In a retail landscape marked by fluctuating sales and rapid technological shifts, understanding the strategies that separate the leaders from the laggards is more critical than ever. We sat down with e-commerce strategist Zainab Hussain to dissect the latest earnings reports from top retailers. Our conversation unpacks the real-world implications of cutting-edge trends, from Abercrombie & Fitch’s venture into AI-driven “agentic commerce” to Gap’s massive success on TikTok. We also explore the complex dynamics behind diverging online and in-store sales at giants like Kohl’s and Target, the long and arduous road of digital transformation for brands like Bath & Body Works, and the counterintuitive push by digital-native brands like Joybird into brick-and-mortar.
Abercrombie & Fitch reported a 6.8% sales jump while discussing its new partnership for “agentic commerce.” Could you walk us through how a customer might use this AI to complete a transaction without leaving a chat, and what specific metrics you’ll use to measure its success?
Absolutely, this is a fascinating step beyond the typical chatbot. Imagine you’re using an AI answer engine like Perplexity to plan a weekend trip. You ask it, “What should I wear for a fall weekend in the mountains?” The AI might recommend layers, including a flannel shirt and a vest. Instead of just giving you links, an AI agent powered by this Abercrombie partnership could say, “Abercrombie has a highly-rated flannel that would be perfect. What size are you?” You could then select your size, color, and complete the entire purchase using PayPal, all within that single conversational thread. It’s about collapsing the sales funnel down to a single point of interaction. To measure success, we have to look past raw sales. I’d be tracking the conversion rate directly within the chat interface, the average time to purchase from initial query, and, crucially, the cart abandonment rate, which should plummet. We’d also closely monitor the customer acquisition cost for this channel versus traditional search or social media ads.
Kohl’s and Target both saw ecommerce sales grow over 2% even as their overall net sales declined. What specific digital strategies are working for these retailers to outperform their physical stores, and could you provide a step-by-step example of a successful online initiative they’ve implemented?
This is a classic case of leveraging an existing physical footprint as a digital asset, and it’s a strategy these big-box retailers have refined into an art. While overall foot traffic might be down, they’re successfully converting their stores into hyper-efficient fulfillment centers. Their success hinges on omnichannel services like curbside pickup, buy-online-pickup-in-store, and ship-from-store. For instance, think of a busy parent who needs school supplies. They can open the Target app during their lunch break, add everything to their cart, and see that it’s all in stock at their local store. They tap “Order Pickup,” pay in the app, and a few hours later, they get a notification. They drive to the store, tap “I’m on my way” in the app, and an employee brings the order right out to their car. That entire journey removes the friction of walking the aisles and waiting in line, blending the immediacy of local retail with the convenience of e-commerce. It’s this seamless integration that’s driving that 2.4% online sales growth even when overall numbers are soft.
Gap Inc. credited part of its 3% sales growth to creator programs that generated 8 billion TikTok impressions. Beyond the impressions metric, how does Gap translate this massive social engagement into actual sales, and what does the typical customer journey look like from a TikTok view to purchase?
You’re right to look beyond the impressions; 8 billion is a massive number, but it’s what we call a “vanity metric” if it doesn’t lead to conversions. The key here is Gap’s strategic move to become a TikTok Shop. This transforms the platform from a simple marketing channel into a direct point of sale. The customer journey becomes incredibly fluid and impulsive. A Gen Z or millennial user is scrolling their “For You” page and sees a creator they trust styling a Gap logo hoodie in a really compelling way. Because Gap is on TikTok Shop, there’s a small shopping bag icon right on the video. The user can tap that icon, select their size and color from a pop-up window, and check out using their saved payment information, all without ever leaving the TikTok app. The distance between inspiration and transaction is reduced to just a couple of taps. This is how you turn 500 million views into actual revenue and why their influencer programs are performing so “incredibly well.”
Bath & Body Works reported a 1% dip in digital sales, stating meaningful improvements aren’t expected until the second half of 2026. What are the key pillars of this long-term digital transformation plan, and can you share an anecdote about the challenges retailers face with such timelines?
That 2026 timeline is a very transparent, and frankly realistic, admission of the mountain they have to climb. Their plan to “win the marketplace” is centered on a complete overhaul of their digital experience, focusing on discovery. This isn’t just about a prettier website; it’s a foundational rebuild of their app and mobile web platforms. It means investing in personalization engines, better search functionality, and a more integrated loyalty program to create what they call a “best-in-class experience.” I worked with a retailer a few years ago that underwent a similar platform migration, and it’s like trying to change the engine on a 747 while it’s in mid-flight. For over a year, they had to run their old, clunky system while simultaneously building the new one in the background. The data migration alone—millions of customer profiles and order histories—was a monumental task fraught with risk. This is the kind of “substantial work” they’re referring to. It’s a slow, expensive, and complex process, which is why they are wisely managing expectations by setting that 2026 goal.
La-Z-Boy is expanding the physical footprint for its Joybird brand, even as the brand’s online sales fell 10%. What is the strategic rationale behind this move, and what metrics suggest that investing in brick-and-mortar will successfully offset declining digital-native revenue for this brand?
On the surface, it seems completely counterintuitive, but it’s a very savvy move for a high-consideration product like furniture. A 10% drop in delivered sales is concerning for a digital-native brand, but La-Z-Boy understands that you can’t feel the texture of a sofa or test its comfort through a screen. The physical stores aren’t just points of sale; they are powerful marketing tools and experience centers that build trust and overcome the hesitation of a major online purchase. The key metric they’re watching is the “halo effect.” They’ll be analyzing online sales data in the zip codes surrounding a new store, and I’d bet they’re seeing a significant lift. They’re also likely tracking metrics like a higher average order value and conversion rate for customers who visit a store before ultimately buying online. When the CEO says they are “pleased with the ramp-up and performance” of these new stores, it tells me the data shows that a physical presence is a critical catalyst for digital sales, not a replacement for it.
What is your forecast for the future of AI in retail, especially as we see pioneers like Abercrombie moving into agentic commerce?
My forecast is that we’re on the cusp of AI moving from a behind-the-scenes operational tool—used for things like fraud detection or supply chain analytics, as TJX mentioned—to a primary, customer-facing interface. The agentic commerce model that Abercrombie is pioneering will become the new standard for reducing friction. We’ll see more shopping happen within conversational contexts, whether that’s through text, voice assistants, or new AI platforms. However, the true winners will be the brands that master a hybrid approach. AI will handle the transactional, data-driven aspects of retail with incredible efficiency, but the human element—creativity in merchandising, empathy in customer service, and the tactile experience of a physical store—will become an even more valuable differentiator. The future isn’t about robots replacing people; it’s about AI streamlining the mundane so that humans can focus on creating truly memorable brand experiences.
