Midyear Momentum: Indie Retail's 2026 Fall Forecast
Every month, our analysts and coaches talk with hundreds of indie retailers like you while our AI engine in Retail ORBIT® analyzes millions of POS transactions in real time. Together, they build the trends and analysis we're sharing with you here.
Overall, the community posted an 8.1% median sales growth last month, but some verticals were up more than 50% while others slipped into the red. Here, Dane Cohen and Marc Weiss unpack why the gap between the winners and everyone else came down to a handful of decisions, and what those decisions mean for the rest of 2026. This is the conversation you need to hear.
What we covered in this session:
What's actually trending across indie retail right now, from rents to vendors to loyalty programs
Carrying first half momentum into the second half, making sure those increases turn into excess cash
What your POS is telling you and what it misses. Learn how discipline in your data is the work that delivers real results
Live Q&A : retailers brought questions and got answers specific to their store.
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Midyear 2026 Retail Forecast: A Conversation with Marc Weiss — Webinar Transcript
Dane Cohen: Okay, welcome back to Indie Insights Live, and I am thrilled this week because we are being joined by the one, the only, the founder, the CEO of Management One, Marc Weiss. Marc, how you doing today?
Marc Weiss: I'm doing well, thank you, Dane.
Dane Cohen: So, Marc, we have a lot to talk about. But before we jump in I just want to set some ground rules like we always do. The 1st is, and this is the biggest question we get. Of course we will be sending out the recording. You will get it in your email right after this session, and we are also going to be sending a very special report for you. So we're going to break down A lot of what happened in independent retail in June. And we are going to send you that report right after this, but you're going to get some live analysis here. And then there is the chat and the question and answer here for everyone that's joining live. Please interact. This is your time to talk with myself. to get some FaceTime and direct chatting with Marc Weiss. So please put your chats, questions, thoughts, concerns, put them right there in the chat, and we would love to talk to you. We'll take questions at the end, but I jump in throughout the whole recording, and I will bring anything to the table. So let's start out. Say, Hello, anybody in the that's in here right now. Say, Hello! Say where you're calling from, and we'll give you a little shout out to start the discussion. But, Marc. I am super excited to talk to you because, and I know you're my boss, so I kind of have to say this, but I mean it from the heart. There is no one that is more passionate about independent retail. And, you know, speaking with you about these topics, it just lights a fire, at least for me. And so I think that, you know, that same spirit will come through. We're gonna be talking, about June, and hopefully a lot of Q1 Q2. Now that we're halfway through the year. So, Marc, I'm going to get started with. We saw an 8.1 percent median sales increase across independent retail and across our client database. Give me the temperature that you're feeling right now out there in the market.
Marc Weiss: Well, thanks, Dane, and thanks for your kind words. You know, I feel like the business, you know, the customer has accepted inflation. And I think we're seeing the benefit of, you know, the customer absorbing, increased prices. And I think it's benefiting, overall independent retail in a very positive way. So no matter what we've thrown, no matter what's been thrown at the consumer since post COVID, it's been absorbed. So the appetite is there, the demand is there. I think independent retailers done a great job adjusting to circumstances. I think they've learned to be extremely flexible and agile in the way they run their businesses. And I think we're seeing great results because of it.
Dane Cohen: Yeah, and so, isn't it so interesting, because I feel like we've come to these pivotal moments, you know, in my 6 years here at Management One, right? We went through COVID, we went through tariffs, you know, we're going through gas prices right now, you know, and we've seen this inflation all across The years, and every time we come to one of these moments, we say. You know, the general public seems to say, this is the one that's gonna crash business through the ground, this is gonna be the one that really trips us up, and yet, the customers absorb the price.
Marc Weiss: Yeah, I think retailers, independent retailers have done a pretty good job absorbing the shock. Of all the news that happens in the economy. And, you know, for once, I mean, I think they've really done a super job just deflecting off of it and paying attention to their businesses. And we've always talked about control what you can control. And I think they're doing a great job of it. I think we're seeing it in the results that we're seeing. And they're using, you know, they're creating experiential retail. they're applying, relationships, they're… they're… they're competing as well as they've ever competed. You've also seen, a certain amount of… of… of… change in… in the competition as well. So, I think that that's, you know, they've been able to pick up and benefit from that as well, so I think that's a big plus.
Dane Cohen: Yeah. And and so now that we are, you know, half the year is down. If you could believe it, we're we're in Q3. We have Q4 ahead of us just around the corner. you know, one of the things that I've really seen, and if I had to kind of put a bow on the first 6 months of the year. I think that there's a lot of optimism out there, and I haven't seen that in a while. There really is just a spirit of positivity. What do you think, you know, besides the, you know, customers absorbing the price increase, what do you think is pushing the industry forward right now?
Marc Weiss: I think that, there's a positive feeling, because I think people really put their nose to the grindstone on… and focused on their businesses in a… in a way that, you know, they're… they're doing the things that make sense in their business. And I think they've adopted a lot of best practices. You know, necessity, they say, is the mother of invention.
Dane Cohen: Mmm.
Marc Weiss: I think independent retail has been, you know, a highlight. I mean, I think they're the poster child of reinventing themselves over the last four or five years. And I think they're reaping the benefits of all those things. There isn't any one thing, you know, there isn't one magic wand that changes business, but it's a summation of doing a lot of little things right. And I think the relationship our stores have with their customers, I think the relationship that the fact that they're focused on newness and being creative in their relationships has all done a lot. I mean, we had a, and I think you'll bring it up later, but I think it's a good example to bring up now. We did a webinar a couple of, about two months ago on lease negotiation. And, you know, from our, we'll talk about it later, from our client briefings, we've discovered that one out of six retailers are now negotiating with their vendors. I don't know if that came from us or came from them, but it's happening. So I think retailers are taking real action. And you don't go negotiate if you don't have a strong belief in your business. Maybe during Covid we negotiated out of fear that we weren't going to be there, which was true. You didn't. Nobody knew there was that. That uncertainty was. Was unbelievable. But today I think it's not generated from. fear and uncertainty, I think it's more generated from confidence and, you know, wanting to be profitable and wanting to turn every dollar we create into cash profit.
