Cautious optimism at NRF around AI and shopper sentiment in 2026

0:08Hello and welcome to the Modern Retail Podcast. I am senior reporter Gabby Barco. I am here with my co-host Melissa Daniels. How are you this week, Melissa? I'm doing well. I'm coming to you from a sunny Southern California in my quarter zip drinking a prebiotic soda. So this could not be a more modern retail setting for me right now. I love that. I am fresh off of NRF this week here in Chile, New York City, where I attended with our colleague, Julia Waldo, who is joining us this week to talk all things NRF. Hello, thanks for having me. Thank you for being here. I can't wait to have this conversation.

0:52I've never attended NRF, but people are always asking me, you know, weeks before it happens if I'm going to. It's like, are you going to NRF? Are you going to NRF? And I'm like, I haven't been in New York City in over a decade, probably. It's New York's hottest club, like Stefan. would be on this today, you know? Well, actually more on that later because Julia did indeed attend a show. So we'll talk about that. But yeah, so, you know, for those unfamiliar, NRF is literally quote unquote retail's biggest show. And so it happens every year around this time. And to me, it always sort of is like the table setting for what's gonna happen throughout the year.

1:37and a lot of retail execs are making their big, bold predictions throughout the three days. Yeah, for the uninitiated like myself, there's around 40 ,000 retail professionals who attend this conference. So it's one of the bigger trade shows in the industry. But as we mentioned, Gabby and Julia were there on the ground doing some reporting for NRF. You know, set the scene for us, for those who weren't there. What's it like to attend this event at the Javits Center, I believe. Okay. So I have been a few times at this point and I guess I always, you know, you're emerging from the subway station. You're hit by a wind tunnel because you are essentially in Hudson Yards and it's very cold.

2:22I always associate it with the freezing cold. And then you enter and it's a little overwhelming, I think, if you don't have a plan. This year, I believe we had like around 40 ,000 attendees. And one thing about it, I always clock is that it's very international. It's very global. So you're like hearing, even in the press room, we're hearing like all different languages next to us. So it is pretty cool in that like it's a very global trade show, unlike some of the others that we attend. Is this the kind of setup where there's, you know, a trade show floor that's full of vendors hawking their SaaS and things like that, as well as panels going on in different stages concurrently?

3:06Yeah, that's exactly right, Melissa. So yeah, there is an expo floor. There's one on the third floor. There's one on the first floor. These are ways in which vendors can show off their new technologies and new products, try to do demonstrations. There's a lot of that. And then as well, there is programming. So there is a series of panels. There's also keynotes. These start from really early in the morning, like 8 a.m. and go, you know, late into the afternoon. And also on the side, there are, you know, additional opportunities to, you know, have meetings, to grab some food. I got some really good meatballs this year.

3:50So shout out to that. But yeah, it is very overwhelming that there's a lot of escalators and a lot of elevators and just a lot of ground to cover. Like my steps, my step count for these days is always really insane because I'm just running around. So you do get your exercise, I'll say. So getting into some of the themes that you were talking about and hearing others talk about, I imagine AI was a big one. Yeah, pretty much. It had been the last couple of years, but Julie, I don't know about you, but it did feel like it was pretty much the dominant topic, more so than even something like tariffs, which I thought was interesting in contrast to about a year ago when everyone just didn't know what was going to happen with the tariff policies.

4:42And so this year, it was a lot of, I guess, concrete examples, and we'll get into it in a minute, but you did see real real products and real tools on the floor. They were like, okay, yeah, I can see this application in real time. Yeah, it was interesting because I feel like in previous NRFs, like as you said, yeah, AI was a topic that was really buzzy and that people wanted to talk about, but it seemed like in the past it was mostly like generative AI. You know, how are companies using tools like LLMs to kind of tweak their marketing campaigns or like adjust the product descriptions on their websites and things like that.

5:23And then this time, Agentic was really the main player. I feel like Agentic AI, Agentic Commerce, that showed up so many times. I would say even looking at the descriptions of the panels and the keynotes, that came up about 20 times, I would say, over the course of the agenda. So just in my conversations with folks and also in terms of the programming that I attended, yeah, Agentic and how to, you know, help shoppers, you know, find your products, but also, you know, complete these transactions through AI. That was something that really, really popped in that there seemed like there was a lot of optimism around.

