Shelf Life | Vol. 31 – The Weather Outside Is… Fine?: Why Retail Needs a Cost Forecast for 2026
🗓️ December 2025 | ✍️ Jackie Swanson
Morning Report: Black Friday 2025 in a snapshot
This year’s Black Friday painted a picture that was steady, not spectacular. Across Adobe Analytics, Salesforce Shopping Index, NRF, and Mastercard SpendingPulse, the story was remarkably consistent:
🛍️ Sales grew a modest 2.5% to 3.2% YoY Online slightly outpaced stores📱 Mobile ruled the day Over 70% of online transactions originated on mobile thanks to comparison engines, app-only offers, and emerging shopping assistants. 💸 Conversion improved, but only with deeper discounts Sharper pricing, faster delivery promises, and AI-personalized bundles drove performance. 📉 Margins squeezed Discount depth widened almost universally, especially in apparel.
Highs & Lows: Where performance warmed up, and where it stayed cold
Bright Spots (summarized): 💄 Beauty + fragrance 🎮 Electronics, gaming, wearables 🏷️ Off-price & value 👟 Select footwear & athleisure
Soft Spots (summarized): 👗 Mid-tier apparel 🏠 Home categories 👜 Luxury soft goods outside of exclusives
Gusts of Change: The promotional patterns rewriting the season
Four winds shaped the 2025 promotional climate:
1. Earlier starts Black Friday began around Halloween. November has fully shifted into continuous promo mode.
2. Deeper discounts Apparel saw its steepest markdowns since 2020. Electronics and home followed suit.
3. Longer promotional windows Retailers spread deals across multi-week waves, sequencing categories to balance traffic and protect logistics.
4. Personalization driving results App-only prices, AI-curated bundles, and behavior-triggered offers outperformed mass messaging. Relevance beat timing every time.
The headline: Demand didn’t disappear. It just became more expensive to capture.
Humidity Rising: Margin pressure and the rising cost of doing business
The cost-to-serve is going up across the board: • deeper promotions • higher logistics and fulfillment volatility • tariff-driven COGS pressure • shorter, faster product cycles • sustained investment in AI and agentic systems
Retailers can’t enter 2026 with a cost structure designed for pre-AI, pre-personalization, pre-mobile dominance.
That’s why nearly every leadership team I’m speaking with is prioritizing a cost optimization reset. The conversation is not led with how to cut, but how to rebalance.
Your Umbrella: A practical cost-optimization playbook for 2026
This is the same framework I use with executive teams when we evaluate Q4 performance and 2026 investment plans.
1. Separate value from spend.
Fund what drives conversion, automation, customer impact, and AI enablement. Everything else is maintenance. This means rethinking things. What we thought was on auto pilot, now needs to be reassessed. This is a big concept that is often overlooked.
2. Remove duplicated tech and workflows.
Redundant content systems, analytics tools, and supply chain platforms often unlock double-digit savings instantly. Think goals and then design a process to achieve them. Don't get stuck on the now, capture the what-ifs.
3. Redesign teams for speed.
Agentic commerce requires fewer handoffs and tighter, cross-functional decision paths. Workflow simplification saves more than traditional cost cutting. AI truly means that ALL jobs should be assessed - not for elimination, but for working smarter.
4. Link every investment to margin protection.
If it doesn’t lower cost-to-serve, improve turns, increase forecast accuracy, or reduce rework, it’s discretionary.
5. Build flexible, modular capital plans.
2026 will move too quickly for rigid, multi-year commitments. Retailers need investment models that can flex with demand.
Extended Forecast: The next climate front for retail
The retailers who win 2026 won’t be the ones who cut deepest. They’ll be the ones who:
✨ simplify before they automate ✨ reallocate spend toward AI-driven capabilities ✨ build operating models that can move at machine-speed ✨ weatherproof their margins before the next storm hits
Cost optimization is strategic climate adaptation.
The Big Debate
What is your forecast for 2026? Where are you cutting and where are you investing?
More to come in the Shelf Life series. Follow me here for sharp takes on the trends shaping retail, fashion, and consumer product companies. Want to talk more about how Gartner Consulting can help your organization? Follow me on LinkedIn or @ShelfLifebyJKS on Instagram or reach out!
📍 Jackie Swanson is a Managing Partner at Gartner Consulting, specializing in retail, consumer products, and utilities. She advises companies on large-scale transformations spanning strategy, operations, and technology. Jackie lives in New York with her husband and their three children.
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