Dane Cohen: Yeah, by.
Marc Weiss: We can.
Dane Cohen: By the way, that was in, you know, this Indie Insights Live series has really been, in my opinion, a game changer. Something like that lease negotiation, the amount of feedback we got after that, and people that really went back, talked to their landlords, talked to their, you know, their teams, and really made a difference is pretty incredible.
Marc Weiss: Yeah, I mean, I would just continue to encourage people to take action on the things they do and realize that retail is the sum of doing a lot of little things right. Sure, when a vendor gets hot, you run it and it drives business and traffic and that's all a wonderful thing, but that's not what drives 8.1% increases across the board. I mean, that's amazing. And I think that it just explains that. don't try to outthink the market, and don't try to, just pay attention to your business, and… and focus on the things that are working, and build on those, and that's the real lesson, and I think that's what… that has to be what's happening.
Dane Cohen: Yeah, and I want to talk about benchmarking real quick because, you know, I think it's so important for everyone to put into perspective where the entire industry is at, right? And when we say industry, we're talking independent retail, vertical.
Marc Weiss: Yes.
Dane Cohen: which we'll get into specific verticals, but when you see that median increase at 8.1%, you're benchmarking yourself across the industry, and then we'll get more specific to the vertical by vertical. But I do want you to talk about, because I think this is pretty incredible. how we're getting this information, right? And I think that this is, at least for me, and, you know, being in it every day, seeing how you know, we at Management One have really been able to just be a powerhouse of independent retail intelligence. So, can you talk a little bit about why these numbers are so important?
Marc Weiss: Yeah, well, I wanna start by saying that, you know, I feel like I'm in the Disneyland of retail because all the things that I dreamed about being able to do in the 30 years, well, actually 40 years that I've been in this side of the business. We're able to actually accomplish now because of AI, so we're just, like, in a perfect storm, and I mean that in a good way. So, over the last year. We've been working hard to use AI as a tool to provide information to retailers so they have information on a daily basis to make decisions, unlike anything we've been able to do before. So I'm excited to be a part of that, and I'm excited for Management One to be, you know, showing leadership in this part of it. Because what you're going to see and what we're going to launch in the next few months is astonishing. It's staggering, really. And it's all about really giving retailers, the independent retail community, information at their fingertips to make quick decisions. So I'm very excited about that. And I even think these client briefings are just an example of where we're aggregating information in a way we couldn't do before. We're using AI so that we know what's on the minds of retailers. We know how they're responding. We know not just reacting, 'cause there's a difference between responding and reacting. You know, responding is really being thoughtful. Reacting is knee jerk and, you know, guessing. But we don't have to guess, right? We have information, we have a community that can support and help each other. And I think that's what's material. It's really different today than it was before because nobody has to live in a silo by themselves anymore. And you know, you have to break down the walls of, you know, there's always this, I think for, I grew up in an independent retail family, so secrecy and security and not sharing was part of our DNA 'cause we didn't want anybody to know what we were doing, but because we thought it gave us some competitive advantage. But I think the table's really turned. Today, information is widespread. Where you get it, how you get it is important. But getting it from the right source is going to be critical. AI in itself is a wonderful thing. I mean, who doesn't use it 14 times a day? It used to be Ask Google, now it's Ask Claude, right? I mean, I had a problem getting my, enabling my mobile hotspot. I got on Claude, gave me the exact instructions of what I needed to do. I did it at work. But that's for generic things. But when you're really talking about very specific things. You got to be, you know, that's where there's a certain amount of caution and that's where as Management One, we've been very thoughtful about how we use AI so that what we're producing using AI is meaningful, directional and correct and not open to hallucination or other things. instances or examples of where AI sounds good but isn't there. So I think what we're working hard to do is adapt it as a tool. These client briefings are a good example of that because we're collecting information from literally hundreds of meetings and we know what's on the minds of retailer. We can address what their concerns or issues, what their themes are and how they're thinking about the business. And to your point, it's fairly positive. So that, you know, we know for a fact that there's a lot of confidence and belief that I can be strong, I can be a good retailer, I can see success, I'm feeling it, I taste it, you know, I want to make it as profitable as I can for myself. So I think that shared wisdom in the community, which is what we're trying, working hard to build and develop, I think will benefit everybody.
Dane Cohen: Yeah, that, that, and you know, again, I just look at this as. when I was… I come from an independent retail family, and, you know, there were so many moments where it was just so hard to get information that was specific to independent retail. And so, you know, this is on a scale that I don't think we've seen before. But, okay, client briefing, June.
Marc Weiss: I just want to say one thing that I remember as a kid my dad had like five friends that were in the business in different cities so they weren't competing there was no e-commerce 50 years ago and he would have a Monday call with the five what what happened over the weekend what was working what wasn't working they shared a lot of information now we can do that at a grand scale and so what's working in Miami and what's working in in Grand Haven, Michigan, could be completely different, but where are they working? Where are the connections? What's similar? What's different? So there's nuance to everything, so it's playing that out and understanding it. And really, that's the beauty of independent retail, because you can curate that for your own audience.