6:04Well, this was also an opportunity for brands to talk about news that they wanted to share, right? I mean, I think it's my understanding that sometimes NRF is an opportunity for brands to go up on stage and deliver an announcement that maybe they've been keeping under wraps because they know they're going to have a lot of people there to pay attention to it. Did you guys note any news or what was sort of the newsy topics that people might have been discussing? Yeah, so this launched on January 8th, I believe. So in the lead up to NRF, but was still very present there and was actually discussed in some panels that I attended, but co-pilot Microsoft's tool, they announced this checkout feature that's, you know, very similar to instant checkout in chat GPT slash open AI.

6:53There was this presentation by an executive at Urban Outfitters Incorporated, which oversees, you know, Urban Outfitters, Anthropologie, other brands. And they talked about how they are a partner in this new co-pilot checkout function and how people can say things like, hey, I'm looking for a professional dress in size medium that's fit for, you know, a business conference in the color red. And then the agent will give you recommendations, including from these urban brands, and you as the shopper can check out that way. And also another big announcement that came up was this new system from Google called the Universal Commerce Protocol.

7:40And that is essentially like an open source standard for agentic commerce. And that's really interesting because it's endorsed by all kinds of partners, including Best Buy and Macy's. And really what this does is it kind of looks to, you know, quote unquote, democratize the agentic commerce process in that, you know, if you are a retailer brand and you're looking to really participate in the agentic commerce ecosystem, you can then use these sort of tools and guidelines that Google has laid out. So I would say those were some of the things that I was monitoring. Yeah, I think the Google announcement was pretty big, especially I thought one thing that was interesting is that Google says this UCP is going to be basically powering all of the shopping in its AI mode.

8:29So like if you're in the Gemini app and you're asking it, you know, find me black pants or whatever it may be, this will be sort of the backend that's powering it. And it's obviously integrated, yeah, with things like Shopify, Target and whatnot. So to me, it feels like this broader push towards all of these retailers trying to figure out how to work together on the agentic commerce front. It also sounds like there's a bit of an arms race happening here. I think we've done some reporting on this ourselves and certainly read it in other publications, but it's like, you know, which agencies, whether that's Google, Microsoft, OpenAI, you know, who's going to create these sort of commerce tools that are powered by AI that A, work the best and B, see adoption?

9:19Because I think this is still also nascent. And this is what's funny to me about events like this is everyone gets so like laser focused and super obsessed about like these topics that are big and changing the world. But like, I don't know if I've had any friends come up to me and say they've used agentic commerce. Like maybe they haven't, they don't know. But all this stuff is evolving so fast, you know, at the organization and enterprise level that I'm still sort of waiting to see it trickle down into reality. Does that make sense? Yeah, it's interesting because one of the sessions that I was in, they actually asked the audience like, okay, how many of you have used AI for shopping?

9:59And like the majority of people put their hands up. And then a follow-up question was how many of you would actually trust AI to check out on your behalf? And like about half of people put their hands down. So even among like the retail professionals in the room, like they're not even really doing it. So I feel like, you know, it kind of shows that there's still a long ways to go in terms of the progression of these tools. But yeah, I totally agree, Melissa. I don't have friends that I'm hearing that are saying this as well. Did you feel like conversations you were having around this were more grounded maybe than they were this time last year when some of this was a little more hypothetical?

10:39Because it seems like there are brands that have more tools that they're getting data about in real time, people are experimenting with them that I imagine there was maybe more of a sense of reality and case study to these discussions, whereas last year was maybe a little more hypothetical. Yeah, I think so. I think, like I was saying earlier, there's more of these like concrete initiatives or tools that we're now hearing about, even though sometimes my head is spinning, trying to decipher what they all mean. But yeah, talking to some of the analysts I had meetings with on the ground, it seemed like they were sort of cautiously optimistic that we're really getting somewhere.

11:19And now it's just a matter of application. Yeah. It seems like brands and retailers are excited about the future when it comes to Agentec Commerce, but still have a lot of questions and want to know more specifics. And I was talking with the head of Agentec, essentially for PayPal. And he was telling me that, you know, among the partners that they have, a lot of the conversations come up around, you know, can we increase the cart size, you know, in terms of these instant checkout functions? Because right now, for the most part, a lot of people can just buy things, you know, one-off. But he was also saying like loyalty is something that he's hearing a lot from merchants.

