Deborah Weinswig on the Future of Retail and AI

Deborah Weinswig  00:00

The most important thing is, right? The customer, retailer, brand relationship we're looking at, we're advising our clients to put even more people in the store to build and so there is

Bret Schnitker  00:16

a backlash to being separated. Covid separated. Us all people want connection. We're human beings. And if you want real brand integrity and and, you know, connect and and movement and loyalty and experience, it's people to people. I still think it's still people to people.

Emily Lane  00:43

Welcome to Clothing Coulture, a fashion industry podcast at the intersection of technology and innovation. I'm Emily Lane

Bret Schnitker  00:51

and I'm Bret Schnitker. We speak with experts and disruptors who are moving the industry forward and discuss solutions to real industry challenges.

Emily Lane  00:59

Clothing Coulture is produced by Stars Design Group, a global design and production house with more than 30 years of experience.

Emily Lane  01:09

Welcome back to another episode of clothing Coulture Today, we are excited to reintroduce a very special guest, someone who truly needs no introduction in the world of retail innovation and emerging technology, we are joined once again, by Deborah Weinswig, the CEO and founder of Coresite Research and one of the most respected voices shaping the future of retail globally. We've had the privilege of catching up with Deborah at several industry leadership events over the past couple of years, and every time, her insights leave us energized, thinking differently and just really understanding the landscape in a fresh new way. So we're especially excited to bring that same level of clarity, curiosity and forward vision back to our audience today. For anyone new to Deborah's work, she leads core site research, a global research and advisory firm known for helping retailers and brands accelerate innovation in a rapidly shifting landscape. Deborah's expertise spans retail and technology, AI, live streaming, retail, media, data monetization and much, much more. She brings a unique global perspective shaped by years as an analyst, strategist, board, board member and you know it best selling author, today, we're catching up on all things retail, looking back at the lessons from 2025 and looking ahead at what retailers and brands should be preparing for this year with emerging technology transforming operations. Deborah has a front row seat to it all, and we cannot wait to dive in. Welcome back, Deborah.

Deborah Weinswig  02:53

Thank you. I'm super excited to be here. Nice to see both of you.

Emily Lane  02:56

Yeah, absolutely, we're we've got quite a little road map mapped out. But before we get too much into thinking about what people need to know in today's landscape, I'd love to get a little insight from you on, you know, post 2025 in our, you know, rear view window like, what? What are some of the key takeaways from 2025 that's going to be shaping decisions this year.

Bret Schnitker  03:22

Nothing much happening. Oh, not at all,

Deborah Weinswig  03:25

not in this landscape. I mean, it's because I still feel like we're getting questions on tariffs, and I find that surprising, but I think it goes back to everyone kind of had their game face on, but it really did change a lot of how they do things internally, Process Management, change management, some of the technology. But what's interesting, and I think this will take us into 26 is that we still haven't seen a lot of change in supply chain, which has been interesting. And so I think, I think tariffs threw everybody for a loop. I think that would be number one, number two, we started off the year with a lot of or ended 24 going into 25 with a lot of major bankruptcies. And so, yes, lots Party City, you know, you had Rite Aid and Joanne's like those. Those were significant in in many ways. I mean, there's a lot of market share for grabs. I mean, I saw a lot of analysis around Party City and the amount of, like, balloons they had sold, and people who are living creating, like, entire businesses around capturing that market share. And, that also left a lot of empty boxes as well. And then on the flip side, it was fascinating to see Dollar General and Aldi and Lidl and TJ Maxx and Burlington and Ross Stores all opening a significant number of stores. So you. I would say how we started 25 on the physical landscape, ended much, much differently. And then I'd say number three was like how strong traffic was, right? I mean, depending on what numbers you look at, I mean the ones we look at about 5.7% across the board in 25 and I think a lot of retailers, they're kind of like, how do we top that in 26 so I'm sure there's a lot of what we'll talk about today in terms of how they're thinking about doing that, but those, those would kind of be my my top three,

Bret Schnitker  05:36

certainly more volatility in 2026 some people go drink when things are nervous that Americans go shop, evidently, right?

Emily Lane  05:44

I think it's interesting that, you know, that seems like the retailers that were on the rise are those that specialize in a discount arena,

Bret Schnitker  05:52

which is so strange when you think about tariffs. I mean, talk about margin pressure, costs go through the roof and you still have to sell, you know, address for $1 or something, but it's just, you know, it's kind of insane, but interesting.

Deborah Weinswig  06:06

Yeah, it really was, I think, who, who's gaining share, and who's growing and then, of course, I'm sure, you know, as we talk about 26 we'll talk about some of the change that's already happened this

Bret Schnitker  06:18

year, for sure. You know, we talk about this complicated landscape. Everyone's talking about it. There's tons of this unknown and variability, if I can say that politely, for the political pundits out there, you know, AI is this intriguing subject. And you know, people want to remove the guesswork, the unknown from this kind of equation that's constantly moving. There's fears that it can also immediately replace jobs, create higher unemployment, eventually rule the world for some right, that's you know, on the far end. Let's break this down to 10 main topics on brands and retailers, minds with respect to current market and technology that we can have your quick insight on. Let's start with the first

Emily Lane  07:05

Yeah, I can. I can start with ai demand and forecasting. So this is perhaps the biggest financial lever in Fashion and Retail today, with inventory be between 55 and 70% of a company's working capital. What are clients and the industry in general doing about optimizing inventory, and are there some key insights or technologies that you're excited about

Deborah Weinswig  07:31

that I think, is the question that I think retail has been trying to solve since

Bret Schnitker  07:39

it started. Retail began, right? Yeah, it's, it's, and

Deborah Weinswig  07:42

I will say, I'll run you through this, right? As an analyst, I never understood, you know what gets sold, right? You know it leaves the register. I understand not everything's paid for, but you would have an a number around what that might look like. And you know what comes into the back? Or at least this is my understanding, but yet there's always out of stocks. So to me, right? That was like, that was like my analyst had before I ever went to lane Fung, or was more in operations or whatnot. I was like, I just like, that was like, the fundamental thing I never understood as an analyst is, why can't we just have at least, like 90% on shelf availability? And so I think that now it's even more complicated. You know, the demand forecasting, the inventory allocation, once you have it, thinking about sizes is right. We're seeing dramatic changes in sizes. I think it's gotten more complex. There's a lot more tools, especially

Bret Schnitker  08:45

with the push for inclusivity, right? All of these different points of distribution,

Deborah Weinswig  08:50

yeah, and it's, you know, and you've got kind of online and offline, right? Hopefully we'll, we'll see live streaming at some point, or maybe it's social commerce. Make a make a big hit, but yeah, if you've got those three channels, and then the other thing is, right, if you buy online and pick it up in store, some retailers that goes through your E commerce and some that goes through your store inventory, so it's, it's a lot, I think it just like the simple problems still haven't been solved.

