In retail, one thing is certain — uncertainties are inevitable. How retailers adapt and thrive through uncertainty has become a hallmark of the industry.
We’re joined by Matthew Shay, president and CEO of the National Retail Federation, to explore the resilience of retail and the landscape, policies and trends that are shaping 2025.
Retail rang in the new year on a high note — holiday sales grew by 4% in 2024, and sales for the calendar year were up by 3.6%. Now, “we’re at the beginning of a new year, a new administration, and we’re watching the evolution of the economy,” Shay says. “As we get into 2025, I think we’re poised to continue to have another strong year, but we have to navigate all these uncertainties.”
He says variables include policy decisions such as trade relations, taxes, and immigration and workforce reform. Even in the face of the unknown, Shay feels confident in the industry. “Retailers are finding ways to be creative and adapt in the face of uncertainty,” he says.
One major way retail is adapting is by leveraging AI and other technology to optimize the customer experience.
“The thing that everyone is trying to do is remove friction,” Shay says. “You're trying to create as seamless an experience as possible. We went from two- to three-day delivery to next-day delivery, then same-day delivery. You order it at lunch, and you have it in two hours. AI has a role to play there.”
While AI gets all the fanfare, Shay believes retail stores are the real heroes of the story. “Ten years ago, people were saying stores are all going to be out of business,” he says. “But now, stores are more important than ever as a channel of engagement, experiential retail, fulfillment, delivery and inventory management.”
Shay hails this as a sign of retail’s nimble adaptability. “The exciting thing about retail is that because it’s consumer-centric and consumer-driven, retailers are constantly pushing themselves and each other to find new ways to create the right consumer experience —whether it's the use of AI, reducing friction by having walkout stores or creating new store experiences. That’s all part of what makes it a dynamic industry.”
Changing economic policies also play an essential role in retail. Shay notes that NRF will be engaged in promoting pro-growth policies in the areas of trade deals, tax reform, and labor regulations.
“For all policy proposals we ask, ‘Are they pro-growth? Will they create economic activity?’” he says. “Consumers are recognizing the benefits of a growing economy. We're creating jobs, we're driving wage increases. Policies that tend to support growth in general — whether that's tax policies, workforce policies, trade policies — all of those we look at first from our perspective: Do we think they're going to help create a more dynamic economy?”
Listen to the full episode to learn more about the policies impacting retail, trends to look out for in 2025 and Shay’s best career advice.
(00:01:15) The changing retail landscape
2024’s strong holiday season and retail performance
The uncertainties we’re navigating in 2025
How the new administration’s policies will impact retail
Informed and resilient consumers
(00:07:21) 2025 retail trends
How technology removes friction from the customer experience
How AI touches every dimension of retail
Stores as the unsung heroes
(00:10:40) NRF’s priorities on policy
Supporting pro-growth economic policies
Tax reform and corporate tax rates
The impact of immigration and labor reform on retail
Trade deals for a pro-growth environment
(00:15:26) Shay’s best career advice
Making the most of the opportunities you have
Why you should be the one to volunteer
Resources:
Learn more about NRF's policy priorities.
Become an NRF member and join the world’s largest retail trade association
Learn about retail advocacy at nrf.com/advocacy
Find more episodes at retailgetsreal.com
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