12:01You know, right now, you know, it's very difficult to integrate a loyalty program into, you know, things like instant checkout. And so that is something that, you know, these brands and retailers want to be able to have so they can have this customer data and follow up there. And so that's something that I think we'll start to see trickle out more later in 2026. Yeah, I think the customer data, which is so interesting, because if you cover D2C brands, or you talk to anybody in D2C, it's like, that is what they've been working on for a decade plus, right? It's that direct relationship. So now that you have this instant checkout, it's like, I don't know.

12:40I mean, they will have to build out tools that integrate all of that. But is the average person going to be entering all of that info if you don't need to? Because it kind of defeats the purpose, right? Yeah, that's huge. It's so much work. I was just having this conversation with somebody the other day about how there's still a lot of integration challenges when there are so many different places you can check out now or whatever layers you're sort of putting on top of that. Maybe you have a couponing app that you're trying to use when you check out and it might work in a browser, but not on the app.

13:12And would that also work if you were checking out through Google or through ChatGPT? And it's just really hard. I think the more kind of layers you have to make sure all of that is coming through in one checkout. And frankly, as a customer, it's going to be a pain point. You're just going to be like, maybe I should just do it on Amazon. You know what I mean? You're going to go back to something easy and tried and true. Yeah. I'll just say as a customer, yeah, I think you don't want to jump through multiple hoops when you're in the purchase process. And so on a website, for a brand, if you can log in and already have your loyalty information there, and then when you check out, it's already integrated versus checking out in ChatGPT.

13:51And then you have to go and contact the merchant and be like, hey, can you reflect this purchase in my loyalty program is just, it's more friction for the customer. And, you know, whether the customer will actually just abandon the transaction completely, if there's too many hoops to jump through, I think is something that a lot of folks in the retail world are trying to think about and avoid, honestly. Another theme was, of course, like consumer sentiment and spending, which of course is something we think about every single day. But I did feel like that was something that was coming up a lot, not only in the panels, but also just anecdotally talking to people, because that's still a big question mark.

14:34One sentiment I heard was that, yes, the consumer is still very resilient, but they're also much pickier. So maybe, you know, that wallet share is not going as far as some of the brands want it to. So that is, I think, going to be another thing in 2026. And then, you know, the sort of like backdrop of the current political climate, immigration, that kind of thing was coming up because, of course, you can't ignore that one when, you know, the news cycle is what it is right now. Yeah, on the consumer sentiment standpoint, were there any like panels or even just informal discussions that you all attended or conversations you had where people were coming up with examples of strategies that are working for them right now.

15:23Like, you know, I'm thinking about some of the ways I'm seeing more brands seeming to offer, you know, bundles or mystery boxes and things that really stream value. And I know this has been a strategy that people have been using, you know, since the dawn of DTC. But I also feel like right now, because people are so cautious about how they're spending their disposable income that you almost have to get more creative with the offer. Yeah, it was interesting because I sat in on this presentation by Walmart Fashion. And basically, they talked about how a lot of their customers are really looking for value at this time.

16:01As you said, Melissa, they want to make sure that they are getting a good deal, but also that they are really focused on all of the different aspects of what value can mean besides price. So like making sure that things are, you know, long lasting and durable, you know, that they aren't just focused on the latest trend, but, you know, are something that could override, you know, when trends change, things like that, you know. And there was some interesting data from Contar that they shared at the event about how a large portion of Walmart shoppers prioritize value in terms of things other than price.

16:40But then also a large portion of Walmart shoppers want to make sure that they stick to a budget when they're shopping. And, you know, about like half of Americans, I think it's 145 million people are shopping with Walmart every week. So I think that this really shows that there's this focus right now on making sure that your products are both well-priced, but also are things that people actually want to buy. And so I think that's going to continue to be a focus in 2026. Yeah, I mean, to that end with what brands are thinking about, Gabby, I think you had attended some panels looking at some big DTC brands like Away and what their strategies are with consumer acquisition and retention right now.