Bret Schnitker  09:20

So with all this exciting AI technology, there's nothing out there that you're excited about to solve this age old problem. Well, it was so I was on that you can talk about.

Deborah Weinswig  09:32

I was on a live webinar with relax, and they're showing how the age basically, you can not have a human in the loop and how the agents can do all this. And I'm literally, what was so funny, it's like, on the recording, it's like, She's frozen. I'm like, No, I'm not frozen. I said my mouth is because you were watching, right? Like a real demo. And you're like, This is. Kind of what you would think. But it actually is in in play. And it's interesting, because he likes has only been focused on kind of grocery, CPG, you know, FMCG, and they're starting to move into, you know, apparel, footwear, accessories, which is where the real challenge is, yeah, you know, having, I mean the out of stock levels are higher. I think is the best way to put it. I know centric has done a lot of really interesting work with apparel, footwear, accessories. I think it goes back to because I've thought about this. It's interesting. We started here. This is the thing. I've thought about this more hours, and I care to probably admit because I always worry that people went into the store and they continue to not find what they want, that it would negatively impact store traffic. And so I think that retailers have tried to solve this in many different ways, but we are seeing, I mean, there's really interesting technology. The challenge is, right? Someone comes in, CIO, CTO, CDO. Let's say they choose centric. Then they go to they go somewhere else, right? Or they get promoted, or whatnot, and then the person who made that decision, maybe somebody else wants to make a different decision, or think about how to use centric in a different way. And so

Bret Schnitker  11:15

I just, and that's expensive and time consuming, right?

Deborah Weinswig  11:19

That's right. That's exactly right. And I think that ends up being the issue, and that's, I think, the challenge for retailers in general. I think

Bret Schnitker  11:25

you is there paralysis down that path? I mean, they're just so they just don't know where to turn.

Deborah Weinswig  11:31

I think with AI more generally, we see that because there's this fear, or feeling, however you want to look at it, that everything, all the data has to be perfect.

Bret Schnitker  11:41

Maybe it's fearling. New word called fearling.

Deborah Weinswig  11:47

Yeah, I like that. And I think that the data challenge does cause, you know, analysis paralysis, or whatever you want to call it, or fearling. I like that too, and we haven't seen things move as fast as we might have hoped, because I think the technology is now ahead of where we're seeing it being implemented.

Bret Schnitker  12:14

Yeah, I always see that. Let's talk about AI personalization and clienting. You know, all brands, especially better in luxury, are focused on trying to attract and grow Gen Z and Gen Alpha. They're seeing issues with this. You know, 90% or more clients today expect personalization, and personalization, we know, increases higher conversion and loyalty. Where on the path are we that on the, you know, for this, for mass retailers, better in luxury specialty, what are the challenges for implementation? I mean, we, I mean, we know a few. But you know, where do you see this challenge happening in the whole personalization front, a lot of conversation is going around on this.

Deborah Weinswig  12:59

It's interesting because Kathy McCabe at proximity, they tend to work with more prestige, prestige ish and so, and I know that they've had phenomenal impact on the companies they work with. And like Lafayette 148 they're always very happy to get out there and tell you, like the impact they've had. And she's also just like the loveliest human being ever. So I think that if you're prestige, ish, right, there's a solution. I think it's like for the rest of us, what do we do? And then we're hearing more and more around loyalty, which plays into that, and then gamification, which I love, because, I mean, hey, I've spent hours on apps trying to, like, move a little, like ball from like, you know, a cup to a cup to a cup to like, you know, get a percentage off, and you realize, right? But it's more just like, oh, I won, right? I'm not. And I think that that, like, if we can, if we can, start to bring the fun back in right? I I think that, just like we had a very good 25 a lot of companies are starting to talk about gamification. I think we may just scrape the surface in 26 because it does require a lot of things to be put in place. But if that can set us up for 27 I mean that that really, you're talking about, like, a three year amazing story in in retail, which would be fantastic, yeah?

Bret Schnitker  14:28

And you talk about fun, experiential retail, however people spend that, you know? And all in all, even with a difficult season or year, what retail finished up a little over 1% Yeah, was it pretty small, you know? And then you've got tight margins, so there's got to be a way to, you know.

Emily Lane  14:46

But I think gamification makes perfect sense. Everybody's on their phones.

Bret Schnitker  14:50

All Deb wines has the time to move a ball across three things to win. 10% off, right? We can jump on it. I agree.

Deborah Weinswig  14:58

I. I think it also starts to connect you in a different way to some of the brands. And could be okay if you're mean, you can be in a grocery store if you visit three aisles, right? And you take, I mean, it's like you could be on scavenger hunts and stuff like this. I mean, we've done all this in China. We just haven't had the ask, really, in the US or the technology. And so I just, I mean, we've seen it, we've lived it. It's just a matter of, you know, I think that, and I feel like you're, I mean, you guys spend a lot of time in Europe. I feel like there with personalization and gamification. I think that there's just more of that for whatever reason right now. And I think the the US, you know, there's a lot of solid examples for them to look at. It's just a matter of getting started.

Emily Lane  15:51

Yeah, yeah. Moving on to store operations and labor optimization. Labor cost is about 20% of brick and mortar revenue, and with increased demands in store for store employees to do more better service, serve multiple roles, manage online returns, etc, etc, are we asking too much of the current store employee, employee, you know, are retailers finding better ways to balance staffing With respect to, you know, reduced overall staffing sizes, increased traffic patterns and just higher demands.

Deborah Weinswig  16:27

There's a vendor that I could say something that's not so nice. I won't say it. I will just think, but it's the

Bret Schnitker  16:35

vendor who must not be named.

