The Brief: 40K Store Closures, Livestream Commerce, and the AI ROI Problem
Today's Azimuth brief covers the looming wave of retail closures driven by tariffs and labor costs, livestream shopping platform Whatnot's integration with Shopify, the declining share of marketers who can prove AI ROI, and Walmart's aggressive AI push highlighted in its annual report.
Today's stories:
• Retailers could close more than 40,000 stores in the next 5 years
• Whatnot integrates with Shopify, opening the platform to millions of merchants
• Share of marketers proving AI ROI drops from 49% to 41%
• Walmart's 2026 annual report highlights AI as a pivotal moment
1. Retailers Could Close More Than 40,000 Stores in Next 5 Years
UBS analysts are forecasting that U.S. retailers could close more than 40,000 stores over the next five years. The culprit isn't e-commerce eating physical retail. It's tariffs and immigration policy creating cost pressures that make marginal locations unsustainable.
Tariffs raise the cost of goods. Tighter immigration enforcement shrinks the labor pool and drives up wages. Retailers operating on thin margins with aging footprints can't absorb both at once. The stores that survive will be the ones generating enough revenue to justify their real estate. High-traffic locations in strong markets stay open. Everything else is on the table.
Expect closures to concentrate in secondary markets and older formats that no longer pull their weight. This isn't a slow decline. It's a structural reset driven by operating costs rising faster than sales can keep up.
2. Whatnot Integrates with Shopify, Opening Platform to Millions of Merchants
Livestream shopping platform Whatnot now integrates directly with Shopify, which means millions of merchants can sync inventory and run live shows without leaving their existing setup. Whatnot started with collectibles like trading cards and Funko Pops but has been expanding into fashion, beauty, and home goods, and this integration is a bet that livestream commerce works beyond niche categories.
For Shopify merchants, the integration lowers the barrier to testing livestream selling. They can keep their existing backend, add Whatnot as a sales channel, and see if live shows drive incremental revenue. For Whatnot, more sellers mean more content, which keeps buyers engaged and coming back. The platform's entire model depends on having enough live shows running at any given time to keep people browsing.
Livestream shopping still hasn't cracked the U.S. market the way it has in China, but platforms like Whatnot and TikTok Shop are showing that there's an audience for it. Whether that audience is big enough to turn livestream commerce into a mainstream sales channel instead of a novelty is still an open question. Shopify integration is Whatnot's way of finding out.
3. Share of Marketers Proving AI ROI Drops from 49% to 41%
The share of marketers who say they can prove AI ROI dropped from 49% to 41% in a single year, and in retail, the fall was even steeper: from 54% to 38%. This is happening as AI adoption continues to climb, meaning more teams are using the technology, but fewer can show that it's actually working.
Early AI wins were straightforward to measure: faster content production, automated segmentation, and basic efficiency gains. Those were real, but didn't move the needle much. Now leadership wants to see pipeline contribution and revenue growth, and most marketing teams can't connect those dots because they layered AI on top of broken attribution models and manual reporting processes that were already failing.
While declaring AI a priority is easy, proving it moves the bottom line requires defining what success looks like and building the measurement infrastructure to track it. Then you have to report it in a language that the language finance actually understands. No AI tool does that for you, which is why the gap between adoption and accountability keeps widening. Marketers who can't close it are losing budget.
4. Walmart's 2026 Annual Report Highlights AI as a Pivotal Moment
Walmart's 2026 annual report frames AI as central to the company's strategy, with CEO John Furner saying the retailer is at a pivotal moment. The report highlights e-commerce growth, new Supercenter openings, and what Walmart is calling major AI initiatives across operations and customer experience, though it doesn't break out specific investments or revenue attribution.
The language matters here. Walmart isn't calling AI experimental or a pilot program anymore. Framing it as a foundational strategy means the company expects AI to change how it operates, not just optimize around the edges. When the largest retailer in the U.S. makes that kind of declaration, suppliers, competitors, and investors all pay attention because it usually means the rest of the industry follows.
The challenge for Walmart and everyone else is the same one marketing teams are facing: turning AI ambition into measurable business outcomes. Walmart has the scale and resources to fund the experiment longer than most, but the same accountability questions apply. If AI is truly pivotal, the company will eventually need to show how it moved sales, lowered costs, or improved margins in ways that matter.
That's it for today.