NRF 2025 Conference Recap
A synopsis of some of the most intriguing points from some of the most important people in retail.
The National Retail Federation’s annual conference was held in New York this week. Over the last several days, “Retail’s Big Show” brought together some of the biggest CXOs across the industry, including Brian Cornell (CEO of Target), Mary Dillon (CEO of Foot Locker), Artemis Patrick (CEO of Sephora North America), and even Tommy Hilfiger himself. While we heard plenty of discussions across all of retail’s subsets, there were several important insights that fashion brands should think about for their short and long term strategy, and consumers of said brands should be aware of. There were so many engaging conversations but here are my top 7 most interesting takeaways, in no particular order:
Consumers spent $1.2T in global online sales over the 2024 holiday season. Christmas and other gift giving holidays contributed to the highest transaction rate in history for this time period. Even though inflation is slightly eroding the average shopper’s buying power, people are still spending money. Brands that continue to have a strong digital presence and motions across their entire marketing funnel will continue to win. This is also a key change in behavior because consumers are starting to lean less on in-person pickup and have a slight preference to delivery.
Ozempic and other GLP-1 drugs will change the size of the average American. Yes, you read that correctly. Ozempic is no longer just the popular weight loss drug of choice among celebrities. Its adoption throughout the country is increasing at an alarming pace. So much so that Prashant Agarwal, professor at Columbia University and CEO of Impact Analytics, anticipates that up to 10% of American adults may be taking one of the many products in this category within the next five years. This will have an immediate impact to clothing brands considering they’ll need to adapt their future inventory for certain sizes. This trickle down effect is already taking place as Prashant mentioned he’s spoken to several large secondhand/resale stores that are already seeing an influx of donations of larger sized items.
Consumers should expect to see price increases this year. The incoming U.S. President has yet to back down on his stance on tariffs. Late last year Walmart’s CFO called out the effect it will have on the business, and if a household name as large as Walmart can’t avoid it, fashion companies with significantly lower top line revenue and less negotiating power for raw materials should expect no different. This isn’t necessarily a novel insight moreso than other company executives verbally agreeing with this sentiment.
Brands should (and rightfully so) continue to invest heavily in social commerce. TikTok might be sunsetting in the U.S. but retailers are putting more and more dollars in social commerce including Instagram and Youtube Shopping. Remember, TikTok is still a global company and we don’t make up its entire user base. The savviest brands will learn how to deepen their relationships with influencers as an intermediary and do a great job weaving partnerships into their brand narrative. Consumers should be prepared to see a combination of really smart and natural campaigns, and plenty of additional annoying, non-relevant ads due to retargeting and other digital marketing tactics baked into the user experience across all of social media.
AI is already showing positive ROI for brands. We knew it was more than a fad, but as a former B2B marketer, I didn’t expect to see this big of a change in shopping habits this quickly. “One out of every five dollars spent during the 2024 holiday season was influenced by AI-powered product recommendations, personalized and targeted offers, as well as agentic conversations,” said Kayla Schwartz, Director of Consumer Insights & Strategy at Salesforce.
Mobile shopping will represent a powerful way to gain revenue for the foreseeable future. A whopping 69% of all online orders last Christmas came from a mobile device. I anticipate that as more and more hype builds around capsule releases, limited availability for collabs, etc., it will be crucial that consumers have a frictionless experience when ordering products on their cell phones. This can come via a website or a custom app experience. However, if it is the latter, I would highly recommend that companies put their best foot forward. Releasing a clunky app that doesn’t work has the potential to create a detrimental hit to your reputation.
Physical stores are still a strategic asset for brands. DTC is definitely more cost effective, and even though we’ve seen big box shopping malls close down over the years, companies are still seeing foot traffic in their brick and mortar stores. Digitally native brands who create a physical presence are seeing shoppers display different shopping habits. Many customers come into the store knowing what they want and expecting to see certain products and purchase them on the spot. While companies with a large number of SKUs may not have their entire catalog in stock, they should anticipate having a customer journey that can cater to this need and allow for a slightly different ordering experience while in the store. This is a very differentiated strategy than going the wholesale route and negotiating shelf/clothing rack space inside of a store like Nordstrom, but once you enter a growth stage of your business, you must be able to adapt.
What overall trends are you starting to notice within the fashion industry? Anything that could create a massive shift in spending habits?