Deborah Weinswig  16:39

But I remember, like 10 years ago, right? There were going to be tablets and associates were going to be enabled, and they were going to know what to say to what customer, and they were going to know the inventory that was a decade ago. And so now we all have, like BYOD, and I feel like this is the holy grail. And also, too, if we can start to, you know, Carol Tommy always said the best, right? Like, we're gonna move from like, tasking to selling. I think people who work in retail and the stores they work at, they love those stores. Yeah, that's why they're there. So if they can have more time to help the consumer find what they want and they love, I just, I mean, I will say, I'm starting to see early signs at the gap of right? Like you, I mean, I'm doing store tours, but like you walk in and and you're just being engaged with in a different way. They like. It makes you pause. And I'm like, this is, this is different, right? And I think that, once again, they're scratching the surface, right? They've got a new senior leadership team, a new kind of on the tech side and product side. I think they are. They just hired a Chief entertainment officer. That's so cool. Oh, wow,

Bret Schnitker  17:49

pretty cool. Yeah.

Emily Lane  17:52

Okay, store, DJs. How's technology

Bret Schnitker  17:55

helping to, you know, kind of enhance this employee challenge, labor challenge, I got to tell you, you know, I think I used to work in retail, that's where I started. My God, long hours, lots of work, lots of pressure, but it was a lot less complicated than today. I mean, today they're fulfilling orders, they're they're required to know more. They've got to do a tap dance, right? They got entertainment. There's all, there's all sorts of stuff. I mean, is there support out there for them or, yeah,

Deborah Weinswig  18:25

I mean, it's, it's interesting. I think that. So one of the things i, and this is like real time I came away with from NRF, was that we're starting to see, and the idea started to percolate at CS was we're starting to see certain tech companies becoming platforms, and it was most visible to me in the zebra booth. And I took all these photos because it was interesting. Zebra wasn't talking about zebra. Zebra was talking about all these other companies like sync, and you know, they had Salesforce and Lowe's, and you know, all these other companies who are leveraging the zebra platform to do more, and zebras made some really interesting acquisitions. So they introduced that. They acquired my old company, profit tech. Then they did fetch robotics, then they did reflexes, which is workforce management, and they just did ELO. And we've been waiting for electronic shelf labels to come to the US

Bret Schnitker  19:21

because Bret all over Asia for, I don't know how long ever forever.

Deborah Weinswig  19:25

And it goes back to you talk about how employees spend their time. I mean, they're still like tearing the little things to like in the new prices. And so, I mean, I was, I remember when targets, it was one of those things you just took a moment and just pause. They're like, wow, if we like perforate it, we save people to out, like the individual employee two hours. I'm like, wow, who have thought of perforating Right? Like, and they're doing this all day, every day, and with electronic shelf labels, you can now start to do also like dynamic pricing and. Tell media. I think it, I think it starts. I think it's the beginning of bringing the store to life, and going back to, if it's not like that zebra platform, and you've got, I mean, at the show, they had 20 different technology companies who they were showcasing, mind you, all the others who weren't even there that, like, I mean, I can, I felt excited, right? Like I was like, we're on the cusp, and I think that we start to see that in in 26 with some of these platform technology companies who I would never have thought of zebra as being that, but they've, they've done it. They've done it really well. Yeah.

Bret Schnitker  20:39

I mean, that is a testament to the new kind of marketing characteristics. You don't specifically talk about you, because people like, hey, we expect you to do that. We were at a we were at a convention for a Israeli printing company about a year ago, and it was this amazing convention because they talk so little about themselves. They brought in collaboration and how the impact is happening on a bigger scale, and help and aid in marketing. And I was just like, What a brilliant way to go about this, because people understand the impact, and so zebra understands that they can tell people about all these different kind of peripherals they're explaining the impact, and they don't really have to push their name as much. It's a lot more clear to the customer.

Deborah Weinswig  21:25

It's funny, and it was, and it's so funny because I literally, because we work with them. Obviously, since we're analysts, we're also working with analyst relations. And I said, it may sound simple to you, I said, but the fact that just of how you put your booth together, right, that you have, like, your partners. And then I said, you've made it so easy for us as analysts to understand the impact that you have. And they were, they were like, so and it goes back to their like, they're like, thank you so much, right? Like, we, and I was like, but I said, but do this next year too, right? Like, don't, don't be like, take this seriously. Because it's like, they just, it goes back to, like you said, and right, they work across healthcare and manufacturing and many other industries, but to be able to kind of see it and instantaneously understand it, right? Yeah, I was in the booth for an hour, and I walked away, and I really, I didn't have to do, I mean, of course, like you continue to read and stamp on things, but I understood it unequivocally, whereas others like I was like, Oh, I gotta, I gotta take notes, and I've got to, like, you know, grab if there's any flyers or whatever, so I can go back and do my homework. But there I was, like, I left, and I'm like, I get it. So I thought that was, that was a very bright star in my NRF experience.

Bret Schnitker  22:36

Yeah, a note for future marketing. That's the way to do it absolutely

Emily Lane  22:42

as we take a look at another angle of AI, you know, there are a lot of people out there that are just truly excited about the opportunity that it can bring to their business. There are other people that are absolutely terrified about it taking over the world. You know, we've seen some dynamic shifts in retail lately. Initially, there were some, you know, fear and implementation, you know, concern over cost, complexity, implementation, process, all of those things. And you know, we're, we're hearing more companies slowly come to the table to embrace this. What? What would you say to those that are on the worried side, you know, afraid that AI is going to replace their jobs.

