For the last several years, I’ve made a list of annual predictions for the retail industry, which I share here, on Forbes, and on my podcast. And then, in what can sometimes amount to an act of self-flagellation, I take account of how I did.

So without further ado, let the grading of my baker’s dozen of prognostications begin!

1. The bifurcation (polarization) of just about everything accelerates. I’ve been talking about “retail’s great bifurcation” for quite some time, in articles, within my keynote talks, and in my first book. This was mostly about the struggles of the mediocre middle business models while success was being experienced at either end of the value spectrum. This year’s prediction was about how retail’s tale of two cities in many areas (malls, store formats, etc) was picking up. And, indeed, the struggles in the unremarkable middle (particularly among department stores) continued, incremental growth became concentrated among a handful of truly remarkable retailers, A malls thrived, while lesser quality regional centers mostly sputtered, and store closings grew over the prior year.  GRADE: A
2. For many brands, flat is the new up.  Above average growth was experienced by Amazon, Walmart, Costco, and relatively few powerful concepts (e.g. TJX, Abercrombie & Fitch, Warby Parker). But quite al ot retailers were lucky to get to breakeven, much less keep pace with inflation, as more consumer dollars went to services and essentials. Department stores were down big time, as were most big ticket categories.  GRADE: A 
3. AI: This time its personal. While artificial intelligence is hardly new, generative AI’s been garning lots of hype. This prediction foucusd on tangible results being generated (heh, heh) in delivering more one-to-one consumer experiences. While there was evidence of significant experimentation across a spectrum of retailers, big and small, and lots of tech providers dramatically upping the ante on all things AI, there weren’t a significant number of breakthrough scale worthy adoptions. At the same time, there seemed to be a bit of disillusionment creeping in. GRADE: B-
4. The D continues to come out of DTC—except for some legacy vendors. A new era of direct-to-consumer focused business models were all the rage. Until they weren’t. With a few exceptions, valuations for most high profile “disruptor” brands have collapsed and many are now turning to wholesale channels to expand their reach and lower customer acquisition costs. At the same time, brands with long-standing roots in product design and manufacturing (think LVMH, Levi’s, and more) are aggressively opening their own stores and dialing up their e-commerce capabilities. Direct from factory models like Shein and Temu are among the fastest growing retail brands.  GRADE: A-
5. There is a culling of the once and future unicorn herd. As discussed above, many of the highest flying unicorns have crashed back to earth, with some losing more than 90% of their IPO valuations. Showfield’s and Neighborhood Goods, two of the hottest start-ups, are now gone. Allbirds, once worth over $3 billion, now has a market cap of under $60mm and has closed about half its stores as it continues large operating losses. Yet many wobbly unicorns managed to hang on and there weren’t nearly the number of acquisitions or bankrupticies as I imagined.  GRADE: C
6. Honey, I shrunk the store (again).  I first wrote about the incredibly shrinking store format back in 2021. I anticipated renewed interest both in some retailers pursuing more of a hub-and-spoke strategy (Macy’s, Ikea), while others worked to right-size overly large spaces (Nordstrom closing the third floor of a Dallas area store and major mall developers repurposing retail space to residential and food). There was a solid amount of activity, but ultimately not a major acceleration, perhaps due to interest rates and inflation in construction costs remaining high.  GRADE: B 
7. Neiman Marcus and Saks merge. As a former member of the Neiman’s senior leadership team who may or may not have assessed this idea more than once, I have long believed a merger was inevitable. There is simply too much multi-line retail capacity chasing too little demand, along with poor growth prospects. The similarities in the two business models, along with more than a dozen overlapping store locations, makes the consolidation business case very compelling. Nailed it!   GRADE A+
8. Nordstrom goes private. Some of the growth challenges that spurred the Saks/Neiman’s deal are at play here, and Nordstrom badly needs a more aggressive reinvention, which (arguably) is more easily done out of the harsh light of the public markets. I nailed this one too!  GRADE: A+
9. Apple’s “Vision Pro” is a big nothing burger…for now. Unlike some (I’m looking at you Scott Galloway) I believe “spatial computing” may very well have a future. But I just couldn’t see how a bulky, expensive face computer was going to light up the world. As it turns out, Apple was forced to cut production due to slow sales and Apps produced for the Vision Pro tailed off shortly after release. A sleeker, cheaper version might change things but for now, move along, nothing to see here.  GRADE: A
10. Sustainability schizophrenia hits news heights. Consumers say they are all about “purpose” and prefer products that are good for the earth. And yet Shein and Temu are two of the fastest growing retail brands. Of. All. Time. Lots of retailers marketed and expanded their resale and recycling efforts. But the “direct-to-landfill” brands added many, many billions in incremental sales and Amazon launched Haul.  GRADE: A-
11. Bailing still doesn’t fix the hole among those stuck in the mediocre middle. Much hyped, multi-year turnaround efforts continue at brands that have been trapped in the unremarkable middle. Amid cost-cutting, store closings, and incremental merchandising changes at Macy’s, Kohl’s, Foot Locker, The Bay, John Lewis (and plenty of others), half measures continue to avail them nothing. Sales continue to fall and profits are proving elusive. On the positive side, Marks & Spencer has gained quite a lot of traction and there are glimmers of hope at Gap.  GRADE: A
12. Health-related services are this year’s retail media networks. This prediction centered on the idea that out-sized growth in health services (for both humans and pets) would occur, stealing some of the hypey headlines from retail media networks. While Hims and other online players did deliver strong growth, and some expansion of pet services did happen, there was considerable retrenchment of efforts from Walmart and the major drug chains. And while the strong growth of RMN’s is mostly concentrated with Amazon, Walmart and a handful of others, they haven’t lost their luster. GRADE: C+
13. Commercial real estate becomes a slow-motion crisis (if we’re lucky). My worry was that as daily office occupancy would remain barely over 50%, many properties would experience defaults setting off a mini financial crisis which would have material impact on retail. As it turned out return to work efforts have stabilized many of the riskier assets and WeWork’s bankruptcy did not have the feared contagion effect. Thankfully.  GRADE: D

If you want a more fulsome discussion of these predictions we recently released two episodes of the Remarkable Retail podcast where we unpacked them. You can listen here and here, or on all major podcast platforms.

I’ll be back with my 2025 predictions the week of January 13th.

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