Survival of the Focused - The Middling Middle, Luxury Lethargy, and Lightning Rods

In this retail heat map episode, Carol Spieckerman connects the dots between retail's biggest retail stories - from Saks' spectacular bankruptcy to Victoria's Secret's Valentine's Day gamble to Target's latest controversy magnet moment. Through her recent media contributions and sharp analysis, Carol reveals how these seemingly disparate stories all point to one crucial truth: in today's retail landscape, you either know exactly who you are and execute flawlessly, or you get tossed into the industry's sorting machine. Plus, Carol shares a deeply personal story that demonstrates what authentic customer experience actually looks like.

Key Takeaways

• Model mortality hits luxury retail hard – Carol breaks down why Saks' $2.7 billion Neiman Marcus acquisition became "an over-aggressive, over-leveraged boondoggle" and why being "luxury" isn't enough when brands control their own distribution. 
• The psychology of perpetual promotions and "fake" discounts – From her recent media interviews, Carol explores how retailers created discount-dependent customers and why "terminal uniqueness" of private brands makes policing fake sales nearly impossible. Companies like Apple and Costco avoid this trap by building differentiated value propositions that don't require constant sales theater.
• Victoria's Secret's calculated Valentine's Day bet – After admitting they "didn't buy Valentine's Day big enough" last year, VS is stocking up heavily for 2026. Carol explains why this bold strategy makes sense given their self-branded flexibility, adjacent category expansion into beauty, and the GLP-1 medication tailwind creating intimates wardrobe refresh opportunities.
• Target becomes retail's new lightning rod – Carol observes how Target has essentially traded places with Walmart as the industry's favorite punching bag, stemming from previous indecisiveness on social justice issues. The latest immigration controversy in Minneapolis shows how struggling retailers can become magnets for every headline, retail-related or not.
• Real personalization vs. algorithmic theater – Through a deeply moving personal story about losing two senior rescue dogs and Chewy's extraordinary response, Carol shares what authentic customer experience looks like: "True personalization recognizes the context of someone's life, not just their purchase history."

Carol identifies three fundamental patterns shaping retail's future: model mortality (traditional concepts like luxury department stores dying regardless of prestige), survival of the focused (companies with clear identity and operational excellence thriving while fence-sitters struggle), and the superiority of operational fundamentals over marketing theatrics. The industry is undergoing a massive sorting process where platform players like Walmart and Amazon can weather any storm while companies stuck in the "middling middle" fight battles on multiple fronts. Her personal Chewy story perfectly illustrates the difference between genuine customer care and the discount theater most retailers mistake for personalization, ending with a heartfelt call to consider senior dog adoption.

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Transcript

Welcome to another retail Heat Map episode where we connect the dots between the retail stories that have been grabbing headlines and generating buzz, but more importantly, we'll talk about what they reveal about where things are going next. Over the past few weeks, I've been chatting with media outlets around the globe about everything from bankruptcies to the latest brand glow-ups and blow-ups.

Clearly, the old models are dying spectacular deaths while those new strategies are being stress tested in real time. And I have to keep talking about Target they're dealing with yet another controversy that has nothing to do with traditional retail, but everything to do with consumer perception.

Let's dive into the heat map and see what these stories tell us about retail survival strategies in 2026. And let's start with the big one, Saks filing for bankruptcy. This isn't just another retailer going under, it's the death rattle of a retail model that once ruled the fashion world. I know because I lived it firsthand.

The wholesale model's been dying for years as brands pivot to direct-to-consumer and open their own stores. Well, maybe "dying" isn't quite the right word because, as you've heard me say a million times, diversify or die is retail's new rule. So, plenty of brands are actually dipping back into wholesale to balance their portfolios. But the days of brands putting all their eggs in someone else's basket and following a pure wholesale model are mostly over.

And when you're no longer the primary distribution channel for those brands, you lose a lot of leverage and Saks has lost it spectacularly. But the real kicker? Saks moved to 90-day payment terms, then stopped paying suppliers altogether. I mean, what did they expect? The creditor list tells a brutal story.

They owe Chanel $136 million LVMH $26 million. But despite these big numbers, these luxury giants will survive. But what about those smaller brands that are caught in this mess, the ones that aren't as diversified? It's not such great news for them. I've seen this rodeo many, many times over my retail career, so it's nothing new, but that's part of the problem.

History's repeating itself because the old models just aren't sustainable, and they're not evolving fast enough. Saks $2.7 billion Neiman Marcus acquisition was supposed to create an upscale fashion powerhouse. It was yet another safety-in-numbers portfolio-building play. But instead, it evolved into an overly aggressive, over-leveraged boondoggle that saddled the company with crushing debt just as luxury spending was cooling.