Deborah Weinswig  23:27

Well, I think that if you look at, well, I think it's two fold. I think it's something, it's a question we have to take very seriously. I mean, I will say we at core site, implemented an editorial GPT to literally check for like, you know, commas and semicolons and stuff like that, and just making sure we we were using like, you know, because our team was global, that we were using, like, American English, and our entire editorial team was like, Oh, they don't need us. They don't want us. And that was not at all what we had communicated. So it's sometimes too, no matter how much you tell people you need them, you want them, right? It's, it is? Yeah. I mean, I've lived it, so I can talk from that, that perspective. I do think it's interesting. You know, T Mobile, I think has done an excellent job, also on the platform side. But if you think about this idea of, like, connectivity, which, I have to be honest. I don't think I realized, but they said it on stage, so I'm allowed to repeat it, Columbia, right? That outdoor kind of the outerwear company I have my Columbia with, like, you know, the big outdoor sports brand, exactly, great. They were saying that on Black Friday they had fiber cut and lost, right? Like connectivity to stores, and they said on Black Friday, stores are doing $10,000 an hour. So if you think about, if you don't have a backup, right, you don't, you can't connect to a satellite or anything like that, you're truly down. I mean, you're doing stuff, and if you don't have, like, mobile, POS. Is it? Well, depending on how that's connecting, right, you start to think about some of the challenges. And so when you look at it, what I found is, if we can look at it from a constructive perspective, right, where, where it helps, as opposed to where it hurts, I feel like employees start to think about, oh, okay, and you know, we can, you know, we can do retail media now, right? There's, there are other reasons why this is a huge opportunity, and I think so it was interesting. Being at CS Samsung talked about this idea of, like, liberation from housework. The average American does, like, 2.5 hours of housework a day, and the and so, like we saw, LG had, like, this shirt folding robot, which went so, so in the Demo, demo, unfortunately, in front of everybody, and there were, but you started to see, right, but they were all single purpose. And what you started to realize is that for a very long time, right, these aren't going to be all knowing robots, right? They're going to do one thing. They might fold your laundry, they might put your dishes in the dishwasher, they might, like, sweep your floor, but right, you're going to need to have, like, I was like, think about I'm like, I need a bigger apartment for all the robots, right? It's not just the robot vacuuming your floor or mopping your floor now. And so you start to think about that, and I'm like, it's just going to take a lot longer. And I also think when it comes to retail, the most important thing is, right, the customer, retailer brand relationship we're looking at, we're advising our clients to put even more people in the store to build.

Bret Schnitker  26:53

And so there is a backlash to being separated. Covid separated. Us all people want connection. We're human beings. And if you want real brand integrity and and you know, connect and and movement and loyalty and experience, it's people to people. I still think it's still people to people.

Deborah Weinswig  27:13

I agree 100% so I think that when it comes to retail and stores, I and then I think if we can get supply chain kind of ignited, I think we're going to see a I think we're going to go into a few year. I mean, as an investor, I'm thinking and looking at retail in a very different way. I mean, I think it's there's a lot of tailwinds,

Bret Schnitker  27:38

and the reality is that some jobs will be replaced by AI and technology, but that's happened for a long time, and it moderates to a new opportunity. There's new jobs out there created by the technology. So, I mean, I think a lot of that fear is a little unwarranted. Certain people might be impacted, but there's an evolution as it goes. My son just bought that robot, by the way, that clean your entire house, or he's on the list for the robot come to summer. Yeah, he's all over it. He's spending the outrageous fortune, and his hope is that he never has to do laundry or dishes ever again.

Deborah Weinswig  28:19

Think about all that time that you get back. I mean, it was interesting. A lot of people were saying, oh, there's going to be a lot more people going to the malls, right? There's going to be a lot more, right? Like some of some of freeing us up from some of these, you know, less than enjoyable activities, will then give us, hopefully, a little bit more leisure time, which, once again, I think, ends up being good for retail, agreed.

Bret Schnitker  28:42

You know, we you just brought up a little while ago this whole dynamic pricing and electric price tickets and and all that stuff that's going on. And you know, in a world that we still have about 30 to 40% sold on markdown, and then costs increasing with tariffs, then you also have labor, raw material and shipping costs going up. You know, how is AI helping to maximize this profitability, ensure cleaner inventories? You talked earlier about, Hey, how is, how is it that we're always out of stock? But the opposite side is, how is it that we always have way too much of stuff we don't want? I mean, there's, there's all these challenges, and if we don't get smarter about our retail environment and our retail inventory and our markdown strategies, that slim margin, 3% pre tax profit in brick and mortar is going to become slimmer. And really, that's not sustainable. Anything happening out there for that, or that you, that you think about.

Deborah Weinswig  29:44

I mean, I know you, you, you had the chance to speak to her too, which was Janice wing from alvanon. And, I mean, I spent an extra, I actually stayed in Hong Kong, an extra day to spend with her, because, and I've known Janice a long time, but right where their technology is going. Used to be, right, like, a mannequin company, yeah, right. That's, that's so, you know, you're like, Okay, I don't need to stay an extra day. But she had said something like, basically, she's like, you know, we've just seen some really interesting data, and we've done some really interesting case studies. And so she talked about, and the data is publicly available, that one of the Tsar brands, they end up figuring out right, why the because return rates are through the roof this year. It was like 49%

Bret Schnitker  30:28

a billion dollars or trillion dollars in

Deborah Weinswig  30:32

returns this year. Like the return, I think, I think that the return windows are still right, like it's till Jan 31 so we still haven't seen so I'm sure it'll be over. It could be the first year over 50% and so Janice was saying that even if you're a conscientious shopper, right, and you're trying to get the right fit and get the right color, that part of the problem is and it was funny, I've never heard anyone boil it down like this, because she's probably going to figure it out, is it? You know, she's like, have you shopped online? Of course, you have, right? Have you looked at the size guide? Of course, right? You're like measuring so you get your size, and you get the garment, and it doesn't fit at all. And so she said, the challenges, right, is that there's a different model for QA, and then there's a different fit model, so you literally have potentially, and I'm like, that first of all, that explains so much why nobody else has figured that out before. I don't know, but that was one of those things. I was like this. This is kind of, you know, a big aha moment, I think for many and right, like she's, she's just starting to kind of tell her story, you know, which I think she probably needs help telling it, because it's, it's one of those. You're just like, scratching your head, how could this possibly be?