Dane Cohen: Yeah. And and so we're gonna jump into the client briefing for June 2026. And you know, just to reiterate what Marc said. AI has been able to pull a tremendous amount of data for us. This is coming from the aggregate of all our clients across all our verticals. But it's also coming from anonymized data from our hundreds and hundreds of calls with retailers. So we're able to process that and understand what are the hot topics, what are on retailers, minds, and and what are they doing? What's working? And so that is how the client briefing for June 2026 is developed. And we're going to start. I see Brad from Tilted Quilters is on. He's a newbie to M1. Hey, Brad, good to see you on here. And so we're going to actually start with the quilt vertical. We saw a 50% increase in sales there. And I think you're going to see that when we talk, the theme of June was. hot items driving, you know, driving sales and really pushing businesses forward. So, what was going on in the quilt industry that we saw that rocket ship?
Marc Weiss: Well, I think it's not just what's going on in the quilt industry. I think the quilt industry is a good example of what can be done in all industries so we can learn from each other. You know, I came out of the women's market, but when I went into consulting, for example, I had to learn children's and toys and men's and luxury and everything else, and really editing what worked in different ones back into each individual vertical. You can learn from each other and gain from it. So, I think this was just a top vertical. I think some of it was driven by, the 250th anniversary. It generated a wave of quilting activity. Major fabric manufacturers released dedicated and commemorative collections, which I think helped. We're also seeing younger customers, including Gen Z and millennials. So I think there's a lot of good things that are happening within there. And I think what's really amazing about this is when you think, think about the sewing and quilt stores, what really drives a lot of their volume is sewing machines. And this isn't, these weren't, this wasn't sewing machines that drove business 'cause those are with three, four, 5,000 and even up purchases. But it was, you know. you know, it was everyday business, and I think there's a lot to be learned from that. So when people look at, and I mentioned this before, it's always great when a vendor gets hot, or a style gets hot, or something gets hot, but your underlying core business has to be strong, and what's good and healthy about the quilting business is that core underlying business is strong. Also, for a lot of our clients, you know, they've done a great job of cleaning up old inventory. We've gotten the idea of freshness in their minds. They're selling fresh, they're selling new. And I think that that's also opened up the door for growth. Plus, there's a lot of experiential work that goes into quilting stores. They have classes, they have a lot of things that They have a community that they build and support, who are very loyal and committed to each other. So I think in that sense, you know, you were seeing, you know, there's always two cultures going, there's always one, there's always one, trend that's happening and a counter trend that's happening. So on the one hand, we're talking about AI and technology and how people can sit alone at home and with Claude, but there's a counter trend too.
Dane Cohen: Tactile. People want to be tactile.
Marc Weiss: Yeah, people want to be with each other. And I think when you think about quilting and those kinds of communities, that's very tactile. So I think we're seeing, I'm seeing, I believe that that's a trend that's happening. So I would encourage other stores to think about how they create community within their stores. I know a lot of our stores have book groups and Dane, you talked to a lot of people who do a lot of things. So that tactile part of the business. Can really lead and drive tremendous benefit and rewards for you into the third and fourth quarter.
Dane Cohen: Yeah, and I'm gonna tell you something, the lesson that I think everyone can take away from the quilt, vertical. is that this is a industry that is, you know, historically, maybe known for being a certain type of customer, and they are expanding the pie right now, bringing Gen Z. You know, who would have thought right that Gen Z. Is now being brought in. And now there is this opportunity to really build a new customer base. And so this is where you got to be sharp. And I think this runs across you know any. You know, it's kind of like in a fashion store. When you know that generation, you know, ages out of your store, you know you're hoping to extend them, and then you need to bring the new generation in. This is where your marketing, your email follow ups, your systems have to be elite. And this is actually a great place where you can use AI, because you want to make sure you're hitting those new customers that came in. And And, again, you're building the pie, and I think that that's a great, you know, message to come out of the first half of this year, is that you know, sales are expanding, and the pie is expanding. So this is some really great stuff. Now we're gonna move on up…
Marc Weiss: I want to add on to that. I want to build on that and I want to build on something I talked about earlier. And that is, you know, in the fabric industry, for example, the closure of Joann Fabrics has sent both fabric shoppers, you know, looking for alternatives. But by the same token, you know, with all the… volatility with the Saks and the luxury market, that's really helped our high-end stores. So there's a real opportunity in marketplaces where the competition has exploded. So you really have opportunity to pick up new customers. And be the first alternative. And that's huge. Now it's a matter of once you get them, maintaining them, sustaining them, building them, making them a part of your ecosystem.
Dane Cohen: And by the way, this is a perfect example. of where AI and and really strategic planning differ. And so, you know, when we talk about the closure of Saks and Joann Fabrics and AI can't know that, right? So you need to respond in those moments. You need to capitalize in those moments. If you are not ready to receive new customers, to have the stock that you need to see business increasing and then chase goods, if you're relying on just, you know, kind of. generic you know, insights into your business. You're gonna miss those major opportunities. And we could see it right here.
Marc Weiss: Right. You know, I think that we, you know, we're only looking at our ecosystem of independent retail. So that's different than if you use generic AI, it's going to look at what what's written about, Walmart and Target and the big boys and their businesses are different than ours. They are they're the way they drive business, their customer profile. There might be some there might be some overlap. But for independent retail, it's a different world. And you know, the way things trend, we often run opposite or different than how the big chains do. So having that information that we're building is a completely different environment, a completely different ecosystem. And I want to mention this too, for those of you, because I think everybody's always worried and thinking about security. We've gone to great lengths to make sure that our information and data doesn't leak out into the ecosystem. Our AI is protected. It doesn't go out. You mentioned it's anonymized. It's all anonymized. So, you know, when you're sharing information with us. We're not sharing it with others. It stays private to you. So I wanted to be very clear about that. And we go to great lengths to make sure that we ensure that.
