This episode of Retaili$tic offers insights from three major conferences attended by Coresight Research in May 2025. Max Kahn, President of Coresight Research, discusses the AAFA Global Supply Chain Conference and the ICSC Trade Conference, focusing on the impact of tariffs on supply chains and strategies for diversification and compliance. Stephen Winnick, VP of Innovator Services at Coresight Research, shares key takeaways from World Retail Congress, highlighting the evolving landscape of retail, the importance of sustainability, and the integration of AI (artificial intelligence) in enhancing customer experiences. The conversation emphasizes the need for agility, collaboration and innovation in the retail sector.
Takeaways
Chapters
00:00 Navigating Tariffs and Supply Chain Strategies
06:08 Insights from World Retail Congress
11:57 AI Innovations in Real Estate
18:09 Enhancing Customer Experiences in Retail
Welcome to Retaili$tic, the official podcast of Coresight Research for May 27th, 2025. This week we have an extraordinary show with two guests sharing their thoughts about the big learnings from three different conferences Coresight Research attended in May.
Max Kahn, the president of Coresight Research, has insights from the AAFA and ICSC, and Steven Winnick, the vice president of Innovator Services, is with us to recount the World Retail Congress. We'll go in chronological order, and since the AAFA was first, Max, take it away.
The AAFA 2025 Global Supply Chain and Trade Conference I attended was on May 6th through 7th. And for some background, the AAFA is the American Apparel and Footwear Association, which is the leading supply chain voice and advocate for apparel and footwear manufacturers. This conference was almost 100% focused this year on tariffs and their effect on supply chains, as you can imagine, that is the hot topic. And so this conference was almost exclusively focused on that.
With the new tariffs and uncertainty regarding tariffs going forward, how are companies adjusting their manufacturing strategies?
A lot of the manufacturers are looking at how they can create diversification in their supply chain. This actually started in the pandemic when it was difficult to potentially get supply out of China for a period of time, but it's reaccelerating now. There's a lot of companies that are thinking about the concept of the rule of 30, which the idea is that no country would have more than 30% of your supply chain. But also a lot of people are thinking about multiple sourcing locations for the same product.
They really want to think about, you know, the concept is to really think about increasing agility so that you can move manufacturing quickly across different jurisdictions, depending on where tariffs kind of end up. And there's also a lot of discussion about partnering with suppliers. You know, how can you negotiate creatively to help both sides essentially, you know, kind of navigate this? Because this obviously impacts both the supplier as well as the companies that are driving the manufacturing. So, you know, how can people think about absorbing costs or sharing costs? How can terms be adjusted? What are the different ways that people can creatively work with their suppliers, the manufacturing plants, the factories, et cetera, in order to create a situation where they're minimizing the impact or sharing the impact across? And so it's really the concept of partnering. People we're talking about is going to lead to kind the best outcome.
What are manufacturers doing internally to manage these changes?
So internally, companies are also, there was a lot of discussion about collaboration and communication. The tariffs are impacting so many different areas that often are sort of report up into different parts of the organization. So that could be design, it's logistics, it's compliance, which should be in legal, it's finance, which obviously is in the finance department, it could be procurement, et cetera. And so the question is, how do you drive cross-functional teams to work together, right? And really thinking much more explicitly about how to do so, particularly because people have to make decisions in real time, react quickly, and have to do so in a coordinated fashion.
So a lot of companies are also thinking about how they can increase communication across the organization. You know, they're doing things like weekly newsletters as a good example. One of the things that Coresight specifically is suggesting companies think about doing is creating a tariff czar, right? So you have one point person who can help drive that cross-functional coordination and that cooperation across the company. That may not need to be a, you know, a role that's permanent. And it's certainly not a role that you would hire for separately, but rather having one person in the organization that's sort of deeply in the middle of supply chain acting as that, you know, sort of as an official point person to help drive uniform information across the company, help to get everyone on the same page so that everyone's kind of rowing in the same direction as they're reacting to the different news and the different decisions that are being made.
