Retail Brew delivers the latest retail industry news and insights surrounding marketing, DTC, and e-commerce to keep leaders and decision-makers up to date.

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Katishi Maake

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Desktop computer with shipping boxes and money

Retailers grapple with returns

Total returns accounted for more than $761 billion in merchandise for US retailers in 2021—nearly 20% of which occurred after the holiday shopping season, per NRF.

Retailers grapple with the financial impact of the returns process 

Maeve Allsup

Map of the US showing warehouse locations

Here’s where experts say the next warehouse hotspots will be

Long Beach and Newark aren’t likely to relinquish their status as warehouse royalty, but companies are being forced to expand their footprint further inland.

Forget last-mile, it’s supply chains’ first mile that poses the biggest challenge for companies

Despite improving technology, investments, and consumer pressure, farm level visibility is rare.

A manufacturing plant icon depicting the retail supply chain

Supply Chain

Alex Vuocolo

In June, Sen. Maggie Hassan sent public letters to grocery giants Costco, Walmart, Kroger, Dollar General, and Albertsons asking them to quantify the impact of President Donald Trump’s 50% tariffs on steel and aluminum imports.

In a statement, Hassan wrote that while experts have pointed to the possibility of tariffs in general driving up prices, “grocery retailers themselves have provided little public information about the potential harms of steel and aluminum tariffs.”

Now the Democratic senator is looking for specifics, such as how exactly the tariffs could disrupt supply chains, raise costs, and impact jobs.

Coming up with clear answers to these questions could prove a challenge, however, as many retailers simply don’t have a firm grasp on how steel and aluminum imports—or other material inputs for that matter—fit into their cost structures.

“The challenge, especially on the derivative side, is trying to figure out what the value of the steel or aluminum in that finished product is,” Jonathan Gold, VP of supply chain and customs policy at the National Retail Federation, told Retail Brew.

Figuring this out requires working with vendors to dig into supply chains and figure out where inputs are coming from and what their value is, Gold explained.

However, those intermediaries are facing their own challenges from Trump’s trade policy, and what shakes out price-wise for the consumer could depend on what kinds of deals retailers and consumer brands work out behind the scenes.

And in the spirit of the inquiry, it’s all about the details.

For example, how these tariffs impact pricing depends in large part on a single derivative product called tin mill steel, which is used to make the cans that package everything from soup and beans to aerosol hair spray.

Extrapolating from research it released in 2023—when the Biden administration’s commerce department was considering imposing antidumping tariffs in the range of 98% on tin mill steel—the Consumer Brands Association estimates the current 50% tariffs could raise prices 9%–15% and endanger nearly 20,000 jobs.

It’s also unlikely domestic producers will be able to pick up the slack. US-based manufacturers meet just 20%–30% of tin mill steel demand, according to Tom Madrecki, VP of supply chain and logistics for the Consumer Brands Association.

“The US steel industry doesn’t really make that steel,” Madrecki told Retail Brew, adding that “they don’t prioritize it,”—largely because they don’t find it profitable.

Conagra Brands, maker of Hunt’s, Slim Jim, and Duncan Hines, revealed in a recent earnings call that it’s been forced to buy tin mill steel overseas due to the number of domestic manufacturing lines that have been eliminated since 2018.

In other words, someone is going to have to eat the cost of the tariffs.

The question of which link in the chain bears the weight is still being worked out, and some retailers have taken a hard line on the matter.

, Albertsons Head of Merchandising Omer Gajial stated the grocer’s position bluntly: “We are not accepting cost increases.”

As a number of retailers have stressed, keeping 

 for much of the industry, and CPGs appear equally sensitive to price. “There’s going to be this inherent tension between retailers and CPGs about…who eats that cost,” Madrecki said.

Gold also acknowledged that it was getting difficult for retailers and vendors, even those with long-standing relationships, to work collaboratively, as it appears neither party can afford to stick it to the US consumer.

“Nobody wants to be seen on the wrong side of the consumer,” Madrecki added. “CPGs also don’t want to lose market share.”

The answer to this conundrum, Madrecki argued, is to look beyond just tariffs and explore other ways to drive the domestic manufacturing of products like tin mill steel.