Bret Schnitker  31:49

Yeah, agreed. Yeah, great. We just, I have a little bit of soapbox on that, and I talked to Janice about this too. I just feel like, you know, in the old days, this whole vanity sizing worked great, because we could walk in and try stuff on and feel great that, you know, I'm in a size 32 gene, you know, and I'm 275 pounds and six foot four, but I've lost weight, right? And I feel great as we go online. It works against us. And and fit is so subjective from brand to brand, and it is, there is no consistency. And I said companies like you and I've spoken to a couple other, you know, form fit scanning technology companies to the same thing it is, the industry is desperate for a North Star. We have more information on our fingertips from scanning humans around the world, data sets by demographic and customer and race, and we we have so much information yet it it in the end, it boils down to, well, here's what we suggest, and you have to work on that. It's like there needs to be someone to say, look, here's the body type for the particular demographic. You can mess with ease however you want. It can be comfortable, it can be tailored or whatever, but follow this body type. This isn't what you have, because if we don't figure this out, this still will remain a huge issue. And I know that we've got LIDAR technology and scanning things, and a good friend of yours is working on that whole process, but I feel like there needs to be some consistency. It was okay when we could go on and try stuff on, but when you're having it shipping and returning is insane today because of that very matter.

Deborah Weinswig  33:32

Yeah, I agree it's it's such a huge opportunity and huge feel like so many folks have tried, and they feel like they failed just because they didn't get the pickup that they wanted. But I think it was more it goes back to, I think it's really explaining what needs to be done and then and then trying to execute it. So I thought that was one of those really interesting kind of moments. And, you know, fit is just, it's, first of all, like you said, it is subjective, and it's, it's also even just organizations having less waste internally. So I think there's a huge opportunity there.

Emily Lane  34:13

Yeah, I think there's an opportunity from a consumer education standpoint there too. I mean, you know, I do believe that it's the the brand's responsibility to to do right by their fit and transparency, consistency, all those things, but boy, what an opportunity to educate the consumer that there's this amazing technology behind it.

Bret Schnitker  34:34

Let's talk about something I know that's kind of near and dear to your heart, at least lately, we've been involved in a few conversations with you about a on supply chain and sourcing. So you know, we've never experienced a time in US history that I'm aware of with this geopolitical turmoil. It's creating real complexities in sourcing and supply chain. You mentioned it at the top of the conversation. Tariffs being one of those things, the volatility, the unknown. Bret. Minute or hour that tariffs are up or down or left or right, and then we have over a billion small parcel packages that are coming into the US per year. I can see it. The last mile is congested. Delivery times and service are strained, and it's visible. I mean, even Amazon, where it's like, today from Amazon, yeah, and it was supposed to be delivered three days ago. We have overnight delivery, then it's like, oh, by the way, it's next Tuesday. You're seeing this challenge. I know you spent a lot of time thinking about this whole last mile and navigating some of this space. I know some of that's a big topic, but let's zero in a little bit on supply chain, because finding the right country at the whim of tariffs is difficult. So that's a bigger conversation that we can go to today, but the last mile conversation, tell me about what your thoughts are after you know you've kind of engaged in those conversations in 2025 Do you see progress? Do you see an ability? Do you see that we're going to hit a wall here real quickly?

Deborah Weinswig  36:08

I mean, I, I think there's always been the fear that you literally, like pull on a thread and supply chain, and it just all kind of, you know, the whole garment comes apart, which is very understandable, because a lot of this is legacy systems, right? Probably half of it's not even documented or more. And the really interesting aspect of CS was a lot of the chip companies talking about this as a huge area of opportunity for them, and I specifically had the opportunity to sit down with Intel more than once, because I'm it's like once, once they said it, I was like, I've gotta, I've gotta, I've gotta chase this and it. I'll tell you something that used to take, let's say it was three to five years. Did do even, like, basic supply chain overhaul. They're talking about being able to do it in half that time and at a much lower cost, without the risk. And it goes back to there's just a significant, like, greater amount of compute power at, you know, a fraction of the cost. And this ability to kind of see everything right is, and Intel is now doing software and hardware and so right, like they can literally do it. And 10, which was also kind of, for me, like a jaw dropper. And I just, I just think that there's number one. A lot of retailers think they're, doing a great but there's not they're not a rude awakening when we see someone who, and I think we will see somebody, I believe in the next six months, who's like, I'm in because the excitement we saw, we did this private tour at CS with Intel, and it was so funny, because someone's like, Oh, isn't it? Just a bunch of laptops. We really were, like, dragging people out because the next group had to go in, because it was so interesting. And I love it, like those. I mean, you guys know me, I love it when you find these stories that everyone thinks is one thing, but it's something else, yep, and I think, right, they've got a new CEO. They've had a lot of CEOs, so we shouldn't shy away from, like, the fact, but I think that the way that they're thinking now is focusing on a few industries, and what's like. I think they like to solve difficult problems. And supply chain is the most difficult, yeah, and so if you can get one, I mean, right, when I started this industry, right? It, you know, everybody was running on like, one, you know, one tech company and that that made it easy, because they're all like, Oh, this is who we work with for supply chain. And I think Intel can be that company. It's, it's just a matter of them kind of getting out there and saying, like, this is what we're going to focus on in retail, but they can do it in, like, retail and manufacturing and healthcare. I mean, there's a lot of industries that have a lot of challenges. I mean, think about it, in hospitality and kind of quick service supply chain, right? Like, if you were making a burger and you don't have the lettuce, that's a problem, right? I mean, it's just so I think we could have so much less waste. We can pay our employees better, right? Like, I think there's so many positives that can come out of this, and it's just it. I do think we'll see something the next six months. I mean, it's just, it's such a challenge, and I think it's such an opportunity to be able to to finally fix what's really, really broken.

Bret Schnitker  39:39

Agreed, you know, this last mile thing. It's so weird because it it crystallized in my mind years ago. I was in college. I was a waiter in a restaurant, a new waiter, you know, super inexperienced, and I would go out and I'd have my station, I'd run out, and I would take an order, and I'd run all the way to the back and get the drink and put the order and run out. To the second table. And I was always in quote the weeds, that was the term, you were always behind. And a really smart gal that had been a waitress for a long time said, Bret, you're doing this wrong. You're treating each table individually. You're running out, running back, you're spending a lot of time. You need to treat all your five tables as one. Table, you go to the first table, you take the order. The second table, you take the drink, or the third table, you drive. You drop the check third you know, next table, you do that. Every time you go out, you hit all the tables. And I was like, Oh my God. And the minute I did that, everything moves so much smoother. And that's kind of this analogy for this last mile supply chain. Everyone's doing things independently. You're seeing delivery trucks side by side in our neighborhood, delivering to the same address side by side. And I'm like, they're doing exactly what brand of delivery? Yeah, you know. So you've got increased expenses. You have all this inefficiency built into the last mile. And you know, when we met last year, you had a nice dinner with a last mile technology, kind of new company, and it was so interesting, and it got me excited, because I'm like, and we had last mile technology on the program last year too, and the idea that we could consolidate it, and that you could run rooting where everyone's going in this one direction. We're treating it, you know, as one table, if you will. Should help solve some of these issues. Do you see that people are ever going to get that organized and work between the lines, regardless of the organizations and, you know, happening in technology?

