EP323 - 2025 Predictions and NRF Big Show 2025 Recap

The Jason & Scot Show - E-Commerce And Retail News

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The expended edition of this podcast is 80 minutes long. We're sorry, if we had more time, we'd make a shorter podcast.

0:00 - 27:30 NRF Big Show Recap
27:30 - 59:00 Recap of 2024 Predictions
59:00 - 80:00 2025 Predictions

Watch a complete recap of NRF Big Show 2025 here 2024 Predictions Recap

Jason:

Retail Media Networks go In-store. At least 1 top 20 retailer launches a digital in-store ad network YES
AI is even hotter at end of 2024 than now. Most text boxes in E-Com are GenAI powered. A least one retailer has an AI based auto-replenishment solution with significant adoption. YES
Bifurcation drives at least two more retail bankruptcies, including 1 national specialty retailer, and one general merchandise/dept store. (two top 50 retailers) YES
China companies focus more on West and get more traction. Shein successful IPO. Temu US gets to at least 75% of target US E-Com. No
Grocery E-Commerce goes from $95B to $125B in 2024 (after being down in 2023 per Bricks meets clicks). No

Jason Score: 3.0

Scot:

Amazon relaunches Alexa on a native LLM No
Temu falters as people realize it’s wish 2.0 No
RMN is currently $52b, growing 20% y/y, accelerates in 24 to 30% and $67b (coresight has the 52 datapoint) No
Instacart who’s stock IPO’d at $33 and now is $23, solves ads and pops to 40 YES
While everyone thinks Shein/Temu takes share from Amazon, they end up hurting Nordstrom, Macys and Target instead - materially (10%+) focus on apparel, maybe take target out? Yes

Scot Score: 2.0

In a rare upset victory, Jason takes the 2024 predictions crown! But can he keep it?

2025 Predictions

Jason:

Shein & Temu are NOT impacted by changes to De Minimus (which either don’t happen or are ineffective). They ay be impacted by Tik Top Shops and/or Trade War tarrifs but not by changes to De Minimus.
Tik Tok is not permanently banned in US (prediction made before scheduled ban was to take place). Tik Tok Shops is fastest growing $1B+ retailer in 2025.
A major auto manufacturer launches a DTC offering in the US in 2025 (other than Tesla).
Retail Media Networks undergo consolidation in 2025 as smaller retailers realize they can't go it alone.
Live-streaming/VR/Voice Commerce are all materially insignificant in 2025. No financial evidence that consumers care about green or purpose driven brand with their wallets.

Bonus: - AI Agents hottest trend in commerce (but I don’t know how to measure it)

Scot:

Facebook acquires eBay puts them out of their misery finally
Temu loses its newness/out of the honeymoon period and people realize it’s a gimmick - down 20% in 25 vs. 24, even more with tariffs
AI agents become a double edge sword for retailers (headless/composable) vs. no ux, I predict 10 large retailers block them, but the rest embrace
Marketplaces have a new leg of expansion into a variety of places even an LLM - let’s call it 5 new larger retailers
Personalization is out, memory is in, but still silo’d -

Bonus: AI automates and optimizes the supply chain in ways we humans can’t, or at least analyzes the data in such a way -OR could be quantum computing.

Don't forget to like our facebook page, and if you enjoyed this episode please write us a review on itunes.

Episode 323 of the Jason & Scot show was recorded on Thursday, January 23rd, 2025.

Transcropt

Jason: [0:23] Welcome to the Json and Scott show this is episode 323 being recorded on Thursday January 23rd that's a lot of 2 threes I'm your host Jason retail gee Goldberg and as usual I'm here with your co-host Scot Wingo.

Scot: [0:37] Hey Jason and welcome back Jason Scott show listeners for episode 323 being recorded on 123, Jason you are in the post honeymoon phase of the NRF Big Show 1 of my and I'll have to be honest with listeners kind of not favorite shows because it's in New York during January and I'm allergic to cold weather and I always have a hard time getting there and out because of the snow and then also it's a show that's over weekend so it kind of crushes the whole work life balance thing so hope you had a fun 1 I was not I did not attend this year.

Jason: [1:14] Very often it's over a holiday weekend it's like.

Scot: [1:17] And yeah so in the holiday weekend as well for for fun yeah.

Jason: [1:20] Yeah yeah I think for as long as I can remember we've been going to that show and complaining about it and the the the usual answer is of course due to its 114 year old show we're not changing it because you're whining um, which fair enough, I will point out good news for you Scott global warming it doesn't snow in New York anymore so it hasn't it was cold but like there there used to be an annual blizzard and they literally haven't had any snow in like the last 3 years which is a little spooky, um and I have great news for you if if you thought it was a lot to go to 1 in RF a year guess what we get this year.

Scot: [1:57] 2 nrf's.