What other strategies or tactics are companies looking at?
So there are also a number of other strategy and tactics that were being discussed at the conference as well. I think some of the highlights around that is, number one is to continue to remember about compliance, right? Because compliance could be compliance relative to tariffs, other compliance areas, so that you avoid unintentional violations and costs. This might be not one that you would have thought of immediately, but there was a lot of discussion about it being relatively still extremely important because compliance in a sense is also being driven around clients around the new tariff rules.
There's also, this one is in some ways the most counterintuitive, but when you think about it, it does make sense. There's also a renewed focus on sustainability. There was a lot of discussion about that, but not sustainability for just meeting ESG goals, but rather the concept of how sustainability concepts can actually drive cost reduction.
So what would that mean? It would be things like consolidating materials, right? Thinking about shrinking labels, reviewing packaging and how can you take costs out of packaging, right? So there was a lot of discussion that if you can actually reduce the, in a sense, the use of materials and however you kind of define that or whatever opportunities you find, you would be actually achieving two goals. You're reducing your costs, right? Which helps to offset the increased costs of the tariffs, but you're also driving to achieving sustainability goals.
And then the last big topic that was discussed is this is a concept around first sale principle. So this in particular is the idea of declaring value based on the original transaction, which can often be lower than the final invoice. And so in turn, if you can define or declare the value based on a lower value than the final invoice, then your tariffs would be reduced because the percentage would be off a lower number. This was talked about as especially important in thinking about, you know, multi-country sourcing.
Because there's a lot of opportunity to actually find a lower price within that first sale principle than the final invoice may look like, which in turn will drive a certain amount of savings. So kind of in summary, there were two big ideas that companies were focused on. One is creating flexibility and agility in their supply chains. The second was creating coordination and cooperation internally across all the people that impact supply chain.
And then there were a number of other strategy and tactics that can have a directly positive impact on impact that tariffs may have as well that include compliance, sustainability, and the concept of the first sale principle.
Thanks Max, that was very timely and useful summary. Next, the World Retail Congress. And to give us an account, let's bring in Steven. Hi Steven.
Thank you, Philip. It's great to be here. So I attended World Retail Congress last week out in London, and it was a fantastic show filled with a great mix of industry executives across the retail and brand and manufacturing space. This year it was hosted in London. I believe each year there's a different city that hosts the program. And it was a really insightful, packed weekend with different interesting industry insights and panels and sessions that I'm happy to share some of our key takeaways here today.
Let's start with something that seems to keep resurfacing, tariffs. What was the buzz on global trade policy?
Absolutely. Tariffs were front and center unsurprisingly. There was a bit of a consensus at the show that the floor seems to be 10% on the tariff rate. Of course, we entered into that 90-day extension, which gave the US time to negotiate different tariff policies. But most recently, the friendly agreement reached with the UK still had a 10 % tariff floor. So it does seem like that will be the floor. And that was the sentiment discussed here at the conference.
So even with negotiations ongoing across tariffs, companies specifically that are manufacturing overseas will need to think of different strategies to offset what could be a 10% at the minimum impact on their manufacturing. And when we heard from Ian Bailey, as well as Pelik Seth, so Ian PDS, which is a global manufacturing and brand logistics company, Pelik Seth from Anco Global, which produces brands on a global basis, 3 billion plus in revenue.
They said that countries such as Southeast Asia could potentially face a greater tariff rate of 20 to 25% on the extreme side of things. So more broadly speaking, we're seeing a bit of a definitive shift away from global one size fits all supply chains.
And we're really starting to see retailers and brands focused on diversifying their sourcing, which they've been doing for years, but really finding the right capabilities in different regions, as well as looking to consolidate their supplier base as well, or a bit of economies of scale. So a very interesting conversation around tariffs at the show. I think it was a bit of a positive one where things seemed to be at least more under control. But at the same time, some adjustments right in your supply chain are imminent, it seems.
So it's not just about spreading risk, but also building tighter relationships with top suppliers.
