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Discounting has been part of retails toolkit for decades, and it can be effective, especially during high-stakes shopping seasons. But as promotions become more frequent across the industry, companies are taking a closer look at the downside: Short-term sales gains dont always come with long-term loyalty or durable margins, and customers remember how a brand made them feel far more than what they saved at checkout. Whats often missing from the conversation is the role of experience-led value. Loyalty isnt built through price aloneits built through moments that make a customer feel recognized, appreciated, and confident they made the right choice. When brands compete only on discounts, they sacrifice those moments in favor of short-term volume. This coming year, retailers may feel the urge to pull the markdown lever more than ever. While the National Retail Federation pegged retail sales during the recent holiday shopping season to exceed $1 trillion, retailers saw fewer unit sales as shoppers dealt with tariff-driven sticker shock. As a result, 2025 marked a significant change in consumer behavior as shoppers across the board sought value and deals. That shift is likely to persist through 2026, increasing pressure on retailers to use markdowns to move inventory. The risk isnt that retailers will discount, its that discounting becomes the strategy rather than the symptom. WHEN DISCOUNTS COST MORE THAN THEY DELIVER Kohls offers a useful illustration of this tension. In the third quarter of 2025, the retailer reported a modest year-over-year increase in gross margin, while operating income declined amid softer sales. The results underscore how difficult it can be to translate promotional activity and operational improvements into sustained profitability when demand remains under pressure. This dynamic isnt unique to Kohls. Shifting consumer preferences, lingering supply-chain complexity, and intensified competition have forced many retail leaders to make difficult decisions about pricing and inventory. Target faced a similar challenge in 2022, when excess inventoryparticularly in home and apparelprompted the company to take decisive markdown and inventory-reduction actions. While those moves helped rebalance inventory levels, they also weighed on near-term profitability. More recently, Lululemon has contended with elevated promotional activity amid signs of slowing demand in the U.S. and increased competition in the athleisure category from brands like Vuori and Athleta. Analysts have pointed to higher markdown levels as retailers across the space work to maintain traffic and manage inventory in a more competitive environment. Taken together, these examples reflect a broader pattern in retail: promotions can help stabilize revenue in the short term, but they dont always improve operating leverage or long-term customer value. Discounts move inventorybut they rarely move customer lifetime value in the same direction. WHY DISCOUNTING FEELS INEVITABLE BUT ISNT SUSTAINABLE Discounting has intuitive appeal. In a crowded market with shrinking discretionary budgets, deals cut through the noise. Spending trends underscore just how price-sensitive shoppers have become, with a growing percentage planning holiday-season purchases early and hunting for discounts across channels. Yet this rush to save can produce a dangerous feedback loop: 1. Shoppers learn to wait for deals. 2. Brands feel pressured to offer deeper discounts. 3. Margins shrink, forcing even steeper promotions next cycle. Over time, this turns what should be a preference decision into a pricing decision, and pricing decisions rarely build durable brands. LOYALTY IS BUILT BEYOND THE TRANSACTION If discounting tells a shopper, Buy now because its cheap, then true loyalty says, Buy again because it matters. The difference is subtle, but profound. Loyalty isnt a transaction with a strike price; its a series of experiences that make a customer feel recognized, appreciated, and connected. It doesnt live at checkout. Its built in the moments of fulfillment, engagement, and emotional connection that follow. Yet many retail strategies still prioritize pre-purchase price incentives over post-purchase relationship building. Thats why promotions dominate inboxes, but customer lifetime value stagnates. A BETTER PATH FORWARD Some brands are finding a way out of this loop by shifting emphasis away from discounts and toward experience-led value. This includes deploying value-oriented pricing structures that dont train customers to wait for sales. Retailers can also offer post-purchase experiences that reinforce brand affinity without discount hooks. They can also provide more personalized engagement that acknowledges the shopper as an individual rather than a deal seeker. Retailers who embrace these strategies in 2026 signal something important: you matter to us, not just your wallet. And that distinction, over time, fuels repeat business in a way discounts never can. Discounts will always have a placeespecially during peak shopping seasons when consumer attention is fragmented and competitive pressure is intense. But when discounting becomes the foundation of a pricing strategy rather than a tactical lever, it eats into profits and inwardly rewires customer expectations. The retailers that will win in 2026 and beyond wont be the ones offering the biggest discounts. Theyll be the ones who understand how customers remember brands, through moments of appreciation, relevance, and experience that extend beyond the transaction. As the past holiday season showed, even the most sophisticated retailers can fall into the trap of equating promotional volume with lasting value. The brands that win in the long run will resist that reflexand instead focus on creating moments that customers remember, not just prices they respond to. Elery Pfeffer is the CEO at Nift.