Dane Cohen: Yeah, and by the way, I don't even think that this is, you know, obviously, you know, Marc and I are going to come from the perspective of M1, but like I said, you know, it used to be very hard, you know, I would have this subscription to WWD, and, you know, you'd read all the kind of you know, some of the blogs out there, the retail brews, and it's just very hard to get a clear picture of what's happening in independent retail. So, you know, we're gonna jump into some what's hot, because I think that these are some really cool areas. We know that the plush trend exploded, squishies, neato. that really drove the toy industry. So that was very cool to see. And then so this is really interesting, right? We saw these huge increases. And if anyone here, this is, you know, some event based. If you've seen it. Permanent jewelry. Permanent jewelry. I don't know if you've… Marc, I don't know if you've seen it. I used to have one on my… They're doing live… live fitting of jewelry right in the stores. They have a machine, it clasps on permanently, and so it becomes this viral moment in the store. So, you know, that's great to see. And then, I want to talk about something big here. The cooling of Birkenstocks. And it's something that I'm hearing from retailer after retailer after retailer, and now it's played out in the numbers. So, we see Birkenstock, UGG, even HOKA, Showing weak signs and slowing down.
Marc Weiss: Yeah, so it's still holding up in core footwear stores, but for those stores that carried it as an add-on or an extra department, it's really cool that it's Jets, right?
Dane Cohen: Yeah, and…
Marc Weiss: Go ahead, Brian.
Dane Cohen: No, I was going to say this is, you know, to have that foresight, you know, that's definitely something that came through on, you know, our look back on June. So I think that's an important thing to note.
Marc Weiss: Well, if you If you look at all the verticals, the one that hurt the most was footwear. So I think that they're going to go through a transitionary period right now. You know, the great thing about Hoka and On was it sold quickly, it had a fast rotation, you know, you'd be out of stock faster than you could get it back in. Not the kind of margins that existed in some of the other footwear styles and other vendors. So I think, you know, footwear has an opportunity here to reinvent itself. And I think that's a good thing because there's other vendors out there that are strong, that are good, that can deliver results. So again, if you live by one, you'll die by one. But if you live by looking for what's new and what's different. And moving with your customer and picking up on it quickly, you have a real opportunity because we're gonna go into a new cycle.
Dane Cohen: Yeah, and listen, you have two options. You could freak out that a brand is slowing down, or you could go out there and find some newness, right? And that, to me, is exciting. All right, what was the most over-inventoried category of June?
Marc Weiss: You tell me.
Dane Cohen: Dresses.
Marc Weiss: Right, right, dresses, right.
Dane Cohen: Dresses. And again, I always think, and let's talk a little bit of fashion here, some of our apparel retailers. I think there's two trends that were very surprising to see, although maybe not so surprising, and that is some volatility in dresses. And volatility in denim.
Marc Weiss: Yeah, well, let's talk about dresses first because we actually identified that a couple of months ago when we started, I think we released the first client briefing in March and we already saw softness in dresses and we said at the time that customers are moving to sets and both dressy and classic and casual. So whether it was dressier outfits, whether it was athleisure wear and sets, but this desire for Component dressing was really starting to stir in the marketplace. It's actually been happening for over a year, probably started happening with athleisure during COVID, but it's morphed and it's evolved and it's changed and it's grown. So we already started to see dollars shift into March and April. It was harder for us to track. some stores were good about setting up new classes, and I would encourage you, when you see shifts in the marketplace, you know, create new classifications, think about it different, be nimble, be agile, Or find ways of tracking it and then, you know, explode on it, take advantage of it. So I think the people who saw this transition happening and acted on it didn't get caught with a lot of excess inventory and dresses. People who bought according to last year probably did. But again, we're constantly re-forecasting and re-trending based on where we see the market moving. I think we were early adopters in seeing the market move, and we would encourage people to be open to those kinds of changes. These kinds of shifts they don't happen every season. They happen over time, but when it happens in your particular vertical, you've got to be sensitive to it, aware of it, pay attention to it, and that's where current trending is, you know, really, trumps, history in a big way, and you've got to be very sensitive to that. Customers always looking for fresh, new, and different, and I think we're in that, you know, that space right now.
Dane Cohen: Yeah, and again, seeing that trend happen is right. We called it out in March, and now it's coming to fruition in July, when now we're going to see a ton of clearance for the people that didn't respond in that dress category.
Marc Weiss: Well, and the worst part of it is they're stuck with having to clear out goods, cancel orders, they're afraid of it. You still can't be afraid of dresses. It's still part of the business, but it's going to be a different part of the business, and you have to look at the business differently because, you know. There's always this conversation, brands versus vendors. I mean, brands and vendors versus classifications. They're both important, but class is how people think, right? If they're thinking about dresses, maybe there's a hot brand, maybe there isn't, maybe it's a consortium of brands. But, you know, when you think about classes, if they're thinking about components, that's different than thinking about dresses. This is a really good example of why looking at your classification structure is so important. And your classification structure doesn't have to always be written in granite. It can be agile and flexible to the demands of changes in the marketplace.