That's exactly right. According to research from Bain, we heard about 50 % of companies expect to increase their spending share with their top suppliers over the next three years. So it's really a strategic play for resilience and efficiency as well as cost savings that I alluded to before being able to order more and do more business with their top suppliers can help bring down some of those potential cost increases.
Sustainability is a constant theme in retail. What felt different this year?
Yeah, I think, I think the tone around, it's a great question. The tone around sustainability has definitely matured. It's no longer, you know, flashy campaigns. It's about more systemic change. You know, the CEO of H&M gave a great discussion. Now the chair of Circle, though, said something pretty powerful that senior management must quote, eliminate the conflict between business and sustainability if execution is to happen. Really having that correlation or I guess like synergy between the sustainability decisions you're making as a company and how that impacts your top and bottom line as well as just your brand in itself. So I think that it's definitely a financial consideration as well for the business. She also shared H &M's model for using a central budget to cover sustainability premiums. So designers and buyers are penalized for making eco-conscious choices.
Any great examples of retailers putting this into practice?
Yeah, definitely. We heard a great example from Primark. They're making their garments more durable, removing neck labels and training staff in circular design. Curry's, for example, has the largest tech repair facility in Europe, preparing 1.4 million devices annually and recycling over 100,000 tons of waste, essentially turning repair and refurbish into a full high margin business. Very super interesting company. I recommend everyone takes a look at that one.
Omni-channel has become kind of a trite shorthand, but it sounds like a WRC that really got down to the nuts and bolts of what Omni-channel or unified commerce is really all about.
Yeah, totally. In terms of Omni-Channel, Nadine Graf, Beste Lauder, put it very bluntly, we go where their customers are. The lines are blurred, even if we don't like it. That's why they've launched products like The Ordinary on TikTok Shop and Clinique on Amazon Prime Beauty in the US. They're making a point in their marketing and product placement and sales to be where the customers are, be where they're shopping. So the foray into TikTok.
Speaker 1 (11:29.388)
with their products. The ordinary is a perfect example of them pivoting to make sure that they're getting their product in their brand in front of the customer, where they're shopping, where they want to buy and discover. On running is another great example. mean, these guys have been really entering the space and continue their impressive growth run. They balance D2C and wholesale. Wholesales help them build brand credibility and reach new customers early on. And now they're expanding to D2C because they've built this brand. And they also have very high touch retail experiences.
So it's about strategic channel building, not channel loyalty.
Yeah, I would say definitely about strategic channel building. I would still say not channel loyalty, but you know, customer loyalty is important. So, you know, I think we call it unified commerce here. Some people call it omni-channel, but it's really having your product at the point of customer discovery and at the point of customer purchasing. retailers are becoming more agnostic and more customer centric in their approach and they have no choice. Right. Customers are shopping more.
browsing more across different channels and it's important that you have your brand in front of them at the right time, the right place.
Your panel on disruptive retail brands seemed to strike a different chord. What stood out?
Speaker 1 (12:40.718)
Yeah, no, thanks for asking about this. So I moderated a fantastic panel really about disruptive brands entering into the space and how they could scale to grow from kind of startups to starting to make some noise to real contenders in the marketplace. We have three great companies all kind of, I would say, scaling from startup to scale up. And it was an excellent discussion.
very inspiring. One of the founders scaling a purpose led business called Unhidden, Victoria Jenkins, launched this brand as an adaptive apparel brand. And she talked about how her personal experience with disability led her to launch this fashion line that truly serves an underserved market. She discussed how one in four people are living with disabilities. And so she's had a very successful rollout recently expanding into stores.
And, you know, she is a bit concerned about AI's potential to create kind of disabled models without actual representation, less authenticity. So she's advocating for the disability community to engage with AI so they're not left behind, right? So they can better leverage that technology for all the benefits that other designers and brands are going to be leveraging for.
And what about the tech-driven brands?