Jason: [1:58] 3 NRF or depending on how you count 4 NS.

Scot: [2:02] Whoa are they going to call them Big Show small show Medium show.

Jason: [2:05] No so for a while they've had so they have a few other shows so they have the NRF Big Show which is what we're talking about in in New York in January 114 years old 40,000 people at 10 mostly Brazilians, they've had what I'll call the small show which is technically now called NRF Nexus it's had some other names in the past that's in Southern California in the summer and I really like that show I'll be I'll be at that show, I'll I'll be doing a number of gigs there and I encourage people to go there because it's a way better boondoggle we all hang out and eat good food on the beach and, in his way less stressful than than in our Big Show.

Scot: [2:41] I can sign up for that yeah that's uh no blizzards sign me up.

Jason: [2:45] Trono in Rancho Palo Verdes it's a good it's a good spot it's where Rico started.

Scot: [2:48] Oohnice.

Jason: [2:50] Um they have like a loss prevention show which is probably not relevant to mow most of our listeners but the big news is they are the Big Show has gone International so last year they had Big Show Asia for the first time in Singapore I was not there but it was by all accounts a big success and so, this year we'll have year 2 of Big Show Singapore, and then they're now expanding to Europe so this September will have NRF Big Show Paris. So Scott if you want to go well you know my my corporate headquarters is there my boss is there so we'll we'll host everyone in his office on the shampoo Jose.

Scot: [3:29] I would love that I have a lot to chat with your boss about I feel that you're being shorted on your title and it's been too long we need to expand your title so that's going to be my number 1 you know point on the agenda.

Jason: [3:41] Yes it is high on my list to get you in front of our tours to renegotiate my package.

Scot: [3:47] Yeah I'm there I will I will Ari Gold this thing and we will get.

Jason: [3:50] Yeah I know he our tour listens to every episode so be ready our tour he's coming Scott's coming for you.

Scot: [3:55] Yep I got your I got your number first of all I'm going to loosen him up with some wine and cheese French people like that right and some croissants boom.

Jason: [4:03] Yeah but I kind of don't think you can loosen a French person up with 1.

Scot: [4:07] True it may be a bad strategy.

Jason: [4:09] Yeahfun strategy but it just may not work out the way you hope.

Scot: [4:14] Well how is the show I saw that you were you know doing some really good instagramable pictures out in front of some signs and looking spelt and you had your cool eyewear rocking did you how did how are all the balls and Galas and the and you did a bunch of content give us a give us a rundown what we're give us the behind the scenes.

Jason: [4:35] Well so the number 1 takeaway from internet Big Show is that retail geek is Overexposed so I apparently they couldn't get any good speakers this year because you haven't been going so I was on stage 4 times which is more Jason than anyone should want.

Scot: [4:51] There can be an honorary Kardashian if you keep that.

Jason: [4:54] Yeah yeah I I'm not sure that's that'll be 1 more item off my bucket list honorary Kardashianthe, so I mean the show went well it continues to grow it felt super vibrantit was very it was cold but clear.

Jason: [5:13] The the kind you know you and I have been to so many of these shows that I feel like, somewhat predictable at this point for those that haven't been a big show it's a heavy networking show there's a lot of private events that maybe aren't even published and are invite only and, it's 1 of the the the few, events where I get all those invites so you're right like you know I I went to a lot of dinners and a lot of Galas and saw a lot of, mutual friends that are of course ask about you and are bitter that I'm there and you're not um but it's a lot of fun to catch up with people and certainly you know I got to a chance to talk Shop with a lot of people which is 1 of the big benefits to me, you know there are some interesting on-stage content I'm not going to do a super deep recap on the podcast because, in in NF Big Show recap would be an hour and the good news is I recorded an hour webinar yesterday so in the show notes I'll put that on and if you want if you want an hour of a big show recap, you you can get it there but like at a super high level kind of 3 3 big takeaways that that we highlighted in the recap from Big Show the, continuing to be 1 of the big topics that all these retail shows that they're all heavily leaning into I have some controversial mixed feelings about our.

Jason: [6:32] Exuberant over retail media Networks, so every every retail on the planet is launching 1 every V you know there's a thousand vendors that somehow raise money selling like some service for retail media networks all the the retailers now come to these shows and have booths so there's Giant, Amazon Walmart booths at these these shows trying to sell people ads they've they've kind of turned into media shows, and so NF has a whole extra day of the show if it wasn't fun enough to go over the weekend you can now attend retail media day which is all day Saturday the day before the show starts on Sunday, so a lot of talk about retail media networks a lot of vendors a lot of content on the stages. 1 of my biggest session I did a a session on the featured stage and it was a new format for them it was a debate.

