. Is a big area of interest. It’s like I can’t give you a whole dashboard about this customer’s, you know, life’s lifetime history with, with us as a brand.

But I can tell you, hey, the last time they interacted with us, it was with the call center and they gave us a poor experience. So now you as the store associate, have better context for a jumping off point. So trying to surface. Those sound bites of customer insight that you can feed into the store associate and give them, that gives them as many tools as anything else you would do.

So if you can get that into the point of sale, if you can get that alongside the customer record or the products that you’re showing them. Then you really already are giving store associates a leg up because they’re the, they’re the least informed people in the, in the company when it comes to customers.

All of that stuff that we know about customers happens online, and then we have to start over from scratch when they walk in the store. So anything you can do to bridge that gap is gonna help a lot. Yeah, I agree. I think it’s always been a challenge at that store level. I swear to God, I still like, don’t even laugh at me, Nikki, when every time I go to the grocery store and do self checkout, I always have a problem.

I’m sure it’s a me thing, but I, I, it’s never smooth and I do appreciate the quickness of it, but I’m always ringing the attend button. It’s very rare I don’t have to do that. So, uh, you’re right in that kind of apparel and other areas, uh, I think it is important to have that last touch. Human touch. Yes. I, I totally agree.

And I think that, um, like I just saw something, um, kind of comparing Glossier to, uh, apple, right? They’re getting rid of cash wraps in the store and they’re, um, just investing in mobile for the store associates. And they said one of the reasons why they did it was because they didn’t want the purchase part of it to feel like.

Something final. Right? Like, like that’s the end of the journey. What they wanted was for that to feel like, no, now the journey continues. Yes, you walk out of the door, but then the journey continues in how you engage with me as a brand. And I thought that was a brilliant way of looking at it. It’s like there is a finality sense of when I walk up to the cash wrap and I give you my money and you give me my receipt and my goods, and I walk out the door that something is completed and, and so to build in that.

That human as the last touch in the store gives you a much more solid jumping off point for continuing that conversation and that journey in other places. I love how you put that in perspective. That’s amazing. And that’s absolutely, uh, I think where we have to be in our industry right now. So, uh, always a pleasure to have you.

Do you have any closing thoughts that you’d like to add before we part. Uh, I mean, I have all, uh, all sympathies For retailers, it really is like more uncertain, more difficult to make decisions. Uh, but at the same time, I do think there’s opportunity in others. Hesitation, right? Like in times of uncertainty, the people who, who feel certain about what they can do next.

Those are the people who, you know, break out of the pack and, and I feel like this is one of those moments where you have that opportunity. So I would say consider your options in light of that perspective. That’s great. Thank you so much and thank you for your time today and I look forward to chatting with you soon.

Thanks so much. Thanks for having me in Anytime.

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