And yeah, in terms of tech driven brands, so Urbanic was one of the panelists as well. They call themselves a tech company that wears a fashion hat, leveraging proprietary data systems to keep waste under 1%. While also tailoring their brands, they have two brands on their platform to local styles and trends. They just recently launched in India and they launched their second brand there as a matter of fact, and they're doing some
Speaker 1 (14:24.866)
very interesting things with their technology as it relates to product and branding as well as their sourcing capabilities. And then the last panelist is Knoops. Very interesting, premium hot chocolate brick and mortar. have about 25 plus stores, primarily London, Europe. They were actually ranked as Europe top a thousand fastest growing company by Financial Times. So they've built this culture of obsessiveness and
personalization where you go in and you customize your hot chocolate, canopology they call it actually. And there's all these different ways to create your own hot chocolate. And it really has created meaningful brand purpose as well as this authentic experience that's really resonating with their customers. So I think as a, as a whole, you know, the, the takeaways is being true to your brand as you're trying to scale and not losing the voice of the customer and your brand purpose, whether you're a tech driven,
company launching a new markets that thinking about local trends or you're a hot chocolate company that's getting this personalized experience, right? Or you're you know, adaptive apparel company trying to understand, you know, what your market wants, how to better serve an underserved community. so I think all the panelists really discussed smart scaling or smart growth, which I think was a fascinating conversation.
If you had to boil it all down, what's your biggest takeaway from World Retail Congress 2025?
Yeah, looking ahead, mean, think takeaways, retail is getting smarter, getting more resilient and more purpose driven from rethinking supply chains and embracing sustainability to leaning more into adaptive retail and customer centric distributions. It's clear that the winners are staying authentic to their brand. They're still very much thinking about product. Of course, technology is top of mind, but product is still key. And then they're thinking about innovation and prioritizing what.
Speaker 1 (16:23.454)
is going to help solve their foremost challenges and enable their top growth opportunities.
That's great. Thanks, Stephen.
Thank you so much for having me. And if anyone has any questions, we'd like to continue this conversation. I would love to chat more.
Fantastic. Now let's bring Max back in to talk about his visit at the International Council of Shopping Centers.
I attended ICSC's Las Vegas show between May 18th to 20th. Just for reference, ICSC is the International Council of Shopping Centers, which is a leading voice and advocate for retail real estate owners. And this conference in particular is targeted toward deals members and industry experts who are, you know, and it was focused a lot on driving innovation and discussion around the evolution in commercial real estate.
Speaker 3 (17:11.694)
What did you learn about how to use AI with real estate?
AI within real estate was a pretty big topic in the conference this year. And so there was a lot of discussion about how real estate owners can leverage AI in their business. And that was across a number of different things, right? First, actually, and foremost is that is around contract management. The idea that you can use machine learning and sort of analytics to help review contracts, drive consistency across key provisions, track compliance of contracts, and then also track renewals much easier done.
through AI and machine learning that it would be done by individuals trying to keep track of that on their own. The second topic of discussion was things like climate control. This is a little harder to retrofit older buildings, but certainly with new construction, the concept of using AI that's built into HVAC systems and things like that, the electricity so that you're optimizing the use of your electricity, your energy, et cetera, within a building and aren't relying on just having a.
a consistent schedule, but actually a schedule that's driven or not even necessarily scheduled, but turning things on and off or up and down based on actual traffic, based on what's actually happening in the mall or other shopping areas as well.
And then the last, you know, in some ways kind of the most interesting was the concept of thinking about staffing, right? Not just staffing in terms of general store traffic or just doing historical analysis on when things are going to be busier than others, but actually kind of in some ways doing real time staffing analysis as well. So that could be around things like.
Speaker 2 (18:41.42)
when do you send someone in to clean the bathroom? Or where does your security staffing, not just the levels of the security based on likely traffic, but also where's the security in the building? So the idea that you can actually use real time what's going on in the mall, where people are, where things are busy to move staff to be more effective by having that staff concentrated where the people are in the mall at any point in time, is kind of an interesting concept that came up during the conference.
Commercial real estate owners and retailers have been very concerned about the move to online shopping. What strategies were discussed to combat that?