Timing is everything in retail, and buying a struggling competitor doesn't make you stronger. It makes you twice as vulnerable when the market turns. But in all fairness, there really isn't a right way to manage a high-end department store anymore. The model itself has become untenable. Global economic uncertainty, tariffs, shifting consumer values away from conspicuous consumption, the rise of brand flagships, and online competition have all converged and conspired to create a perfect storm. And when consumers can buy Chanel directly from Chanel or visit brand flagships for immersive experiences, what's the value proposition of a department store? Increasingly, the answer is, there isn't one for the short term.

This benefits retailers like Nordstrom and Bloomingdale's and brands that invested in their own flagship stores, but the old more-stores-equals-more-profits chain model is dead. The future belongs to smaller flagship footprints that pull together entertainment, dining, and experiential elements that drive destination shopping.

It's a lot closer to that more restrained, make more out of less European model than what we're used to seeing in the US. But let's pivot to a company that's actually trying and so far succeeding in executing a pretty impressive turnaround. Victoria's Secret. And right now they're prepping for Valentine's Day.

This truly is their go big or go home moment, and it'll be riveting to watch how it unfolds under the company's new leadership. After last year's inventory debacle, where they admitted they didn't buy enough Valentine's Day product and they even sold out of sleepwear by early February, they're taking a calculated risk by stocking up heavily this year.

But will it backfire? Maybe, but VS really has no choice. But the good news is Victoria's Secret has a few advantages up its sleeve that minimize the downside. First of all, as a self-branded retailer selling primarily owned brands, Victoria's Secret has pricing flexibility. Like-for-like comparisons are a lot harder to make, which gives them wiggle room if they need to adjust prices along the way.

Plus, they've smartly expanded into high-margin adjacent categories like beauty that encourage impulse purchases. A $20 fragrance set isn't over the top when budgets are tight. But here's what's really impressive, VS has been holding price on key items and being really selective with discounts. Even as these tariffs loom, that takes confidence and it demonstrates real strategic maturity.

Looking back at consumer trends, the continued popularity of GLP-1 medications combined with VS' fabric and fit innovations could easily spark an intimates wardrobe refresh rush. When bodies are changing, people need new underpinnings and they're ready to show it all off. So Victoria's Secret has a lot working in its favor, and the bottom line is better to have inventory left over that you can move through other channels than leave money on the table during a hot season.

Victoria's Secret is betting on boldness over caution, and I think it's the right call. Speaking of tariffs, I've been getting a lot of questions about whether consumers should stock up on home goods before prices spike. My answer, well, first of all, I'm not sure that stocking up on sofas and end tables is a thing, but either way, I say don't try to outsmart the system.

Because the question isn't which home goods categories will increase in price. It's which retailers will be better positioned to navigate tariffs. Retailers like Home Goods have a built-in advantage. Their business model hinges on opportunistic buying with flexible assortments. Home goods customers don't expect consistency, in fact, they love unpredictability. Treasure hunts are their jam and tariffs are not going to change that dynamic. Retailers like Walmart operate a lot differently, but they have their own advantages. They've got the resources to build inventory ahead of tariff impacts, deep knowledge from a diverse supply chain network, and the financial cushion to weather storms.

They can absorb hits in home goods and other categories and easily make up the difference elsewhere through their advertising and marketplace revenue, or just by shifting the emphasis to other categories. And that, of course, is ditto for Amazon. Did I mention diversify or Die? So when you look at all of this, there are too many mitigating factors for consumers to accurately predict which items will spike.

It's like trying to time the market. It. If you genuinely need something and can afford it, now by all means get out your credit card, but don't load up on stuff you don't need just based on speculation. Retailers are far more sophisticated at managing these pressures than the average consumer, and they might just put stuff out at a loss to keep you coming back.

Let's talk about what happens when a brand loses its way. Let's revisit Cracker Barrel's continued struggles after their disastrous rebrand attempt. Cracker Barrel's problem wasn't the literal details of going from kitchy to classy and cluttered to minimalist. The problem was lurching from ditch to ditch with a defensive reactionary stance.

Very much like Target, that wishy-washy, backtracking made everything worse, both financially and strategically. You don't surprise a deeply [00:09:00] nostalgic customer base with radical change. You bring them along for the journey, make them feel heard, not ambushed. But instead, Cracker Barrel sprung it on customers without warning and said, "Here you go". Then they act as shocked when they got pushback. But, like Target, Cracker Barrel also got buried under politicized backlash. Now whether that controversy was bot-fueled or organic really doesn't matter because the damage was real. They were left scrambling in the worst possible position, begging for forgiveness during an economic downturn.