“My hope would be that on both sides of the aisle, some of those inquiries…raising questions about the impact of tariffs leads to a more productive dialogue about how do we ensure adequate domestic capacity,” he said.

Who will pay the cost of steel and aluminum tariffs?

Lawmakers want answers on how steel and aluminum tariffs will impact prices, but the question is still being worked out between retailers and CPGs.

Who will pay the cost of steel and aluminum tariffs? CPGs and retailers are still working it out

RTBR-Mastering inventory management audio embed

In the last five years, inventory management practices have swung from just-in-time to 

. Now retailers are trying to split the difference with a new focus on technologies, many of which are powered by AI, designed to optimize stock levels and mitigate supply chain risks regardless of what’s happening in the wider economy.

 for AI-related pilot projects, retailers are investing in new technology to help track and manage the flow of inventory. Here are a few examples of what’s being tested:

In May, Lowe’s launched an AI-powered app in partnership with OpenAI called Mylow Companion that gives employees on the sales floor the ability to quickly access relevant information.

The home improvement retailer touted the app’s ability to answer customer questions in real time, like “What kind of fertilizer works best for Bermuda grass?” However, outside of answering these kinds of technical product questions, simply knowing what’s available in the store is another challenge for employees, so the app will also provide updated inventory information.

“Through our collaboration with Lowe’s, AI is making it faster and easier for their associates to help customers find exactly what they need for their most important projects,” Open AI’s Chief Operating Officer Brad Lightcap said in a statement.

PetSmart offers similar capabilities with its gStore platform, which launched earlier this year in partnership with SaaS company GreyOrange. Through a combination of 3D location management, SKU assignment, and process flow optimization, the platform allows store associates to rapidly track and locate inventory. The upside is “greater inventory visibility,” according to Troy Siwek, gStore general manager at GreyOrange.

Staying on the topic of visibility, GNC is 

 to improve inventory tracking on the back end of its retail operations. The vitamin outlet this year started using AI-powered drones to conduct more regular and rapid warehouse audits, vastly improving the accuracy of its inventory counts, a process that had previously been highly error-prone.

Another kind of visibility is whether retailers can accurately anticipate what’s coming next, and lately the biggest stores are tapping AI to produce 

Big box chains such as Walmart, Target, and Home Depot have 

 they are using AI to help get their inventory levels just right amid an uncertain global trade environment. Even before the latest trade debacle, Walmart said it was using predictive analytics to 

 ahead of the holiday shopping season, and that it was incorporating weather data into its models, a practice that is spreading throughout the industry.

There are also hints of more innovations to come: Target CEO Brian Cornell teased shareholders back in May when he said “we have some compelling technology projects” aimed at modernizing and streamlining inventory management.

“I’ll have far more details to share over time, but for now I want to emphasize that our team is fully committed to this work so we can more quickly deliver on the long-term aspirations we have for our business,” he said.

Inventory management in the e-commerce era means improving visibility 

How retailers are optimizing and innovating their inventory management systems across online and brick-and-mortar channels.

Mastering inventory management in the e-commerce era means improving visibility 

Erin Cabrey

CPG giants from Kraft Heinz to PepsiCo have been saying their goodbyes to synthetic food dyes amid pressure from Health and Human Services Secretary Robert F. Kennedy Jr.—but not every company is giving in.

 in April that brands remove petroleum-based synthetic dyes from food products, as part of Kennedy’s Make America Healthy Again agenda.

Since then, a slew of big CPGs announced their plans to oblige. PepsiCo CEO Ramon Laguarta confirmed in April that the company is phasing out artificial colors across Lays and Tostitos by the end of 2025. In June, Jell-O maker Kraft Heinz said it wouldn’t launch any new products with synthetic colors, and would remove them from existing products where “not critical to the consumer experience,” replace them with natural options, or create new colors if natural ones aren’t available, according to a company release. Lucky Charms parent General Mills said it’ll remove the colors from its US cereals and K-12 school foods by next summer. Nestlé USA, too, said it’ll remove synthetic colors by mid-2026, and Conagra, maker of brands like Birds Eye and Duncan Hines, will phase them out of all frozen brands by the end of 2025 and all products by the end of 2027.