Deborah Weinswig  41:43

Yeah, that is happening. So I goes back to, it's funny. You bring this up because this was something I had not expected to hear in 26 but I would say probably a half a dozen companies have said to me that they're starting to work with DoorDash and that is and all all positive. Every single company had positive things to say. Then, right? Walmart, right with this whole idea of retail as a service, they're now doing last mile for a lot of companies, including, like Home Depot, who you think would be a competitor. And so I do think we're starting to see very like very much at the surface, because, once again, these are a lot of new conversations, but I do think companies are trying to figure out, how do you make this like a less variable cost? Yeah, and, and it's, I think that I really like the the waiter and tables example, because I think that really crystallizes the challenge.

Bret Schnitker  42:39

Yeah, it is. It's just it's so inefficient today, and if we can just streamline that. And so I guess we'll, when we have our conversation about 2026 with Deb, in 2027

Emily Lane  42:52

we'll check on the progress. Well, some of the themes from this conversation are, you know, talking about efficiency for employees and, you know, taking advantage of of the routes and so forth. You know, this really supports desires to be better on sustainability and better with, you know, carbon neutrality and some of those things you know, the world, many countries are very serious about addressing these concerns. The US, we might be on a temporary hiatus, but, you know, there are people that still care, but Europe has really taken a big stand digital passport conversation, exactly. That's exactly right. So are there some technologies that are really helping these companies as they're trying to, you know, embrace solutions that you know, really help navigate, and are you

Bret Schnitker  43:49

seeing that as even a conversation today in the US you know

Deborah Weinswig  43:52

much less? So I will say that where it because I think what happened, right is that, and I started to talk, you know, when I was at different board meetings, I'm like, you're spending all of these dollars to be more sustainable, but what you're spending is outweighing what you're saving. So like, the scale is off. I was just like, that's kind of not the whole idea behind this. And I think that, you know, there's a few topics, right? Ai, is one of them, cybersecurity, and I think sustainability is another, where you can get competitors in a room together to share how they're doing things. But I think it's like, you know, we had retailers who kind of were selling their previously loved merchandise on their website. We had them right, like they've thought about lighting and refrigeration and some other things, but ultimately, I mean, we haven't really. Had a retail on an earnings call who's been like, wow, we invest all this money in sustainability, and we got this kind of ROI, or this, that or the other. It's just not happened. And so it's, I mean, I'm

Bret Schnitker  45:15

all and that's the thing that I think slows it down, because it's an expense. And I think, in reality, what we should be talking about with technology and AI is that if we have AI, help us make better choices in inventory, we're not filling landfills. And your IOI is right there. You don't have a ton of markdowns in the end. You know, the efficiency and the understanding of inventory levels, the efficiency and understanding of supply chain. You know, last mile, if all of these things get implemented, you're burning less carbon credits, you're filling less landfills. You're focusing in on all of these different details. And I don't think they put the puzzle together yet to say, man, if we invest in some of these technologies, we're not making, to your point, kind of wild decisions, that you're not an inventory on some things, and you're way over inventoried filling landfills around the world with bad decisions. Then in the end, you do kind of put another nail or another benefit toward, you know, a sustainability initiative, right? Right?

Deborah Weinswig  46:20

Right? I think that's, that's the Holy Grail,

Bret Schnitker  46:25

yeah, I think reframing the conversation is helpful, because so many people think, ah, green costs green, right?

Deborah Weinswig  46:34

It's just, that's a good one. No, that's, that's a good one, I think. But I think you're exactly right. I think, I think originally, it was this huge opportunity, and then right then you'd have to bring in the consultant, and the consultant would do audit, and

Bret Schnitker  46:49

God forbid, get hit with greenwashing, because we didn't do something perfectly, right? And, yeah, yeah.

Deborah Weinswig  46:53

So I think it, it kind of is taking a bit of a detour, but I do think that this, it goes back to if we can pick supply chain right and we can get the right product to the right location and the right quantity, then it will kind of fix itself without it being for the purpose of sustainability, more for profitability.

Bret Schnitker  47:17

And I think that that's the way to frame it. Yeah, let's talk about omni channel profitability. We were in New York with you a couple weeks ago, and this is a big kind of conversation, this sheer complexity of omni channel, who's responsible for what task? The costs are always hotly debated. 85% ALL Business is STILL happening in brick and mortar, very low margins, and the balance is 15% online margins are higher if managed properly. Returns still, like we talked about, exceed a trillion annually. Where are we now with retailers, with respect to delegation and profitability or channel cost? Is there implementation strategies that you're suggesting to clients to look at, because I think people are realizing you've got to blend the channels today to really see the accurate picture.

Deborah Weinswig  48:11

I mean, this is what like. This is, I think could be one of the most interesting and fun areas. I mean, I look at live streaming as pulling it together, because then you're really thinking about selling, potentially, your store inventory, but through an E commerce channel, so things have to line up a little bit better. That's and so you're, you're taking it is quite simple, right? You are using a, I mean, you could use Zoom if you want to, for, for all I care, right? To sell merchandise, as long as people have a way to pay you, and you can, like, literally, pick, pack and ship. And so you can certainly sell store inventory, right? If somebody is in store, a lot of times you don't have the depth of what you need. We find that that's usually an E commerce sale, but oftentimes there's a physical component to it. And you know, the, I think it goes back to, there have been several retailers who've really kind of leaned into this, but I think they're they've also added a lot of cost, and to me, right? Going back to the stores, and, like you talked earlier about, which I thought was a really important topic around, like job security, right? I've always thought there was an opportunity to elevate store associates when you go to Europe, right, like it's a career. And absolutely right? And I think