17:22What were some of your big takeaways there? Yeah, so this was execs from Rothy's, Voree, and Away. So they are mainstays in the D2C space. And there were a bunch of different takeaways and sort of lessons that they've learned over the last few years, including a pandemic, recessionary period, and whatnot. But I think building a brand for longevity, sort of similar, actually, on theme to what you were just saying and like focusing on quality over quantity in the age of dupes when you can go and get a suitcase that looks just like an away bag but maybe doesn't have a lifetime guarantee or it's not you know it's up to the same standard quality wise so that's something they're really honing in on in the messaging and trying to kind of elongate the lto especially now that you know customer acquisition costs are just at an all-time high compared to when these brands first launched.

18:23You know, Gabby, at the top of this conversation, you mentioned a little bit about tariffs and how last year maybe that was a much bigger part of the conversations that people were having. Did either of you, you know, talk about how brands are dealing with tariffs or hear anything different about the strategies there? Because what I'm hearing from my neck of the woods and with my sources is that everyone's just kind of operating like they're here to stay. Yeah, I do think in contrast to last year when we really didn't know anything, it was definitely a sort of matter of fact sentiment of like, they're here, even though we're waiting to see what the Supreme Court says.

19:02It doesn't seem like they're holding their breath for that. I think like the idea is that, yeah, we're just going to operate and figure out how to reduce these additional costs as best as possible and see what happens versus sort of like the chaos at the beginning when we just did not know how these were going to affect people. So it's kind of a wait and see. Yeah, I didn't hear tariffs really come up at all, you know, in terms of the presentations that I went to. And I mean, last year it was interesting because I would have expected last year, honestly, for tariffs to have a bigger role in the NRF programming.

19:39But and I wrote about this for us last year, but, you know, very few of the like formal keynotes and presentations had tariffs in the title, even though it was something that, you know, a lot of the people on the ground were talking about. And so, you know, this time around, I think as, you know, you said, Gabby, I think people have just kind of accepted that this is the new normal and they're trying to just move forward. And I heard a lot more about how people are, you know, optimistic about 2026 and, you know, had good holiday seasons and are coming off of that. And I think that there is kind of this idea of like we want to look forward and just kind of blaze ahead in terms of, you know, having a more positive outlook versus kind of reflect on how the last year maybe was tumultuous for our businesses.

20:26So that's that that was kind of my impression. yeah that makes a lot of sense with what we're we're hearing from brands all over the place um you know it sounds like this is one of those situations though and i've been to other trade shows where you know you have your your expo floor that's really crazy and filled with vendors you have your panels that are you know maybe a little more buttoned up and and informal and then you have a bunch of sort of informal and or you know brand and vendor sponsored events in between and adjacent and on-site and off-site and all these things. Like the event sort of happens in multiple places and in multiple forms, which is, can be quite exhausting.

21:06You know, how did you guys sort of, yeah, how did you guys sort of sustain your energy or like what tips were you getting from other attendees about how they just sort of make the most of this environment? it coffee definitely helps i will say yeah fuel yeah especially for julia who was a trooper and was there all three days i i was um only there partially uh for my own coverage but yeah julia what was like what was your highlight would you say because i remember when we were together on day two i believe we were both sort of having that afternoon uh crash and of course being on deadline, you know, that kind of thing.

21:50You're just trying to get everything done before you get kicked out, you know, and the doors are closing. Yeah, no, I was very tired at the end of each day. And honestly, that, you know, it definitely made it easier to sleep at night because I was so wiped. But yeah, I would say my favorite part of the conference that wasn't the official programming was the Joe Jonas concert. That really gave me extra fuel, I have to say. That came in on Monday night, and I feel like it was good because it was halfway through, and I was dying a little bit, but that did help reinvigorate me. So shout out to Joe Jonas.

22:28Thank you. Oh, my God. How was the show? It was so good. It was really funny because I don't know what they told Joe Jonas about what this conference was, But he literally said something like, you know, when they first told me about this opportunity, I didn't know what the hell this was. And I love it. I love it. Which is fair. Which is fair. Yeah, that's fair. But, you know, he really embraced it. He played some DNCE songs. He played some of his own stuff. He did tell us that he couldn't play a lot of Jonas Brothers songs because, quote, you didn't pay for that, which is iconic. I guess there's like a higher price point if you want him to sing a bunch of Jonas Brothers songs.