But some candymakers aren’t budging. A New York Times report this week 

 M&Ms maker Mars and Froot Loops producer WK Kellogg as notable holdouts. Mars told the publication its products are “safe to enjoy and meet the high standards and applicable regulations set by food safety authorities around the world,” while WK Kellogg said it’s working with Kennedy to “collectively find solutions that meet consumers’ shifting needs and wants.” Mars and WK Kellogg did not return Retail Brew’s request for comment.

Christopher Gindlesperger, SVP of public affairs and communications at candy trade group the National Confectioners Association, told Retail Brew in an email the group is “in firm agreement that science-based evaluation of food additives will help eliminate consumer confusion and rebuild trust in our national food safety system.”

“We follow and will continue to follow regulatory guidance from the authorities in this space,” he said.  

Gindlesperger noted, however, that a tight turnaround could be a challenge for brands, as spiked demand for the smaller supply of natural colors could lead to higher prices. The FDA’s April statement said it’s working to create a national standard and timeline for dye elimination, targeting the end of 2026 as a deadline.

Mars, WK Kellogg hold out as many CPGs pledge to remove artificial dyes

Companies from PepsiCo to General Mills have voluntarily created plans to phase out synthetic food colors at the request of Health and Human Services Secretary Robert F. Kennedy Jr.

Jeena Sharma

, which previously allowed tax-free imports of certain goods under $800, is officially in effect. While the change impacts many companies,two major fashion retailers are bearing the brunt of it already.

, Temu’s daily active users in the US were down 52% last month compared to March, while Shein reported a 25% drop. Both retailers also pulled back on US advertising spend, which contributed to a dip in popularity among shoppers.

While we don’t necessarily hear hearts breaking over the news, it does raise questions about their future in the US. Is it the end of China-brokered ultra fast-fashion retail in the US? Well, it doesn’t have to be, experts say.

“Industries most affected include apparel and fast fashion, consumer electronics, health and beauty, and home goods—sectors that rely heavily on low-cost, cross-border shipping,” Korhan Acar, partner in the strategic operations practice of Kearney, told Retail Brew via email, adding that while e-comm marketplaces such as Amazon can help third-party sellers pivot to domestic fulfillment, companies like Shein are “already transitioning to local seller networks, while others, like Temu, have paused direct shipments to the US.”

He also pointed out that some companies were already consolidating shipments by expanding regional warehousing and moving to US-based fulfillment models.

“Freight forwarding and 3PL services are seeing increased demand, while express air cargo volumes soften and bulk freight rises,” he said. “Shippers are also turning to long-term contracts to manage cost volatility.”

While these solutions could come in handy for companies like Shein and Temu in the short term, with the tax exemption out the proverbial American window, long-run profits will likely still be impacted, Kenneth Cochran, managing director in the consumer and retail group of Alvarez & Marsal, told Retail Brew.

“The general understanding is that companies like Temu and Shein have been positioning for this for a few years,” Cochran said. “A great deal of commercial warehousing deals over the past two years have involved Chinese logistics deals near the ports. Companies like this will position some inventory in the US but will also continue to ship from Asia, deploying creative solutions to avoid the de minimis impact.”

Is the end of de minimus the end of Shein and Temu's US reign?

Both retailers have reportedly seen US demand plunge.

Will tariffs increase the business case for AI adoption? It’s a good question. Let’s ask ChatGPT what it thinks.

“Yes, tariffs can strengthen the business case for AI adoption in the retail industry, though the exact effect depends on the nature, scope, and duration of the tariffs,” it said.

The chatbot then went on to explain over several bullet points that tariffs could push retailers to adopt AI in order to accelerate reshoring, optimize supply chains, and forecast changes in demand.

Then again it would say that, wouldn’t it?

To give the arguably biased bot some credit though, a whole 

 of companies are now pitching AI-powered business tools as a potential solution to tariffs.

To name just a couple, Salesforce recently unveiled its new “always-on” 

, an autonomous AI agent designed to rapidly process and analyze the 4,400-page US tariff schedule and provide “predictive insights” and “actionable recommendations.”