Category:
E-Commerce
You wouldnt pay a surgeon to file your tax return, and you wouldnt ask your accountant to perform your appendectomy. The same is true for AI: Organizations should start realizing that different AI providers excel at different needs, from coding to specialized research or creative design. Over the coming year, enterprises will absorb a variety of these AI providers technologies in earnest and at scaledepartment by department, role by role. Legal teams will standardize on tools like Harvey. Customer service teams will rely on Glean or purpose-built agents. Development teams may choose resources from Anthropic. Marketing, engineering, finance, and HR will similarly gravitate toward AI resources from Microsoft, xAI, or OpenAI, optimized for their specific needs. In other words, enterprises will evolve from the idea that single-provider AI resources will solve their needs to an era of targeted, role-based, or need-based AI. Making matters even more complicated, many AI providers are now beginning to roll out their own browsers. Enterprise leaders thus face a new challenge: how to manage the onslaught of AI needs that are now arriving. HISTORY IS REPEATING ITSELF Enterprises have been here before. When cloud computing emerged, many dipped their toes in the water by standardizing on a single provider. The logic was simple: fewer vendors, lower cost, less risk. But as cloud usage expanded, different workloads demanded different strengths, and organizations diversified their cloud infrastructure. The same dynamic emerged with data platforms. Early efforts focused on centralized applications like data lakes, but as use cases multiplied, organizations often found that no single system served every real-world use case equally well. Most enterprises responded by adopting multiple tools around a shared data foundation. In both cases, organizations that had prepared themselves for flexibility were better positioned. AI is following this same trajectory, only faster. And unlike cloud or data infrastructure, AI adoption isnt happening quietly behind the scenes. Its happening in daily workflows across departments, often without central coordination. Leaders can therefore best help their organizations succeed by embracing many tools, each chosen for what it does best, while managing them through shared controls. THE RISK OF AI TOOL SPRAWL As AI systems and use cases proliferate, failing to prepare poses real risks to the enterprise. This proliferation extends beyond standalone AI tools. Increasingly, SaaS applications from CRM systems and productivity suites to finance and HR platforms embed their own AI. In many cases, AI adoption will happen by default, not by deliberate choice. With these tools, teams will also inherit fragmented security policies, inconsistent controls, and limited visibility. Tools that seem harmless in isolation can create meaningful risk in aggregate. This is the rise of shadow AI: systems introduced to solve real problems, but without the oversight to manage them responsibly. With agentic AI, where systems act on users behalf, those risks compound: permissions expand and accountability becomes harder to trace. If these tools are left unchecked, leaders will lose sight of where AI is used, what data it touches, and which systems act autonomously on the organization’s behalf. Experimentation and innovation should not be allowed to scale faster than oversight. GOVERNANCE IS THE MISSING LAYER Multimodal flexibility does not have to come at the expense of visibility and security. Again, we have been here before. With SaaS, enterprises dont manage a wide variety of capabilities by forcing everyone onto one system. They manage it by establishing shared controls across many tools. Enterprises need a governance layer that sits above all AI vendors. That layer should provide: Visibility across AI usage Policy enforcement independent of model provider Guardrails for data access Safe experimentation Support for bringing your own device, contractors, and distributed teams Governance doesnt restrict freedom. It enables it by allowing organizations to choose every model they want and assign them across their teams without introducing new risk. And true governance cant rely on technology alone. Leaders must cultivate a culture of AI literacy, where every employee can confidently evaluate, validate, combine, and challenge AI systems. Then organizations can embrace a multitude of AI tools, safely, and effectively. PREPARE FOR MULTI-MODEL SUCCESS Much like SaaS, the cloud, and data platforms before it, AI will soon spread across roles, workflows, and applications. Leaders that build in the capacity to manage all these modelsthrough visibility, governance, and an AI-fluent workforcewill be best positioned to capture all of AIs advantages without compromising safety, trust, or control. Steve Tchejeyan is president of Island.
