Good morning, ! It’s Thursday and we’re diving into the economics of clothing and apparel. April is a sad month for furniture retailers but the rebound is just around the corner. Southern & Western Europe performs as the top Gift card markets in the continent, and the fashion industry is embracing its inner weatherman, predicting a forecast of uncertainty.

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DATA DIVE

The Tailored Economics Behind Your Favorite Hoodie

The apparel industry shook off its COVID sweatpants era and now eyes $2.04T by 2029, thanks to fast fashion, sustainability, and AI stylists. Inflation tried to crash the party: producer costs ballooned, but retail prices stayed tame, meaning brands took one for the team (and their margins). 

Meanwhile, December remains the Beyoncé of retail months, generating a 4% MoM sales spike. Under the hood, a regression model reveals the big spend drivers: personal income growth powers shopping sprees, saving habits choke them, and consumer vibes tip the scale. Pro tip: if you're timing investments, track these variables—because apparently, consumers spend based on how rich and how moody they feel. (Read or Listen to Full Report)

TREND OF THE WEEK

Fashion’s Forecast – Uncertainty, With a Chance of Recession

The fashion industry is channeling its inner weatherman for 2024: forecasting "uncertainty" with strong gusts of geopolitical risk and economic volatility. According to the BoF-McKinsey State of Fashion 2024 Survey, a record 38% of executives expect conditions to worsen—the biggest pessimism spike since 2017. Non-luxury retail is set for modest global growth (2%-4%), but after adjusting for sticky core inflation, that's like running a marathon on a treadmill. Europe and the US will inch forward (barely), while China is expected to outpace the West, thanks to a still-expanding middle class and the government's healthier lifestyles push. Meanwhile, e-commerce (remember that?) is making a comeback, with 64% of execs betting bigger on owned online channels. (More)

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ECOMMERCE

Amazon Reigns, But JD.com’s U.S. Rise Turns Heads in E-Commerce Net Sales

Amazon.com still wears the crown in U.S. e-commerce, clocking in at a commanding $152.8B in net sales for 2024. But the real shocker is JD.com, the Chinese giant, pulling in a staggering $117.7B, surpassing Walmart.com and firmly planting itself as Amazon’s only serious sales rival.

Walmart rounds out the top three with $77.6B, while Apple and Shein are neck-and-neck around the $48B mark. South Korea’s Coupang and the usual domestic suspects, Target, Home Depot, trail behind, with the chart capped by Amazon’s German and UK platforms, which still generated north of $18B each.

These numbers represent e-commerce net sales, not GMV, offering a more precise view into where consumer dollars are actually flowing. The takeaway? U.S. online retail is no longer a domestic game, and brands that underestimate international players do so at their peril.

DEAL OF THE WEEK

Brewing Up Growth: FCPT Picks Up Caribou Coffee Property for $1.4M

Four Corners Property Trust (FCPT) isn’t slowing down. The net-lease REIT has snapped up a Caribou Coffee site in Wisconsin for $1.4 million, continuing its 2025 expansion spree. The deal features an 8-year corporate lease with Panera Brands, offering investors a 7.1% cap rate, a sweet spot for income stability in today’s competitive market.

What’s the strategy? Prime locations, corporate-backed tenants, and long-term lease security are the cornerstones. This move fits neatly into FCPT’s broader playbook, following earlier 2025 acquisitions like a $16.8M Whataburger portfolio and a $5.3M auto services property, all purchased with cap rates between 6.8% and 7.1%.

Bottom line: In a market where predictability is king, FCPT’s Caribou Coffee buy is a classic REIT power move, small deal, steady cash flow, big portfolio impact. (More)

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BROUGHT TO YOU BY THE GIFT CARD CAFE

The Billion-Dollar Budget of European sub-regions

Across Europe, gift cards aren’t just surviving — they’re thriving. Valued at $173.7B in 2023, the market is sprinting toward $558.9B by 2033, fueled by corporate demand, e-commerce, and a greener conscience. 

By regions, DACH leads with $14.1B, but UK & Ireland are hot on their heels at $9.3B. Digital upgrades like mobile wallet integration and AI-driven personalization are keeping these cards from feeling as outdated as fax machines. Plus, closed-loop cards tied to loyalty programs are the new budget hacks for consumers. In short: forget flowers. Europe is choosing instant gratification, one pixelated "thank you" at a time. (More)

CONSUMER TECH

AI Chips Are the New Premium Play in Smartphones

Forget megapixels, AI processors are becoming the new must-have spec in smartphones, especially where consumers are willing to spend big. In Developed Asia, 62% of phone sales by value now come from devices equipped with AI chips, followed by Western Europe (53%) and China (41%).

This isn't just a feature war, it's a strategic lever for margin expansion. As hardware innovation plateaus, phone makers are banking on AI chips to justify premium pricing, differentiate product tiers, and enable exclusive software experiences, from image enhancement to voice assistants to predictive UI.

But the picture shifts dramatically in Emerging Asia (26%) and Latin America (14%), where budget-conscious consumers and slower device cycles challenge the rollout of AI-capable models. For OEMs and component suppliers, this signals a dual-market opportunity: premium positioning in mature economies, and AI-downscaling strategies for growth markets.

Bottom line: AI chips are less about hype and more about revenue optimization, and the regional spread shows where that playbook is gaining traction.

SEASONAL INSIGHTS

April’s Furniture Funk

If furniture sales had a New Year’s resolution, it would be "survive April." Over the past decade, Furniture and Home Furnishings Stores have reliably hit the skids every spring, with April sales averaging 5.7% lower than the full-year monthly average. Blame it on the post-holiday slowdown or the "let’s wait until summer" mentality, but April is the clear low point, with average sales falling to $9.64B versus the $10.23B norm. The good news? The sector usually starts rebounding in May, as home improvement projects and summer prep pull shoppers back.

CONSUMER BEHAVIOR

ESG Isn’t One-Size-Fits-All for Gen Z

Gen Z may be the most socially conscious generation, but which issues matter depends on who you ask. Environmental causes dominate among Asian and Hispanic Gen Z, while Black Gen Z leads in caring about social justice (38%)—a full 11 points above the overall average. Meanwhile, White Gen Z is the only group to rank “Made in the USA” in its top five. There’s also a clear craving for transparency and ethical sourcing, particularly among Asian (33%) and White (31%) Gen Z. Brands shouting “ESG” into the void without knowing their demo? That’s not strategy—it’s noise. (More)

INTERESTING ARTICLES

Why did consumer sentiment plunge by 8%?

What are the current inflation expectations among US consumers?

Why is British consumer confidence dropping amid rising economic concerns?

How could AI agents shrink advertising opportunities at key stages of the consumer journey?

"Your most unhappy customers are your greatest source of learning."

Bill Gates