Dan Frommer on the New Consumer, Plus Tariff Shockwaves, Wayfair Wobbles, and Walmart's Digital Acceleration

**Michael LeBlanc** (0:07)
Welcome to Remarkable Retail Podcast, the only podcast hosted by two of the NRF's top retail voices. I'm Michael LeBlanc.

**Steve Dennis** (0:14)
And I'm Steve Dennis.

**Michael LeBlanc** (0:15)
Our guest on this episode live from the Narvar, a podcasting studio at the NRF Big Show, is Dan Frommer, creator and author of The New Consumer, a publication covering the intersection of technology and consumer brands. Before starting The New Consumer, Dan was editor in chief of Recode, Vox Media's tech and business news publication. And before that, he helped create Business Insider, number two employee, he's a veteran, veteran business journalist, a fantastic conversation. He's been covering this space for a while with eloquence and insight. And I have to say he's one of the sharpest knives in the drawer that we've talked to on this show. So stay tuned for that. After the interview with Dan, we'll be back with the Remarkable Story of the Week and what's on our radar screen. Now, Steve, you look like you got a bit of a tan, you look like you came back from warmer climes. I'm not talking Houston here either. What's been going on, where have you been?

**Steve Dennis** (1:05)
Oh, I just took a little break down to Costa Rica, which was my first time down there. And yeah, it was a lot of fun. I actually mostly managed not to do any work, but sometimes that damn computer is just staring at me saying, check your emails.

**Michael LeBlanc** (1:21)
All right, Lau, in other news.
Speaking of warmer climes, at least warmer of here, get ready for Shop Talk Las Vegas in March. The 10th anniversary show, a super fun opportunity for both of us. We're on the stage doing something called the Retail Rumble, which we'll unpack a little later. That's on the Tuesday. And we're looking forward to seeing on our friends and colleagues. Lots of stuff planned for this 10th anniversary of Shop Talk.

**Steve Dennis** (1:50)
Yeah, I've been at Shop Talk every year of those 10 years. So that's pretty fun. It's been a very interesting journey. So yeah, folks are going to be there. Let's make sure we catch up.

**Michael LeBlanc** (2:03)
All right. Let's turn our mind to the news of the week. Not too much of a struggle to come up with what the number one topic is. On Friday, SCOTUS came back, Supreme Court, the United States came back with a long-awaited ruling on the IEPA tariffs from the Trump government and said, you cannot, those are illegal. Now, my question to you is, because I'm sure everyone listening has caught up to the day's news, and the back and forth, and 10 became 15 Are retailers better off today with, because it feels like there's more uncertainty than the uncertainty we had Thursday last week. At least they knew what was happening. So take us through it. What's your perception of all this? I guess for the folks who haven't been keeping track of the details, particularly pertaining to retail, take us through the whole thing and give us your assessment of where we're at.

**Steve Dennis** (2:55)
Well, yeah, I'll get to your question in a second, but maybe just kind of review. And we've somehow managed to avoid talking in a lot of detail about tariffs for a little while, when we were kind of talking about it every week, which I think gets a little bit to your question, which is we were in a period of still a decent amount of volatility, but it seemed like things were getting a little bit more certain and more or less consumers and retailers seemed to be getting kind of used to the state of things. A couple of things I just want to mention before I get to the Supreme Court decision. One was last week, there were actually quite a lot of news pre-Supreme Court ruling about tariffs, and they related to some studies that were released that demonstrated or indicated that, in fact, it has been consumers and companies that are paying nearly all the tariffs. Now, anybody who knows anything about economics would probably read those reports and go, D'oh, obviously, but that has obviously not been the position of the administration. But there's also been some details about how much tariffs have gone up. The average company has seen tariffs go up about 3x. And as far as whether or not this tariff policy actually seems to be accomplishing its objectives, that looks highly questionable as well. The US trade deficit widened in December to one of the largest trade deficits in decades. Manufacturing jobs continued to be lost. And the Wall Street Journal had an article that said that even though many companies, certainly not all, we've talked about a bunch of situations where we've seen everything from like Ralph Lauren apparently being able to pass on most of the tariffs to companies like Walmart, who we'll talk about in a few minutes, trying to really not pass on as much to maintain market share. Anyway, the Wall Street Journal article indicated that from their conversations that more companies, not just retailers, are starting to say, look, we can't continue to have our profits taken. We're going to have to pass on more. So anyway, that was kind of a whole backdrop, which was basically tariff policy, really not having the results that the administration wanted, consumers paying the tariffs, contributing to inflation. But maybe we're going to see a little bit more of that going forward. And then boom, on Friday, as you mentioned, the Supreme Court decision found that the IPA tariffs were unconstitutional. Now, it's important to mention that these tariffs, the IPA tariffs, so-called IEPA tariffs, are not all the tariffs that are imposed. There are particular ones that have to do with a national emergency, as at least the Trump administration determined it. So I think it's roughly six, I've seen some different numbers, but 60 to 70% of the tariffs that are paid have been paid under this provision.