Dane Cohen: And, you know, as someone who's been in the business for quite some time, there's always this ebb and flow of denim versus other types of bottoms. It was, you're right, it was leggings, right? And leggings crushed the denim business, right? You just saw everybody wearing leggings. You know what it is now? Everyone is wearing fashion pants. The wider, the bigger, the balloonier fashion pants have just exploded. So, you know, you always have that ebb and flow in denim. And so this is gives you the opportunity to actually look and take a real hard look at what your denim assortment is, because what's still doing well in denim is there's that barrel. barrel pant, the barrel denim, which is continues to explode. So if you're still out there and your assortment is all skinny jeans, listen, of course, it's going to depend on region to region. But what we're seeing is it's driven by the barrel gene. So that is what people are responding to. And then there's this pant trend right now that's happening. So, you know, we're talking about a very specific segment. But this applies across the board when you're looking at ebbs and flows in in categories.
Marc Weiss: Right. And in denim, it's really always about buying the fit because that's ultimately what sells. So, you know, if you've got a vendor that fits your customer, that's important to know and understand and be deep in the fit first. And, everything else, everything good will happen from there, but don't be over-assorted in denim. And always be willing to try a new look, test it, see what works, and then if it works, go for it.
Dane Cohen: Yeah, and that oversorting, and this is something that we repeat again and again, especially when I'm on the road. The number one reason that you know the number one reason why stores get overbought is because they're over assorted. So this is a real time to really look at your vendors in a certain category and really start to, you know, have some hard decisions. And just because a vendor has been there for a few years, a bunch of years, you love the rep. That doesn't mean that they are right for your business in this moment. Fun fact, I just want to give a little fun, shout-out to the following. E-bikes. E-bikes are seeing a big moment. Incense and crystals. The metaphysical stores are seeing a big moment right now. And also, and I know this just from anecdotal, my two huskies, freeze-dried and frozen pet food, you know, that is a huge, that, you know, kind of no more kibble. We're really seeing this huge increase in frozen and freeze-dried pet food. So just some interesting notes there. Okay, Marc, I want to switch gears a little bit. And, you know, we talked a little inflation, and what we're really seeing work right now, and I love the way that you phrase this, the quiet price increase. What do we mean by the quiet price increase?
Marc Weiss: So I'm going to explain that in a different way, Dane. So if you give me a moment to talk about it.
Dane Cohen: You got the floor.
Marc Weiss: Having been in the business for over 40 years, I've been through a lot of life cycles with a lot of retailers and, you know, many who've retired and closed their businesses and, you know, moved on over the years. And in each and every case, we'd always plan for the retirement sale and goods would come in for the season and I'd say, you know, take an extra five or 10 points. You know, because we want to get that margin bill for when you go on sale and have the final closeout. There'd always be this period of time between when goods would land and the sale would happen, and the sale would happen towards the middle, towards the end of the period or the season. And A hundred, and I can say this unequivocally, a hundred percent of the time, retailers always came back and said, if I knew I could have gotten another five or 10 points, I would have done it a long time ago. And then they'd figure out all the money they lost over the course of the years. So that's what we really mean about quiet, you know, take that extra margin. So what, going back to these clearance, you know, the retirement sales. So what would happen is while they were still in the regular price selling period, they recognized that the stuff that they were taking a higher mark on was selling at the same velocity. There was no pushback from the customer on price. So, you know, it was looking in the mirror and saying, "Oh my gosh, what have I missed over all these years?" So I think that now because, you know, expenses are going up, you know, the margins that we worked with before, you know, need to be inflated a little bit. That's why we're seeing a big move towards private label. But even in branded goods where you can get an initial markup. If it's a little bit higher, that all adds up at the end of the season, cushions you for markdowns later on, but also raises the price. And, you know, it was part of the reason I believe that we're seeing increases the way we're seeing it.
Dane Cohen: Yeah, and you could see it just in this simple fact, right? Sometimes you see these run in inverse, but we actually saw an increase in luxury retail and an increase in fast fashion.
Marc Weiss: Right.
Dane Cohen: And I think a big part of that is you're seeing, and again, and this is, you know, time and time again, you used that great retirement sales story. But fast fashion retailers are very resistant to increasing prices, right? They think that if And I have these conversations over and over. If you're selling it for $23, you could probably sell it for $27. And they're very resistant to those price increases. But the inflation forced them to kind of increase. Private label is forcing them to think about margin differently and building those prices into it. And guess what? It worked, right? So you see luxury. You know, going up, the people that have money, they're spending money, but you also see a willingness for fast fashion retailers to increase pricing, which is leading to that increase in sales, so a great lesson there.
Marc Weiss: Well, they've had increased prices because their costs are up. I mean, they're, you know, their costs that they're paying, their wholesale prices are up. But I would also encourage those, clients that are in fast fashion to, you know, bring in some branded goods. Now's the time to try them and test them. Because, you know, price resistance isn't there. But just differentiate yourself from the marketplace. Don't copy what you're doing, but do something different. Where there's value, I mean, you know, if you want to bring a brand in, now's the time to do it. And, you know, it'll enhance you, it'll… it'll give you a competitive advantage, it allows you to differentiate yourself in the market, so I think there's that opportunity to do that. You know, the way you develop your merchandising strategy has always got to be ongoing and evolutionary.
Dane Cohen: Yeah. And okay, so now let's look at the flip side of that. And hindsight is 2020. But you know, we just had this, you know, huge July 4th, 250 years, a huge moment. A lot of retailers capitalized on that and used it to move product. So you know, this sometimes seems like a binary right where, okay, we're increasing prices. We're seeing it there. and, you know, people then get afraid of clearance, but I think that you saw that that 250, that July 4th, is a huge vehicle to move those old goods.