Bret Schnitker  49:30

that if, certainly Japan, by the way, if you look at retail in Japan, that's a model people are starting to re look

Deborah Weinswig  49:35

at, yeah. And so I think goes back to, if we can start to train them, enable them to do live selling in the stores, whatever that looks like. I've seen several different models, and we use the store associates, because, going back to what I said earlier, they're there because they love the brand. They love like the clothes, and they know the brand better than any creator, for the most part, or influencer. And so I just think. That we could see this, this evolution or revolution where we see more live streaming. It brings the store life, going back to like that excitement in stores and physical we then have a way the retailers almost have to lean into blending online and offline in a way that they probably are right now. And I think it can take costs way down, because what we see is, when someone buys something alive, the return rates are 50% less because you're able to ask a real human being, like, Oh, does the bag have pockets on the outside? Is it a zipper pocket? Is it like a slip pocket? What's the drop on the bag? Right? Like, oh, and June, yeah, it's really, it's really, and even just colors, right? Like, it could be, you know, is that, like, a really bright blue, is it more of an indigo, right? Like, it's just, and I think there's something more satisfying about it, because you kind of know, when you make that purchase, you don't have to worry about. And even with fit, right, sometimes some of them will have, like, models in different sizes. And so it's like, okay, I'm, you know, can, can Sally come out and this dress in a size, whatever? So I think it's, everyone's got to experiment and figure out what's right for them. But I think that we're closer going back to the technology, especially going back to like, some of the T Mobile stuff, what they're doing to like, because you need the connectivity in the store for this to work. I think we're closer than we are farther away, which I I mean, it's a $798 billion in China, and we're like 35 billion in the US. These are big dollars.

Bret Schnitker  51:38

We've known we have two questions left, but I have to ask you this, because you are the smartest person in every room. It is my firm opinion, and as long as I have known you, gamification and live streaming like there should be pins on your chest, those are these are kind of mantras you've said and being the smartest person the room, and I don't think I'm alone when I when I share that. What the hell is going on that so few people in the West aren't right? Yeah, they're not embracing it. I You talk about it all the time, and people know how smart you are. So are we

Deborah Weinswig  52:19

don't happen? Yeah, we don't have the platform. So how I would suggest we do it in the US? Because we don't really have a platform like we did in China at the beginning with Taobao there. There's so many different platforms, and they're all and none of them is kind of perfect, right in retail, we like things to be perfect. So what I was never perfect, it never is. But I would strongly suggest, because I would like to see the retailers getting traffic on their website, is that they stream from their own property, either physically or digitally. And if you know as a consumer that there is content there, 24/7, and it can be and so this is the difference in the United States, you can play old content, right? You can play previously live events. That's the big difference, also between China and the US right now, most brands that we work with in China are live stream between eight and 10 hours a day. So, and in the US, it's, I would say it's, on average, about, if we look across it's still probably closer to an hour, if that, just because we do work with some that are doing quite a bit, but I think that the, you know, it goes back to, I think you kind of have, it's okay. Slash, you should use your store associates. It's okay. You slash, you should use your own property, right? So now you just take out a huge amount of cost and complexity, but they're also the right things to do.

Bret Schnitker  53:43

And so how do they not see this? There's home shopping club and QVC that, in essence, does that all the time, broken down by scientific metrics to the word that is being said constantly being streamed, and they do unbelievable amounts of dollars. How is no one connecting that to a more broad based live streaming concept.

Deborah Weinswig  54:02

Oh my gosh, you like Bret. This is, this is why I love you guys, because I have, I mean, hey, I understand that my

Bret Schnitker  54:11

mother, it's like our face. It's been in our face forever.

Deborah Weinswig  54:15

Yeah, I understand that QVC is where my mother and my grandmother probably shop. It doesn't matter, I would happily shop there. And so I think that they have a bit of a, I mean, I'm, I think they have, like, a complex about that. And I'm like, It's great you guys have phenomenal technology. Probably some of the unbelievable going back to platforms, why can't everybody instead, right? Like, if you're whatnot, or if you're by with like, why can't they all then be on so I think, like, you call it like queue or something. And I just, I think that there's huge opportunity there on the gamification side, we're still really early. I mean, I was running around malls at.

Bret Schnitker  55:00

Everyone's playing games, right? I mean, yeah, there has to be some way

Deborah Weinswig  55:03

to well. And it's funny, I have here somewhere in my hotel room. I've even got, like, the new meta Ray Bans and whatnot. And so I think that through, like, ar, right? You could, you could bring the stores to life. I don't think we're going there anytime soon, but you can do that, right? Like, I mean, going back to, like I said, 2015 I'm in malls in Shanghai, like catching red packets that had real value. And you know what, five more hours, a lot more money in the mall as a result. It works, right? The data shows that it works. I just, I think that in retail, also, if you're private versus your public, I think it's a lot easier because, and I love what gap is doing, and American Eagle, where I think they're both investing a lot in trying new things, and

Bret Schnitker  55:50

need to, gap should be America's company. So hopefully Zach's going to figure something out there. I mean, I'm seeing some freshness, so

Deborah Weinswig  55:58

yeah, and I think that the you have seen a lot of companies right, like acquired by ABG and whp and some of the other brand aggregators. And so I think if you're out of the public eye, you can, you can test and try more. So I'm hopeful, and if and if investors see the value, which I think that they're starting to get there. I just, I think we're opening the door for a lot more experimentation, enjoyment, fun, and I think that we'll start to see I don't think, I think we're gonna scratch the surface in 26 I don't think we're gonna go kind of like all in but I think it's going to definitely be more than what we've seen in the past. And that's exciting.

Bret Schnitker  56:47

Infrastructure is there? We for experential retail. We don't need another movie theater, you know, team up with an existing game developer and gamify retail, right?

Emily Lane  57:00

That would be fun. Deborah, you mentioned a little bit ago you were talking about, you know, influencers and so forth, and the alignment with the brand. So that's you're now starting to kind of talk about marketing, which is an area that is near and dear to my heart. Marketing is seeing a big shift. You know, it is, it's expensive. There's a desire for more and more and more content creation. Yet, like all of these platforms, online and socially, are just inundated with it. What are some new solutions that are coming to table to again, kind of add freshness in the damn north? Yeah, to marketing challenges.