Category:
E-Commerce
Shares in Palantir Technologies (Nasdaq: PLTR) are rising this morning, one day after the AI data analysis software company with significant U.S. government contracts reported better-than-expected Q4 earnings. Heres what you need to know about Palantirs latest results and its rising stock price. Palantirs Q4 2025 beat Wall Street expectations Yesterday, Palantir announced its Q4 2025 earnings, and investors breathed a sigh of relief. For Palantirs Q4, which ended on December 31, the company brought in $1.41 billion in revenue, signaling 70% year-over-year growth. The majority of that revenue comes from Palantirs U.S. customers, which is split roughly evenly between the U.S. government and commercial U.S. businesses. Palantir said U.S. government revenue totaled $570 million for the quarter, representing 66% year-over-year growth in that vertical. U.S. commercial revenue totaled $507 million137% year-over-year growth. But more important than those actuals was what Wall Street had been expecting. And Palantir easily surpassed those expectations, leading to the rapid rise in its stock price today. As cited by CNBC, London Stock Exchange Group (LSEG) estimates expected Palantir to bring in $1.33 billion for the quarter. The company ended up surpassing that estimate by around $80 million. Analysts were also expecting an earnings per share (EPS) of 23 cents. Palantirs actual EPS for the quarter was 25 cents. PLTR shares are still down from their all-time highs Palantir released its earnings results after the closing bell yesterday, and today its stock price is reaping the rewards of those results, enjoying double-digit growth in premarket trading. As of this writing, PLTR shares are up 11.35% to $164.55. The companys share had closed at $147.76 yesterday. That share price pop will be music to the ears of Palantir investors. Before this morning’s premarket trading bump, PLTR shares were down nearly 17% year-to-date. Its current premarket price rise doesnt quite put PLTR shares back in the black for the year, but its definitely a move in the right direction. Palantir shares had hit an all-time high of above $207 in November, after seeing a phenomenal year of growth. The previous November, in 2024, started with shares sitting in the low-40s range. But increasing government contracts and AI optimism throughout the remainder of 2024 and into 2025 sent PLTR shares surging. Then came December 2025, and PLTR shares got pummeled. Between December 24 and 31, the companys stock price fell from the $194 range to around $177. That fall reflected both rising concerns about Palantirs lofty valuation and broader worries about a potential AI bubble. Where does PLTR go from here? Despite Palantir beating expectations for Q4, the future of its stock price likely hinges on its abilityor notto continue delivering results that justify its valuation. As of yesterdays close, Palantir was valued at around $352 billion and traded at a price-to-earnings ratio of more than 230, which is incredibly high for even a tech company. The companys stock price could also be significantly impacted if upcoming Big Tech earnings do not meet expectations and thus reignite fears of an AI bubble. If investors turn sour on AI stocks, Palantir shares could once again be hit hard. For instance, Google parent Alphabetthe best performing of the so-called Magnificent 7 tech stockswill report earnings on Wednesday. Fellow tech giant Amazon will report the following day. Later this month, meanwhile, AI chip giant Nvidia Corporation will report its results. Investor sentiment around AI could be deeply impacted by the results of any one of those companies. As for Palantir itself, the firm issued guidance yesterday for both its current Q1 2026 and its full-year 2026. For its Q1, Palantir said it expects revenue of between $1.53 billion and $1.54 billion. Thats more than the $1.32 billion that many analysts were expecting. For its full-year 2026, Palantir expects revenue of $7.18 billion to $7.2 billion. That is nearly $1 billion more than many analysts were expecting.
Category:
E-Commerce
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