Marc Weiss: Yeah. Well, I mean, I think, you know, we have fall, you know, unless you're a seasonal summer store, right? And your business is just peaking over July 4th and you're going to be regular price through towards the end of the season. Aside from those, those, that group of that cohort of retailers, the rest of us who are moving into fall quickly, remember fall starts to land now through the end of July. So you want to cash out of your Spring and summer, the inventory transition, whether you're going to transition or fall, you want to be doing that and cashing out of what you own and turning it into cash to pay for new goods is critical. But also be thoughtful that as you're selling those, it's an opportunity to talk to your salespeople. If they're buying a sale, try to also include some new fresh goods in there to raise the margin on each one. And also, as you're going after sale, you know, look at your, you know, most of you have POS systems. Look at your clients who are who you sell at a margin of 20 to 40%. Those are, you know, the bottom feeders market specifically to them. And maybe keep your high margin customers out of the sale loop, or maybe you want to reward them, but, think about how you market that because. You know, Dane, you've talked about this often, you know, there's a group of customers who help you clean up your store, and that's not a bad thing.
Dane Cohen: You know what? It's the circle of life. It's the food chain of retail. It's the ecosystem. There are customers that only want to pay full price. They view it as a sense of pride. They want the new, they want the best. And then you're going to have your customers that are going to be your sale customers, and both are important. You know, why, why clearance is so important now? You know, in my opinion, and you know, listen, this is something that we preach all the time. We're at the end of summer. We want to get those goods out before the transition to fall. But why it's so important now is because we're seeing this explosion of certain products and product categories. And if you don't have that money to buy back into the areas that are exploding, right? If a vendor opens up stock and they have, you know, ATS in the styles or the you know, the the type of product that you're looking for, and you don't have the cash to pay for it. You know. That's why it's more important this year than I've seen in a while.
Marc Weiss: Yeah, I mean, I think clearing out old stock is, you know, the sooner you do it, the better. You know, and again, everybody's seasonally adjusted. So I get it if you're in a seasonal store on the coast and you know, you're riding high and this is your season, you don't wanna be running sales except maybe picking out some things that aren't working, being thoughtful about that. But for the most of us, you really wanna be moving into the next season.
Dane Cohen: All right, so Marc, we got a question from Brad, Brad from Tilted Quilters, new client to Management One. What are your thoughts on adding an extra fee for using credit cards? It frustrates me to no end. I feel like I'm being punished for using a credit card when that is the main way to pay these days. What do you say, Marc?
Marc Weiss: That's a tough question. I think that you're probably better off building it in your markup, and not, you know, you know, punishing the customer for the charge.
Dane Cohen: Yeah, and I think that that, you know, that is key here, right? See where you can build in that 3% increase into certain product. There are going to be areas you can't because they're competitive product and people are price shopping. There are going to be products that you can build it in there. I think when you slap on that 3% and you make it very visible, that's when you start getting into, you know, that's a customer service issue.
Marc Weiss: Yeah, I mean, I think what happens is, no matter how you want to justify it in your own mind, the customer doesn't, because You know, they think, you know, they think what you spend, what you charge $100 for, you're paying $10 for. I mean, that's what they think. So I think it's a hard thing to sell. I mean, I know it happens in restaurants and in other places they get away with it, but I think in retail it's just a really difficult thing to do.
Dane Cohen: By the way, Marc, what is going on in restaurants? I feel like every time I go out to dinner, there's a new fee added, a water fee, a service fee, a chair fee, a napkin.
Marc Weiss: Yeah, here, tip the cook.
Dane Cohen: Different if you can.
Marc Weiss: So I think that let them play in that world. Brad, I would do a break even, and you know, your credit card costs are gonna be like, you know, 2 to 3%. You know, work with your bank, join an association that gets… That gets, you know, it's a negotiated better fees, but, you know, playing that game with the customers is… It's, you know, you want to win customers over, find other ways to delight them, but don't get into a fight with them over that.
Dane Cohen: Okay, I want to talk gift and home. Okay, because this was an interesting one. I'm going to put you on the spot again, Marc. Do you know what drove the increases in gift and home?
Marc Weiss: I'm waiting for you to tell me, Dane. Ding.
Dane Cohen: events. Events. Wow. Yeah. It was all, you know, a great amount of it was event-driven, and again, this is just showing you that I think this is the story coming out of June, is these focused, hot, hot, hot, red-hot areas. Do you know what the leading event was?
Marc Weiss: I had no idea.
Dane Cohen: Mahjong.
Marc Weiss: Mahjong, oh.
Dane Cohen: Right? And then, this goes right back to the, you know, when we were talking about quilt and sew. Who would have thought that 30-year-olds, 20-year-olds are going in and buying Mahjong sets? I mean, in your lifetime, did you think that you would see that?
Marc Weiss: No, I mean, I remember we used to play another tile game when I was in my 30s. I can't even remember the name of it, but it was a takeoff on Mahjong. So no, I mean, you mentioned it before, tactile, so there you go.
Dane Cohen: And people are doing events in the store, Mahjong nights, game nights. You know, and again, you know. This is why you could see it in different areas and why I would encourage you, even if we're talking about quilt, even if we're talking about gift in home, you really got to think about how you could apply this to your business. But it's the events, it's increasing the pie to a new generation. It's that tactile, people wanting to touch and not just be behind an AI screen all day. And that community aspect. So I would really encourage, you know, any vertical that we're talking about, really try to, you know, see how you could apply this to your business.
Marc Weiss: Well, but even in the luxury vertical, made-to-measure and special order and trunk shows are still strong, because people want to show up for events.