Yeah, there's a lot of concern, you know, within retail in general, particularly around retail owners, but then retailers who have a large brick and mortar footprint about how are they dealing with the increased shift to online sales? And the answer, I think the most common or probably the most interesting answer, or maybe a better way to put it is the answer that kind of, think, will have the most impact is to think about the idea that people want experiences, right? That the store
In particular, the brick and mortar store is not just about going shopping to buy something, but rather it's to be out and to have experience. And by providing experience, right, people will go to the mall in order for that. And there was in particular Gen Z, we see this already starting to happen.
Kendra Scott of Kendra Scott jewelry, right? Gave a really great keynote at the opening of the conference. And she talked about her company thinks every single day about how to engage and excite their customers. And they also put their cultures to push this into essentially every employee in the company. But in a lot of ways, more importantly, they push it to every single person in each of the stores. So that store managers and store employees are thinking about what can we do today? What programs can we run?
Speaker 2 (20:30.466)
What things can we do to keep things exciting and interesting and drive a better experience for their shoppers? The other aspect in terms of what role does the brick and mortar store play within the sort of emerging ecosystem is the concept of, you know, the seamless shopping experience for customers, right? Customers want to be able to do research online and then go pick something up in the store or to try it on in the store, but then, you know, go home and think about it and buy it online or vice versa.
And each individual customer, right, you kind of has a different path that they want to run. And so there was also a lot of discussion about the idea of how do we create a seamless experience between online and offline that can support the customer's journey and the way the customer wants to interact and shop with us. then, you know, obviously the store is a very important part of that because people, you know, with a lot of categories and a lot of products and a lot of situations.
It's not just that they want an experience, of course, you know, that's an important part of it, but they also want to be able to have part of their shopping be in person. But at the same time though, it's not a choice between online versus offline. It's usually one journey for them and how you create, make that seamless for that customer is going to be critical for success going forward.
What other exciting applications of AI did you hear about at the conference?
There was a lot of discussion also at the conference about how real estate owners and the retailers can use AI to drive collaboration. And one of the interesting ways that people were discussing this is the concept of information sharing around customers, right? So the individual retailers have the behavior that the customer has within their store.
Speaker 2 (22:07.436)
And then the mall operators often have sort of broader information, not what they did in individual stores, although sometimes with loyalty programs, they do have that information, but they also have information about how they're trafficking in the mall, what their overall patterns are in the mall, et cetera. So if you think about, if you can combine those two data sets, right, then both the retail store as well as the owner, right, of the mall are going to have a much better understanding of the customer.
which then the second topic that people were discussing is then how do we create a more personalized experience for that individual that can help both within individual stores, but then also help that customer in terms of their journey or their day that they're spending in the mall overall. Right? So if you think about the idea of how retailers and mall owners can create a more personalized journey for the customer when they visit the mall, that better experience for the shopper will lead to them.
wanting to come back more, right? And you can use the data that they can share in order to drive a better experience, right? As well, they can, you you can have an understanding of what promotions are going on across the mall and knowing that shoppers previous buying behavior or shopping patterns, right? Really target what promotions that they would be looking for and that would help them to have a better experience.
So overall, you know, there was a lot of discussion about how AI and technology can be leveraged both across the mall, but also between the malls and the retailers, you know, and it starts with some really new and interesting ways that mall operators can use AI to, you know, sort of in their operations of the mall, as well as, you know, understanding their contracts. But then it feeds into the idea that more collaboration between the real estate owners and the retailers, sharing of data, analyzing that data together.
can in turn provide a better understanding of the customer, which can then lead to a more personalized experience for that customer, which will be a better experience and help to drive more visits and hopefully, you know, bigger baskets as
Speaker 3 (24:05.07)
Thanks Max and thank you for joining us this week on Retaili$tic. We have a busy June planned so make sure you check in each week for the latest episode. Visit us at coresight.com to sign up for our free daily update and to learn more about all the ways Coresight Research supports the retail industry. Have a wonderful day and we'll see you next week.