And supply chain management platform Kinaxis just launched an 

 that allows companies to simulate tariff exposure and generate strategic scenarios to assist with planning.

In such an uncertain economic environment, the business case for any tool promising lower costs and better predictions might seem unimpeachable. But investing in a new technology also comes with risks, and recent data suggests AI is even riskier than other tech investments.

In the words of IHL analyst Greg Buzek, the economics of AI adoption are “

.” Citing research from RAND, he noted that AI projects have a failure rate of 80%, compared to 60% for traditional IT projects, and just 30% move beyond the pilot phase, according to a Gartner analysis.

So is now really the time to be going all in on AI?

Disaster waiting to happen or golden opportunity: 

Buzek argues that it depends on the application. Retailers using generative AI for core business functions such as pricing without first going through a trial and error process and cleaning up their data is a “disaster waiting to happen,” he said.

“The single biggest correlation that we’ve seen in our research with generative AI success comes down to how much experience you have with traditional AI and machine learning in your company,” he said. “My biggest fear is those retailers that didn’t do that first part just try to jump to the second part.”

But now isn’t the time to sit on the sidelines, Buzek added. Instead, retailers should be getting started on iterating their way forward. “Failure isn’t necessarily a bad thing, because you’re going to have failure regardless of when you start,” he said.

On the other side of this experimentation are potentially significant returns on investment. A 

 of supply chain professionals from the IBM Institute for Business Value found that companies that invested in agentic AI saw 61% greater revenue growth than their peers.

And in a world where economic disruptions such as tariffs are a reality, Pushpinder Singh, global supply chain transformation leader at IBM Consulting, said the firm is directing clients to do a lot of “what-if scenario simulations, so that when an event hits you, you can analyze the impact and then decide what’s the best course of action.”

Kinaxis is providing precisely this function with its Tariff Response tool. Chief Product Officer Andrew Bell explained that it helps companies understand the impact of tariffs concurrently across the functional silos that often form in an organization.

For example, there’s how tariffs could impact consumer demand. Then there’s how they could impact costs. With this tool, both impacts are processed at the same time and shared across the organization to provide actionable insights.

“Tariffs can hit and affect any part of the functional supply chain, and the more of a concurrent view that you have of how any one change affects the whole the better your ability is going to be to respond,” Bell said.

For retailers weighing AI, tariffs present opportunity, risks

With tariffs rippling through supply chains, retailers are weighing the pros and cons.

For retailers weighing AI adoption, tariffs present a golden opportunity, big risks 

Between viral trends, shifting consumer behavior, and supply chain tumult, being set up for success in beauty today takes a lot more than a good primer. At 

 in Barcelona, Spain, earlier this month, global beauty leaders from L’Oréal, Coty, The Estée Lauder Companies, and LVMH, shared the foundations they’re laying to navigate today’s (and tomorrow’s) challenges.

During a panel focused on meeting future shoppers’ needs, Mark Elkins, GM of global e-commerce at L’Oréal, discussed the beauty giant’s approach to social media and social commerce.

Beauty is an “emotionally engaging and socially engaging” business, and he noted that 90% of consumers turn to ratings and reviews to inform their purchases. Meanwhile, omnichannel shoppers have jumped from 10% to 50% of L’Oréal’s business in the last five years as more consumers shop online, making social touchpoints like TikTok increasingly crucial, he said.

 of TikTok, but mastering social commerce isn’t easy (and requires lots of fees—paid to the platform, media partners, and creatives and affiliates).

“You’ve got to feed the content monster, which can be very costly,” he said, noting that working backward from consumer behavior to fully grasp how the algorithm works has been essential. “It’s not just a question about throwing media dollars at the platform and hoping it will work.”

Elkins said success requires integration of teams from media affiliate management to supply chain to enable real-time decision making, which has made the over-century-old company feel like a startup.

And in a panel on community building through social commerce, influencers, and creators, Coty’s chief digital officer Pierric Duthoit admitted nobody

knows how to create virality on TikTok, but it’s all about “test and learn” for the beauty company. Working with influencers and creators with “same DNA” as the brand helps minimize risk, but there is a sense that you have to “let it go” and trust that if “product is good, it’s gonna be okay.”