Jason: [7:24] And so they had a much smarter sort of a retail thought leader Christina Russo and I on stage together and they they pulled all of, the the popular retail Talking Heads and ask them to surprise us with questions and then we debated the answers and so longtime friend of the show tsukareta had a question like hey Jason aren't all these retail media networks a scam, and, I I kind of felt like I think she thought she was that was a gotcha question for me because she I think she thought like working for a agency that you know is generally super excited about all media formats and has, you know hundreds of people at the moment working on retail media networks I think she thought that would be a controversial question, I basically answered like it's absolutely a scam and the vast majority of all these are going to fail, so I think that probably surprised Christine a little bit that she had to take the the pro retail media position after I after I jumped in on the con position. But, there is a lot of talk about retail media networks it's going to show up in our predictions I'm sure there are people making a lot of money on retail media networks but they also they're not going to be as ubiquitous they're not going to translate to the small retailers as well as everyone thinks and, as you and I know the dirty secret is like all the retail media money is in third-party marketplaces it's all those third-party.

Scot: [8:46] Yayanother win for third-party marketplaces.

Jason: [8:50] Yeah it's almost like you saw all this stuff coming like 20 years ago.

Scot: [8:54] Yeah yeah they uh.

Jason: [8:57] Until you get a good new idea I'm going to keep giving you props for the old 1.

Scot: [9:00] Okay I appreciate ityou can do my negotiating with my boss.

Jason: [9:02] Yeah uh soyeah I'm not doing that because I've met herum.

Scot: [9:09] Yeah she's tough.

Jason: [9:11] Yeah but fair tough but fair. So 1 big Trend retail media networks love them or hate them there's a lot of discussion about them a lot of a lot of activity in that space the most predictable big trend is of course AI so, half the Boost of the show you if you if you didn't read carefully you would actually think it was an Nvidia Booth they had like, bigger logos than half the exhibitors they they did a keynote with John furner John's the CEO of Walmart us and and the the head of retail at Nvidia was on stage with him talking about all these, these interesting retail use cases in 30 seconds or less the Takeaway on AI is, there's a ton of successful AI efficiency stories where retailers and brands are doing something in Commerce they've always been doing but AI allows them to do it way better faster and cheaper than before and so there's, there's increasingly you know tons of money being saved by using AI for efficiencies.

Jason: [10:13] And that that there's some pretty interesting ones and some pretty clever ones and a lot of smart vendors, at the show coming up with that stuff but the the big prediction the coming very soon part of AI That's more game-changing that's sort of a new shopping experience that didn't exist before, is agent-based Commerce it's what so-called agentic AI so if you went to Salesforce Microsoft Google, sap, Amazon's Booth like the the biggest words in the booth were agentic Ai and the the you know all all these big vendors are in a knife fight if I know you follow the, the kind of core AI space, you know openai launched their agent this week which is uh operator which is super interesting and exciting perplexity launched their agent of course you know Salesforce and Microsoft have, uh and Google all have big big plays and agents and so, I'm I'm relatively bullish on on agents disrupting Commerce and fundamentally changing some shopping experiences and breaking search for example I'm making search a lot less important and a lot less relevant.

Jason: [11:25] I think all that could happen I think it's really risky to think about the time Horizon for that and at the moment if you're familiar with the gardener hype cycle, agents are kind of still C climbing up the the hype Peak like they have not fallen into the trough of disillusionment yet.

Scot: [11:45] Yeah we're going to talk about agents in the predictions so.

Jason: [11:48] Hello I should have I should have known I should have held some of my.

Scot: [11:50] Uh passion a lot of them are kind of like glass-based which I think's interesting but you and I know you can't have a great shopping experience just you know kind of looking like you're a browserso if you say you know hey.

Jason: [12:02] Yeah I think that's a fast early wave to proof of concept A lot of this stuff but that's that can't be how it all works in the long run.

Scot: [12:09] Yeah I'm excited you know I've had a fair amount of exposure to the perplexity and it it's okay on a surface level but it falls apart on some basics in our world and then I think I think the glass-based nature of Operator by glass I mean it has to scrape it's it's not.

Jason: [12:22] It it acts like a human clicking buttons on a browser.

Scot: [12:25] Yeah yeah so we'll see ya.

Jason: [12:28] Microservices and apis.