Traffic was down to 11% quarter to date ad spend was cut by up to $16 million. Their CEO, Julie Masino, admits that they had a brand reputation issue that required "rebuilding trust one guest at a time". Well, that's code for this is gonna take years, not quarters. In the meantime, some former loyal customers still have their arms crossed and they're holding some really hard grudges.

The $20 to $25 million in savings from layoffs really isn't gonna fix what's fundamentally broken here. It's a loss of confidence and clarity about what Cracker Barrel stands for, and you can't cost-cut your way out of an identity crisis.

Now, let's dive into something we all encounter every day, the psychology behind constant sales and so-called fake discounts.

I was asked about this by a global business reporter recently, and I'm really glad because it gets to the heart of how retail has trained consumers to think about value. Sales trigger a powerful psychological cocktail: urgency, scarcity, and the feeling of winning by getting a deal. Shoppers don't just want products. They want to feel smart about buying them. Retailers like Aldi and Costco [00:11:00] know this, and they do a great job of playing on it every day. But other retailers sometimes need a sales sign to validate that feeling. Even if the discount isn't as deep as it seems.

Do you remember when sales were seasonal and there were real clearance events to move inventory? Well, isn't that a quaint concept these days? Because ever since retailers discovered that perpetual promotions drive traffic, the monster they've created has only gotten bigger. Customers have learned to never pay full price. So retailers have to keep manufacturing sales just to maintain their baseline traffic, and some of the big guys can play this game year-round without any repercussions.

But monitoring the situation or attempting to police pricing regulations is downright futile in this environment, and adding to it, private brands create what I call terminal uniqueness. When Lululemon sells a yoga pant, [00:12:00] manufactured specifically for them, who's to say what the real price should be?

There's no external benchmark, so that makes the entire concept of a fake discount almost impossible to monitor. Here's why Apple, Dell, and Costco don't play this game. They've built their brands on differentiated value propositions that don't require constant sales. Apple sells aspiration and ecosystem access, Costco delivers consistently low prices and high quality, so they don't need fake urgency because the value's always there. And, just importantly, so is consistent pricing. The fake discount phenomenon is a symptom of a deeper problem, though, retailers train customers to be discount-dependent, and now they're trapped in that cycle.

Breaking free requires either Apple-level brand power, or Costco-level operational discipline. Most retailers have neither, unfortunately, so they're taking a dizzying and continuous ride on a downward pricing spiral.

But speaking of retailers trapped in cycles, we need to talk about Target again. Their latest headache is the immigration enforcement ramp-up in Minneapolis, and it's put Target in another impossible position.

Now, the minute the news broke about ice activities in Minneapolis, I thought, "oh, no. Target territory". It's not that Target stores are only located in Minneapolis, or even that this will significantly impact sales directly. It's all about energy and perception. Target's facing another round of criticism for perceived inaction, even though there's really very little they can do legally in this situation.

In the last episode, we talked about why it no longer makes sense to compare Walmart and Target. Well, that's already gone a step further. Target's become the [00:14:00] lightning rod that's taking Walmart off the hook in that public sentiment department. Remember when Walmart was retail's favorite punching bag? Well, that's still out there, but now it seems that people are almost anxious to blame Target for everything. And if you ask me, it all stems from their previous prevaricating on social justice and DEI issues. Target just can't catch a break. It's partly of their own making from past indecisiveness, and I don't know that they're in a strong position to battle it.

So what do all these stories tell us about retail in 2026? First model mortality. Saks shows us that being luxury isn't enough when the fundamental distribution model has shifted. The department store concept depended on being a curated destination with exclusive brand access. But when brands control their own distribution, that value proposition evaporates.

Saks becomes yet another retailer that thinks it's a brand when it long ago became just another place that sells brands. And unfortunately, they bought another retailer that still was a brand in its own right, Neiman Marcus. So Sak's identity crisis ended up diluting the entire portfolio. Know thyself is the new cardinal rule.

Second, survival of the focused. The companies that know who they are and stick to it like Costco and Apple, and now maybe even Victoria's Secret in their turnaround, have much more resilience than companies that chase trends or try to be everything to everyone.

Cracker Barrel lost itself by lurching at modernization. Target lost itself trying to navigate political minefields reactively, and by riding the fence all along the way.

And third, operational excellence beats marketing theatrics. Whether it's fake discounts, rebrand attempts, or crisis management, companies that nail the fundamentals like inventory management, supply chain sophistication, customer understanding... these are the ones that have more room to play and to survive volatility.