Deborah Weinswig  57:42

You know, we're seeing a lot of retail media, and it's, it's still early, you know, I was in a Tractor Supply Store, and it's in very few stores, and they had these screens. And I'm not somebody who watches it on TV. So also I'm just like, I'm like, I was literally just staring because it was so beautiful. And I'm like, I know the product. I know where to find it. I'm being educated on it, so I feel smarter. And it's like, purely enjoyable to be in here, because it's just, I mean, it really was beautiful. I have to be honest,

Emily Lane  58:23

I remember what you're talking about. It's almost documentarian style, yeah, yeah, yeah.

Deborah Weinswig  58:28

I think that the great thing about retail media is, there's it's incredibly lucrative for retailers, and it then allows them to invest in other things. It's just a matter of, you know, there's been a lot of hits and misses, and so, you know, there's companies like swiftly, which I think has just done some really interesting things in terms of how they like rebate, and they have tons of data on how they rebate the customer, how the customer, you know, kind of acts. One of the things they've said, it was really interesting, like, I always learned a lot from Shawn tears, one of the founders, is that there's a lot of we will once again, spare the guilty these building companies who've built retail media platforms that are incredibly expensive And as a result, right? And that's at a point in time, so 12 months later, 24 months later, those aren't really relevant. And so I think that while retail media is a huge opportunity, I think that it's not necessarily been realized as much as it will be. And so to me, not only is it good, from an advertising perspective, bringing the store to life, and I'm talking like off platform, like in a physical store. And then going back to Bret, a question you asked earlier about, how do you kind of bring online and offline together? I do think retail media is that piece, but we. You're it goes back to, I think a few, well, I think more than a few retailers invested a lot of money, and probably something that seemed like a great idea at the time, but now you've got companies like swiftly that can do it fast and cheap. And I'm a very frugal person in my personal life and professional life. I'm like, I like fast and cheap all day long, and good, right? Like, if you got the data. And so I, I think that there's, there's an like and some of these companies, right? They, they always expect the data to talk to them for themselves, like they got to get out there and and be louder, right? Because it's really interesting. And so I, I'm hoping we're going to see more of that in 26

Bret Schnitker  1:00:40

that's great. Finally, the big question we're at the end. Now, had another masterclass with Deb hoyden Sweet, and we always appreciate the time. My God, I know how busy you are. What actually works versus hype? You know, brands and retailers are concerned about the cost, not clear on the real results. Vaporware is everywhere. What AI delivers ROI today in this space? What are you recommending? Because there's just so much out there. And we talked about the paralysis of retailers and brands today because there's a lot of offerings, but they're like man implementation and costs are expensive, and at the end, it's a big dud, then, oh my god, we just we'd rather not tread in that space. What do you recommend?

Deborah Weinswig  1:01:32

It's it's interesting, because I think that there's a lot that's really expensive and takes a lot of time to implement. So those are kind of two of the things that I think are expensive and takes a lot of time. Are not not positive.

Bret Schnitker  1:01:55

I think I would be out of business if somebody said, Hey, tell me about your product. Well, it's expensive, it takes a lot of time.

Deborah Weinswig  1:02:02

And so I think that that is some of the those are some of the challenges that we're seeing across the board. And so if I were to do one thing, I'd probably do it make sure that it worked in kind of like physical retail, because that's where, as you said, at the very onset, Bret, we're still seeing most of the traffic. And so I think that that is kind of, like, really, really important. I think anything we can do right, like, I love the electronic shelf labels. Yes, it's an investment, but it's not a huge one, and it's kind of once and done. I think retail media in stores, and then I think live streaming. I mean, I think this idea of bringing the store life. I mean, I wish I could push the gamification button and it would work. I mean, we

Bret Schnitker  1:02:48

saw, let's just get live stream going. Let's get half of your vision for the world.

Deborah Weinswig  1:02:54

That's exactly right. So I so I think that the if I look at it, we had a lot of noise, and 25 25 I think retail survived for the most part. We now have a lot of these big chip companies who are really focused on retail because it's, you know, the second largest industry after healthcare. And you know, that excites me and gives me like clarity of vision, and then I think that we've got a lot of, I think, almost permission for whether it's CIO, CTO, CDO, to go out and experiment, but to be mindful that we either want to use AI to pay for AI, or you can Look at retail as a service, data monetization, retail media, but this idea that we're not going to go kind of like spend with abandon, we're going to be disciplined from an OPEX and CAPEX perspective, and so that I haven't seen that all that kind of coming together ever. And I think that just doing a few things really well will give investors kind of pause to push valuations higher, which will then ultimately allow the retailers to invest more. So I think we're at the beginning. I think we're the beginning of a supply chain cycle. That's really what I think. And I think goes back to even when we talk about, right, like Bret, this whole idea of online and offline and bringing that together, that's all part of that. And so I think we're, we're in the early days, but the tech is there, and it's affordable, and that really lays out a great story for retail for 26

Bret Schnitker  1:04:38

that's great. And I don't, I shouldn't have to say this, but as you're thinking about all of these inflammation steps in 30 years, maybe 30 plus years of time, I've been in this business, I have never met anyone like Deb. I think that being involved with Coresight research and Deb and making those decisions. Is going to save you a lot of pain. I remember the times we made mistakes when I was at a $3 billion retailer. I remember the times that we made mistakes in terms of manufacture and working on supply chain and all the craziness that happens. Having someone that is as smart and as informed and can time travel, I'm still convinced she can time travel is super important, because it's going to save you lots of cost and time she she thinks through this stuff really, really intensely. So yeah, thank you so much.

Deborah Weinswig  1:05:33

Thanks so much. I love getting to know you guys. You always think ahead of the market and that's incredibly valuable, because I think having the two of you push the rest of us, it just makes industry work better. And so I think it's, it's a true partnership in terms of working together to help the industry. And I think that 26 is going to be a really important year

Emily Lane  1:06:04

for that absolutely well. Thank you so much. That's exactly why we're here. You know, like make helping to share ideas and forward progress in the industry. So thank you, Deborah, for joining us. Thank you for joining us today. Do not forget to subscribe to stay apprised of upcoming conversations you.

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