The Estée Lauder Companies’s supply chain regionalization

To “weather the storms” around tariffs and geopolitical uncertainty, the Estée Lauder Companies has turned to regionalization, a journey it began a decade ago, Jamal Chamariq, the company’s SVP of global supply chain, said in a panel on supply chain resilience.

Its global supply chain strategy revolves around the philosophy “source where you produce as much as you can and produce where you sell as much as you can,” he said.

Several years ago, for example, when Clinique’s Black Honey lipstick 

, selling out at many retailers, the company worked to establish a “higher degree of resiliency.” Now it’s shortened product development timelines and distances between suppliers, and utilizes Microsoft’s AI-powered ConsumerIQ for demand planning.

Now, Chamariq said, 75% of what it sells in the US is produced there, as the same goes for EMEA. That’s allowed it to quickly pivot when, say, a distribution center goes down for 24 hours, which has subsequently helped strengthen its retail partnerships.

“Everyone is facing the volatility and that joint business planning will help us actually, to weather the storms together, versus one of us, managing and handling the burden,” he said.

LVMH’s beauty sector, which includes brands like Benefit Cosmetics and Fenty Beauty, is focused on “unleashing” data, and Julie De Moyer, its chief data and AI officer of beauty brands, and Lou Bennett, its global VP of customer strategy, outlined five steps on how to do it.

The first, (“dream it”), is envisioning how data and AI will boost the customer journey, which Benefit Cosmetics did last year by creating a “connected consumer” department within the company, run by Bennett. Next is, “grab it,” by establishing data products, like its predictive algorithms for product recommendations or internal ChatGPT called MaIA.

The next step, “hack it,” includes using data and AI to help the company reformulate products, identify fluctuating demand to improve manufacturing, supply chain, transportation, and create more personalized marketing content.

“Taking a proof of concept, piloting it, and then running with it fast and hard,” is the focus of the next step, “own it,” Bennett said. This year, Benefit piloted a conversational commerce experience for consumers in WhatsApp using GenAI trained in Benefit’s brand voice to provide personalized shopping support. It resulted in 6,000 conversations over 10 weeks, Bennett said.

“Adoption is really difficult, and that’s our biggest barrier,” she said. “So this really unlocked the barriers to that.”

The final step is “shine with it,” making data insights, now included in part of the training curriculum for executive leadership trainings, core to all roles, De Moyer said. Bennett said the company is ultimately “democratizing data as far and as deep as we can,” by giving “everybody objectives throughout the business.

Shoptalk Europe conference Barcelona, Spain

L’Oréal, LVMH, Coty leaders talk social commerce, supply chain, and AI

Global beauty execs outlined their strategies for success at Shoptalk Europe. 

Andrew Adam Newman

At a campaign event where tables were festooned with groceries last August, then-candidate President Trump 

 if elected, he would “immediately bring prices down, starting on Day 1.” But almost 150 days into his second term, menu prices are up over last year, according to new data from Toast.

It will come as no surprise that avian flu-related increases in egg prices have driven up the price of omelets, with the median price on restaurant menus for April is $14.71, up 5.4% YoY. But the price of coffee you wash down those eggs with is up too, with the median price of a nothing-fancy regular cup up 5.1% YoY in May, to $3.50.

Moving beyond breakfast (one hopes), the median price for a beer was up 2.7% YoY in May, to $6.44.

Other menu item YoY median price increases in May, per Toast:

Results are based on transactions from the ~140,000 restaurant locations on Toast’s digital technology platform.

Toast also analyzed tipping rates, which for full-service restaurants rose a wee bit, from 19.3% in Q4 to 2024 to 19.4% after being flat for the previous three quarters.

While tipping is not as high as the pandemic plateau of 19.9%, Toast noted we’re in the ballpark of pre-pandemic levels, which ranged from 19.5% to 19.7% over 2018 and 2019.

President Trump’s budget megabill that passed in the House proposes exempting those tips from federal taxes, but in the Senate, the no-tax-on-tips is getting some 