23:11So yeah, this is our peg for anyone who's in the event and conference booking industry to share anything they know about talent rates for these kind of shows, because I feel like there has to be a whole cottage industry there that we don't know about. Yeah, yeah. Yeah, I'm so fascinated by it. First of all, this was a very hot ticket that the rest of us, actually only Julia from our team, I have to say, was able to get in. I was shut out of this event. So I was told that it was sold out. So yeah, it's, I mean, it's kind of doing its job, right? Which is that you want all the media and all the attendees to, yeah, fight over these tickets.

23:55But I do think, yeah, this sort of like talents at these industry events are really interesting to me because I do always wonder like what the artists are thinking. I think about a year ago at Expo, I walked into like a Diplo set and it felt like, I was like, well, what is this? Why is Diplo here? But it turned out he was an investor in a brand there. But yeah, it's always really interesting because they draw a crowd. But then you're also like, I wonder what they think of this. Because I saw Julia I saw some of your Instagram stories and it seemed like Joe Jonas was like trying to be like yay retail no literally he ended the concert with like let's go retail we can assume that Joe Jonas shops online yeah we can assume that that's something he does he has a brand yeah I mean they all do yeah they have their like popcorn with big rob and everything so oh yeah Yeah, yeah, yeah.

24:52That makes sense. Oh, I see he's a global brand ambassador for scouch and soda, too. That squares. No, there is definitely a whole industry here. I saw that Jean-Baptiste is opening Davos, which, you know, someone get me to Switzerland next year. Yeah, same. That sounds great. Yeah, I don't know. I don't know if we are on that press list. But yeah, it was interesting. Well, at least, Julia, you got to enjoy yourself a little bit in between thinking about all of the other relatively heavy topics. True, true. Did you have any good experiences on the expo floor? Julia, I think you were texting me some robots that are going to be selling us items in the future, which is disturbing, to say the least.

25:42Yeah, this was bonkers. Cool, I guess, but disturbing. Yeah. This was at the Verizon business booth. they had this robot and like a Verizon employee would give the robot prompts. Like he was talking into a microphone and the robot would like process it, pick it up and then do the thing. And so, you know, some of these prompts, they weren't even retail related. Like the, the, the Verizon employee was like, okay, show us your exercise routine. And then the robot started like literally doing yoga. So I don't know what that means for the future. The robot doesn't have tendons. What is happening? She was bending stuff.

26:16I don't know how this was possible, but like the elbows were bending and I was kind of scared. So that might be coming to your local store soon, I guess. I'm not ready. I'm not ready either. Was there any like good vendor swag or experiential pop-ups when you were sort of walking through. I know sometimes there's like games or giveaways and brands or vendors really and tech companies getting folks to kind of stay at your booth for a minute so they can sell you on their product. And I think this is then where people start to flip their badges around, right? Because they don't want to get zeroed in on.

26:59Yeah, I think it was SAP that was doing a pickleball themed activation. I didn't participate because I'm really bad at pickleball, but you could go up and like actually hit the pickleball with a paddle. And I guess it was supposed to tell you something about, you know, your accuracy rate and show the technology that they have for certain things. So that, that was fun. I didn't go to this either, but there was apparently a go-kart type of thing that you could do in the like fast food area. There's been some coverage of that online. So I would look that up if you're curious, but yeah, definitely a lot of handing out of, you know, pens and mints and there were some, you know, plushies and all that good stuff.

27:47Yeah. You can get a year supply of hand sanitizer if you use a trade show floor expertly. I might have to make a TikTok about that at Shop Talk this year. That's a good idea, actually. All right. Well, I'm wondering if there's any other big takeaways, you know, whether it's things you learned, funny conversations you had, or just how starting the year at an event like Retail's Big Show, you know, kind of kicks off the way you think about your coverage for the rest of the year. Well, you know, it's stating the obvious, but AI, of course, is the big one. You know, it's not going away. It's just accelerating, if anything.

28:26And so, yeah, it kind of just set the mood, like you said, for the rest of the year. And then I do think the political aspect is pretty interesting because some panelists were being asked, like, how do you think immigration, for example, might potentially impact something like consumer spending, you know, when there's a lot of movement happening on the ground? And I believe I don't think the person had an answer for that, which is fair because I would not know how to answer that either, to be honest. But, yeah, I think a lot of question marks there had me thinking about, yeah, what maybe we're going to be talking about by the end of the year.