Dane Cohen: trunk shows drove a lot of business in luxury, so that's another area. You know, again, it's very thematic, what's going on, and this is why, right, and this is why sharing information, because it is… When something happens, it is not just happening rarely isolated to a very specific corner of independent retail, you know. There's always gonna be, you know, certain blips that are very specific to a certain type of store, but these trends run through independent retail in the community. Okay, you wanna hear a fun one?
Marc Weiss: Yes, I did.
Dane Cohen: A $200 local newspaper ad outperformed digital placements. And so, I think that this is a real interesting one, that when we're, looking at, you know, we looked at a lot of marketing data from the year, and we understand… and by the way, outperformed, meaning there was a bigger ROI, You know, because the cost of acquiring a customer is just growing and growing, and there's been a shift back to, and again, the tactile theme of this conversation.
Marc Weiss: Yeah, I mean, if you're, you know, if you, if you're, if you can do it, I mean, if you're a large enough retailer where you've got vendors that'll work with you and support you, you know, go back to building your own catalog and get the vendors to support the whole thing. I mean, it's for a little larger size retailer, but if you are, do it or do joint publications. I think people. People love, you know, love looking through catalogs. I mean, I think we've seen an increase in the catalogs we receive at home, and they're not… They're not inexpensive to send out, so they must be working. And I think that, you know, when, and I said it before, there's always a trend and a counter trend. I mean, we've, we've done for the stores that have done well and they'll on live selling, you'll continue to do well. It's still an important, you know, piece of the puzzle. A lot of you have seen spectacular growth through that. through that, that vehicle. But that doesn't mean that, you know, old fashioned, digital, digital is a thing and digital is a trend. And, I think that there's an opportunity to, to, you know, be in front of a customer in a new way. So I think that's a good thing.
Dane Cohen: Yeah, okay, we got another, yeah, that's another interesting…
Marc Weiss: to.
Dane Cohen: Say that again?
Marc Weiss: That $200 newspaper ad blew my mind too.
Dane Cohen: Isn't that crazy? And even mailers, right? Mailers, catalogs. And again, I think it this theme of tactile. So consignment. consignment has been a mixed bag here. We're seeing growth there, right? There's a lot of growth in the consignment business, and it's kind of now moving into stores that you wouldn't normally expect to have consignment goods. But it's been a mixed bag. Can you talk a little bit about how it's been messing with margins and cost of goods?
Marc Weiss: Yeah, I mean, I think, you know, the allure of consignment is always good, but there's a couple of things to keep in mind. Free isn't always free. So if you're getting consignment, it may not be the best product, but it might be. But be careful you're not competing with the stuff that you're buying. And that's the lesson there. Because if you sell a consignment good and you've also bought something similar from a vendor, you still owe that purchase order, you still owe for that. And now you've sold a consignment good. So you've gotten, it's not a positive win for you. It's a negative because you're going to probably have to mark down that other item. So think about consignment differently. I mean, it can be a positive if you're bringing in goods that you're not buying from vendors or you're opening up a new category or new classification, and you can do it on consignment rather than, you know, having to buy the goods, upfront. I think that's a positive way. So. Consignment is a strategic decision. Think about it, but make sure you're not competing with yourself when you get involved with consignment.
Dane Cohen: Yeah, and one of the areas where this really worked was fast fashion businesses bringing in consignment luxury goods, right? And so, you know, that's an example. You're not competing with your own product, right? Right. So that was a great way.
Marc Weiss: Well, a lot of luxury stores, a lot of their jewelry is consignment, and that's fine So, I mean, you could carry hundreds of thousands of dollars worth of jewelry and, you know, not have to pay for it till you sell it, and then do trunk shows with them and events. So there's a place for consignment. It certainly can be part of your merchandising mix, but just be thoughtful about it when you put it, and just be super careful you're not competing with what you're already buying.
Dane Cohen: Okay? And you know, Marc, we're we're coming up to the end of our our conversation. We have, you know, we have a solid 10 min left. So I just want to open it up to You know, people watching live right now, please, you know, this is your chance, put your questions right in the chat, we'll get to them live. right here. I see we may have one in our Q&A. Okay, here we go. How can you handle granularity through attribute tags without reclassing or without using hierarchical classification in general? Well, this is an anonymous attendee, but we will. I will kind of answer this and and kick this off. That is very dependent on how what point of sale you're you're using. But, Marc, I think you can speak to the incredible… you know, we just launched it with Shopify, and that has changed the game in terms of our ability to bring in SKU-level data, and we're going to be launching that with a few new point-of-sale systems, so can you just talk a little bit about the importance of bringing in that SKU-level data? I think that will answer this question.
Marc Weiss: Yeah, so hierarchies are important. So what happens at the class level? The, you know, what sells by class, by brand, and then down to the granularity of the SKU, the style, the color, the size even, because with, you know, with the weight loss drugs, I mean, sizing has become a big deal, right? So, you know, the size scales you may have used previously aren't necessarily the size scales you'd want to use today. So I think they're all important. So I think the attributes. In color, brand, SKU, style are all important, which is why we're ingesting data from all the major point of sale systems, because it's not just, you know, how do you take this, you know, how do I take a hundred, you know, let's say $50,000 in open to buy, and how do I break it down by brand, by vendor, by style, by SKU, by size, those assortments are critical and important. keeping track of that is going to be part of the future. We're all over it, and we're going to be providing… When I talked about giving you information that's ready, that's what we're working towards and what we're launching in the next couple of weeks, really.
Dane Cohen: Yeah, and I do wanna… I'm not sure if this, and you could write in if we're talking about Shopify or not, but there is a reason why it's very hard to look at attribute tags for, classification, and that is because they can change and they could double, right? So you could have multiple attribution tags for one item or one SKU, and so there is a method to our madness of why product type is the most sound place, because it is Unchanging and that will actually be able to track. to SKU by its classification.