Our retail heat map shows us an industry in the middle of a massive sorting process. Some companies like Walmart and Amazon have built such sophisticated platforms that they can weather almost any storm and even monetize the chaos.

Others like Saks have discovered that past prestige and current realities don't always align. The most dangerous place to be is in that middling middle. Companies like Target and Cracker Barrel that have lost their operational mojo while also facing perception challenges. When you're fighting on multiple fronts, it's exponentially harder to gain ground.

But there's hope for companies willing to do the hard work. Victoria's Secret is showing that focused execution and strategic patience can turn things around. The key is to know what game you're playing, not to try to play every game at once.

As we head deeper into 2026, I'll be watching all of these guys and playing storm tracker.

But before I sign off today. I want to shift gears and share something personal that actually reinforces what we've been talking about, especially authentic customer experience. Three words have never left my mouth, even as long as I've been in retail: "customer for life". I've spent decades analyzing retail strategies, dissecting customer experience tactics, and tracking the evolution of personalization.

But yesterday, a flower bouquet reminded me that true personalization isn't just algorithms predicting or suggesting my next purchase.

But let me back up. I adopt senior dogs. These are the ones that have been neglected, mistreated, and overlooked. I make sure that their final chapter is filled with great vet care, good groceries, and a ton of love.

It's become a passion of mine that I truly didn't see coming, but now I'm fully locked in. I've said goodbye to several of these fur babies over the years because of course, it goes with the territory. But I gotta say, losing two within a month was devastating. First was our Chihuahua, Twyla. She passed away at 18 years old, four weeks ago. We adopted her when she was 12 as an overweight lifeless dog. We basically thought, Hey, we'll give her a couple of comfortable years. Well, she became pure joy embodied and gave us six years of daily delight. She was indescribable and delicious, and I will miss her forever.

A little over a year ago, Thelma Lou joined our pack. She was a 10-year-old dachshund mix who came to us seemingly crippled physically and emotionally. Within weeks, she blossomed, tail wagging constantly, loving her walks, craving cuddles, and the better she felt, the feistier and sweeter she got. She finally felt safe to just be her, and it was wonderful to behold.

But then came a diagnosis of pancreatic cancer. It was aggressive and fast. We had her on all the right meds, and we ordered a special diet from Chewy that our vet prescribed. Last week, we had to help Thelma cross the Rainbow Bridge. Still reeling from the loss, I contacted Chewy's Chat to arrange a return for the case of her special food that arrived on the day she passed away.

The representative actually kicked off our chat asking how Thelma was doing. When I explained that we had just lost her, everything changed. The rep issued an immediate refund and told me not to worry at all about returning the food and just to donate it. She ended the chat expressing genuine condolences, and I have to say that that exchange actually made me feel better when I didn't think anything could.

Yesterday, a sweet bouquet of flowers arrived on my porch with a handwritten note from "your Chewy family", and it mentioned Thelma by name. Personal, unexpected, and completely above and beyond. So here's what retail gets wrong about personalization. True personalization recognizes the context of someone's life, not just their purchase history. You've heard me say it before and it's so true here. It's not a zero-sum game. It's about striking a balance between high tech and high touch, and that means empowering employees to act with humanity, not just following scripts, creating systems that make room for compassion, not just enforcing rigid workflows. Chewy clearly arms its teams with tech, but the magic was in giving people permission to care, the agency to act, and apparently a budget for flowers when someone's heart is broken.

Retailers love to talk about "surprising and delighting" their customers and "customer lifetime value," but Chewy showed what creating a customer for life actually looks like, and it had nothing to do with their next sale. In fact, it was triggered by one of the most dreaded retail transactions, a return.

And I want to share too, that when people find out we adopt seniors, the usual response is some version of, "wow, good for you. I could never do that". But I'm telling you now that nothing has been more rewarding. Seeing those lights go on in their eyes, watching them blossom, meeting them where they are without even knowing where they've been, and discovering their love language one day at a time. And yes, letting them go surrounded by love after doing your very best. Nothing even comes close. So maybe there's a frosted face out there waiting for you, and I hope you'll consider opening your home and your heart. Rest easy. Sweet. Thelma and Twyla, you were both so loved, and I would do it all again in a heartbeat.

Until next time, keep speaking retail and remember, adopt, don't shop.

Thanks for listening in today. I hope you enjoyed the episode, and if you did, please like, share and subscribe. You can invite me to your organization or event to bring conversations like this to life in your spaces. That's what I do. B2B, coaching, training, and executive consulting.

If it has to do with retail thought leadership, B2B, market positioning, and business development. It's probably something I can help you with. If you're interested in learning how we can work together, reach out to me at spieckermanretail.com or email team@spieckermanretail.com to book a discovery call.