Jason: [12:30] The so that that was a super interesting 1 and then the third big topic from NRF Big Show was just kind of the state of the industry NRF released, their final data for annual sales the US Department of Commerce came out with their data the day after the show, and you know everybody in the hallways talking about like hey how'd you do did you do well did you not do well what's your budget look like for this year or are you spending more than last year less than last year what's your forecast like and so there and what the heck do you think is going to happen in the new Administration and how is that going to affect all of your business plans right and so there's a lot of, those kind of conversations and and again go listen to the the the interf recap for the Deep dive but the the super high level is, it's it's kind of mixed mixed news in 2024 we sold 7.4 trillion dollars worth of stuff which is a ton of stuff, but the NRF doesn't like to talk about that retail number they like to talk about core retail which is, all of retail sales less automobiles gas and restaurants so 2024 we sold 5.3 trillion dollars worth of stuff core retail stuff, that is up 3.6% from the previous yearso the question you might ask is hey Jason is 3.6% good, and the answer is it's okay NRF predicted that this year we would grow between 2 and a half and 3 and a half percent so 3.6 is above the top end of, prediction yeah.

Scot: [13:58] A small butt I said we they crushed their number.

Jason: [14:01] Uh so they beat interest prediction the 10-year average growth which you know growth is slowing down a little bit but the 10 year average growth is 4.1% so 3.6 is less than 4.1, last year's number was 3.9 so 3.6 is less than than 3.9 but so all these numbers are kind of in the range it's a huge number so you know a tenth of a percent is is Meaningful.

Jason: [14:25] But the real butt is half of all that growth half of that 3.6% growth Amazon Walmart T-Mobile and Tik Tok shops, so you pull those those 5 retailers out and is a way below average year for the rest of retail, and add on top of that that, consumers were hugely value seeking in 2024 they were trading down a less expensive Goods so we sold more or less expensive stuff which is a lower margin the discount rate was uncharacteristically high so we sold stuff at deeper discounts and so you know all these retailers that are not 1 of those top 5 Growers.

Jason: [15:04] Had a mediocre sales year and an even worse profitability year and so you know in the hallways the talk was oh the overall industry maybe did okay we didn't do so well and our Focus next year is, economic fundamentals like austerity we're we're trying to save money wherever we can we're not doing big grandiose plans bunch of retailers are likely closing stores and we've already seen that play out in the week since nrfa Macy's has announced, another huge wave of of store closuresit's it's going to be a challenging year in retail and I'm not sure the, the vendors have fully felt it yet but like when I hear all these retailers talking about how they're cutting back on all their plans and then I go look at the 450 vendors that are all hoping to sell new it technology to all these retailers, I'm like it's going to be a lean year for all those vendors that are trying to sell new new search engines and new platforms and and new new products and services to all these retailers in 2025.

Scot: [16:07] Yep it's busy out there did the Department of Commerce their their this is where you get the other and then the really good 1 for e-commerce comes out much later has have theywhat what did they say about e-commerce does that come out.

Jason: [16:20] Yeah so so you are correct we get at the moment we havenon-store sales is what it's called um and it, it grew about 10% year-over-year, um so what that likely means is that e-commerce will end up growing at about 7 and a half to 8% is my prediction right nowso so retail grow brick and mortar total retail, grows at 3.6% e-commerce grows at twice that at 7 and a half to 8% so e-commerce is still the fastest growing part it's 1 out of 5 of core retail now right it's over 20% of core retail sales so the law of large numbers is starting to kick in when you and I started doing this retail was still growing at 4% but e-commerce was growing at 20% right over the last 10 years e-commerce has grown at 15% and now we're starting to see it tick down, 7 and a half percent and I I think that's a natural progression as as e-commerce has gotten more mature.

Scot: [17:21] Yeah it does still feel slow like if you'd asked me 20 years ago where it would be in 2005 I would have said oh it will be at 30 or 40%, 20 20% just feels low and it's historically low compared to not historically but it's low compared to like most other countries right so the UK is much higher and.

Jason: [17:41] It depends on what you mean by the most uh there are countries way higher so so there are countries in Europe.

Scot: [17:46] Yeah not in.

Jason: [17:47] Europe is a mixed bag but like UK is higher Asia is much higher it's very hard to count in Asia there's not good data so you you will hear a lot of people say that e-commerce is over 50% in Asia and it might be there are other people that are say that will say it's more like 40% you there's there's a bunch of countries in that kind of 30-ish percent so, you know certainly there's no endemic reason in the United States can't hit those same same kind ofPeakswhat I would say is, not every industry got affected by e-commerce at the same time like like you know I you like to joke about how I started my career at Blockbuster they were they were affected by e-commerce a long time ago right um borders was affected a long time ago Toys R Us pretty long ago Circuit City all those companies you know were affected at a different rate, but there were always new categories that were you know just had this massive adoption of e-commerce that you know kept Goose the number and there are fewer and fewer categories with really small e-commerce today right so it's mostly cars and Grocery and again we're like rightly or wrongly most of us are pulling cars out of the numbers we talked about so, so yeah you know they're just our fewer kind of untapped markets to to to grow.

Scot: [19:07] Gotcha should we any other uhwhat was like the back room conversations like give us no specifics of course but like what else was so retail media networks a lot of an AI anything else that that is like aon people's minds.