Marc Weiss: Right, I mean, I think, but that goes back to discipline. And I wanna talk a little bit about discipline. when, you know, when you make mistakes on, putting the right attribute or the right class to a, to a purchase, that impacts, you know, you're not reading what the… think about it this way, I'm gonna rephrase this. Every time the customer makes a purchase, they make a vote. That was something I learned from Dennis Levine, who was really the one that got me started in, you know, developing planning for consultants. He was actually our first one. And one thing that Dennis always used to say is, every time a customer buys something, they vote. Well, if you don't tag that correctly, you can't read the demand correctly. That's how important The discipline is required to make sure that you're monitoring what the customers are telling you. Your and our ability to read that demand is critical to your future. It picks up trends. It picks up where the business is going. It allows you to where to reinvest your dollars. So discipline is a key. piece of the puzzle for the third and fourth quarter. So if you're sloppy in your operational work, it's not going to be a friend to you in trying to solve future questions and decisions you have to make about the business. So discipline is a critical piece of your success right now. And the time you take to invest to do it right, enter those purchase orders. do them correctly, receive them correctly, is super important. It pays you dividends. It actually creates profit. I know the time seems… Difficult and challenging at times, but your future success and your ability to create profit is really depending on being. by employing best practices. I can't be more emphatic about how important that is.
Dane Cohen: Yeah, and people tend to, when sales are good, best practices start to slip, right? And so. This is a really crucial time as we're seeing this, you know, fantastic. you know, optimism and kind of sales growth, we also want to make sure that that's not, you know, that best practices are not falling by the wayside. So, Marc, I do want to shift in these last… these final minutes, and I do want to talk about the future, right? So, we got a lot of information about Where we're at, where we've been, what are you, what's your, you know, we can talk data, or we can talk, you know, your gut feel on where we're moving to in the second half of the year.
Marc Weiss: Well, you know, I'm cautiously… I mean, cautiously optimistic is a, you know, phrase a lot of people like to use, but I would say that, you know, we've been through a lot together, and I think that there's a reason to be optimistic. I know that there's a concern about, you know. interest rates going up because of inflation. I think that could be expected. I can't read the tea leaves on that kind of stuff, but the fact is we've absorbed the shock. And, you know, I think that the customers are going to be very open and continue to be receptive. to you, to what you do, to what you provide. You just have to be on top of your game, and be thoughtful about it, and use all the tools that you can to stay ahead. But I'm very optimistic about where we're going You know, from an independent retail standpoint, I think it's a good time for us. I think we offer a lot to the community that they can't get anywhere else. And I think that, you know, you've positioned yourselves in locations that work. A lot of you have very good e-commerce or digital sites where customers can see you and understand you. I think you tell your stories well. Remember. This is really a storytelling business. And the way that you think and are creative about how you tell your story is very important and stay fresh with that. And you do that through new vendors. You do that through, you know, delivery of new fashion. I mean, one great thing about this business is there's always a new story to tell. There's always something to get excited about to hype. So make sure your people are included in that. that they know your story so you're consistent in the message that you give to your audience. And broadcasting that consistently and well only gives you tremendous returns. And be excited about it because customer trusts you, they believe in you, they want to believe in you, they want to be in a place that's authentic and real in a world that they don't see that way. So you have an opportunity to serve that purpose, and that's a wonderful thing that you get to do. You can go to bed at night actually feeling that you've… you've given to your community. And every… In every, you know. crisis that I've been involved with in retail in my life, outside crises. And every single time, where has the customer gone? They've gone back to you. When 9/11 hit, everybody was glued to their TVs, you know, during that whole episode. But two to three weeks later, at the end of September, early October, it was like Christmas time in our stores because where did customers wanted to be? They wanted to be in stores with their friends, with the community they knew and they trusted. That is our legacy. That is what makes independent retail strong. When COVID ended. We saw everybody, the conventional wisdom was everybody learned to shop online and through Amazon. But what happened when the shutdowns ended? They ran back to the stores with reckless abandon. It was like the roaring 20s. So why shouldn't we be optimistic about our future?
Dane Cohen: By the way, it quite literally was the Roaring Twenties.
Marc Weiss: Yeah, it was.
Dane Cohen: The, the return of the roaring twenties. Well, Marc, this was a great conversation and, and we're gonna send out the June client briefing, but you know, I would really encourage, sit down with this, take a look through it. This is so crucial, I think this benchmarking aspect. Moving forward into the future is really critical for retailers to understand. You know, the full totality of the independent world, and again, and I just want to emphasize this, because I hope that this is a big takeaway. What happens in one part of independent retail? Influences the other parts of impression. in independent retail. So, you know, I just got back from Whizbang, the Retail Success Summit. I know some of you guys were there, and you know this is the sharing of ideas. It's not only about if I'm a menswear guy, I'm a menswear guy, and this is what's happening in menswear. If I'm a kitchen store, I'm a kitchen store, and this is what's happening in kitchen stores. There are themes and you know, trends and higher-level thinking that runs through all of this. And this is what we're doing with Indie Insights, so it's great to see it happening.
Marc Weiss: Well, thanks for hosting the podcast, and by the way, Dane has a series of podcasts with Josh Order that are great, lots of great tidbits and insights, and we're going to have weekly podcasts and in-depth webinars for all of you, so stay tuned, there's more great stuff coming. Thank you all.
Dane Cohen: Thanks, guys.
Marc Weiss: Yep.
Dane Cohen: We'll see you on the next Indie Insights Live.