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The Real Holiday Winners: Why Retail's Struggles Are Boosting These Three Industries

MarketDash Editorial Team
18 days ago
As retailers face shrinking margins and cautious consumers this holiday season, the industries that move goods, process payments, and manage supply chains are emerging as unexpected winners. Here's where investors should look beyond traditional retail plays.

Remember when the holiday season was retail's moment to shine? Black Friday stampedes, last-minute shopping frenzies, and December sales numbers that could make or break an entire fiscal year. Those days aren't completely gone, but they're looking a lot less cheerful than they used to.

Today's holiday shopping landscape is complicated by inflation, cautious consumers, and the lingering effects of tariff policies that have manufacturers and sellers absorbing higher costs while shoppers pull back. Retail sales are expected to grow just 3.6% this season—the weakest performance since 2020. Meanwhile, returns jumped 28% last year, and chargebacks surged 40%, forcing retailers, logistics providers, and payment processors to eat rising costs just as consumer debt climbs higher.

But here's the interesting part: while traditional retail struggles, the infrastructure supporting every online order—the logistics networks, payment rails, and supply chain systems—is being stress-tested in ways that reveal who's actually built to profit from volume. For investors, the opportunity isn't necessarily in retail itself, but in the industries that make modern commerce possible.

Let's look at three sectors where the holiday squeeze is creating unexpected winners: e-commerce operations, supply chain logistics, and financial technology.

E-Commerce Giants Are Moving Volume, Not Necessarily Making Money

Amazon, Temu, and Shein can push products at scale better than almost anyone. The problem? Every extra parcel now comes with higher costs: returns processing, last-mile delivery, warehousing, cross-border shipping, and new tariff expenses. Companies like Temu and Shein specialize in ultra-low-price imports, which generate plenty of transactions but deliver razor-thin margins. And it gets worse—conversion rates are weakening as shoppers face more options and less clarity about what to buy.

"During peak seasons, the biggest quiet leak in e-commerce isn't traffic—it's indecision," explains Agnieszka Wilk, CEO of Decorilla, a design platform that uses AI to help shoppers make better purchasing decisions. "When people can't easily compare options or picture how items fit together, abandonment rises and returns follow. Helping shoppers make faster, more confident decisions often protects more margin than another round of discounts."

That decision friction on the customer-facing side creates problems throughout the entire operation. "Retail margins start slipping long before a package leaves the warehouse," says Alex Sandoval, CEO of Allie AI, which builds AI systems for industrial optimization. "So much of a plant's efficiency lives in the heads of experienced workers, and when that knowledge isn't shared, output becomes fragile. By capturing that expertise and turning it into live copilot recommendations, manufacturers can keep production steady through demand spikes, giving retailers the consistency they need to protect margins."

The numbers tell the story. The U.S. Census Bureau reports domestic e-commerce sales grew 5.3% in Q2 2025 compared to Q2 2024. That's positive growth, sure, but it's nowhere near the double-digit rates we saw during the pandemic. And since the U.S. eliminated duty-free treatment for low-value imports on August 29, 2025, retailers relying on ultra-cheap overseas sourcing are facing steeper costs just as demand plateaus.

"Companies that fail to prepare for demand peaks face consequences that go far beyond a simple temporary drop in sales. They lose efficiency, trust, and momentum," said Roby Peñacastro, CEO of Leadsales, a sales-automation platform that helps retailers manage customer interactions. "The holiday season magnifies every operational weakness. AI can help manage the surge, but only if it's used to strengthen the human side of sales—faster responses, better conversations, and more consistent customer care."

Imitaz Mohammady, CEO of global technology consultancy Nisum, thinks visibility is the key differentiator. "Very few companies have end-to-end visibility across the retail chain. For us, it's about bringing the entire customer journey together—from the front end to fulfillment—so retailers can operate as one connected system." That visibility often separates retailers that grow profitably from those that just grow volume.

This holiday cycle will test whether Amazon's higher-margin businesses—advertising and Prime subscriptions—can carry the load when core retail margins compress. For Temu and Shein, the challenge is more fundamental: growth remains strong, but profitability depends entirely on how much tariff and logistics pressure they're willing to absorb.

For investors, watch gross margins, return rates, and fulfillment efficiency heading into Q1 2026. In a market where more orders don't automatically mean more profit, operational discipline beats discounting every time.

Logistics Companies Are Quietly Winning the Efficiency Game

While retailers fight over shrinking margins, the companies moving goods are finding ways to win through efficiency. Parcel volumes keep rising as holiday shopping, global e-commerce, and import demand push more freight through already-stretched networks.

Both UPS and FedEx reported higher parcel volumes this year, even as margins tightened—UPS's U.S. operating margin landed at 6.5% in Q2 2025, while FedEx came in at 5.3% in Q1 of fiscal 2026. The secret isn't just moving more packages; it's moving them smarter through automation, digital tracking, and faster reverse logistics.

UPS expects its automation initiatives to save around $3 billion annually by 2028, primarily by improving what it calls the "volume-per-resource" ratio—average daily volume divided by the number of U.S. employees. The company wants to increase that ratio from 51 in 2023 to about 59 in 2026. FedEx has similar ambitions with its Drive program, targeting $4 billion in cost savings by 2027 through network consolidation and AI-powered optimization.

"Automation alone doesn't protect margins when demand swings," says Asparuh Koev, CEO of Transmetrics. "What really moves the needle is visibility: knowing where assets are, where they'll be needed next, and how to keep them productive through peak and off-peak cycles. The companies that manage that balance reduce idle time, stabilize cash flow during the holiday surge, and keep revenue steady when volumes drop."

Returns, once considered purely a cost center, are evolving into a potential profit line. The reverse-logistics market is forecast to reach $1.2 trillion by 2033 as carriers transform post-holiday returns into recurring service contracts. Meanwhile, global freight networks are experiencing their own surge. Maersk reports that Southeast Asia-to-North America container demand is up roughly 17% year-to-date in 2025, driven partly by Temu and Shein shipments.

Both trends highlight how logistics—from ocean freight to doorstep delivery—represents one of the few genuine holiday winners, even as retailers struggle with compressed margins. For logistics stocks, the story isn't about chasing volume. It's about mastering throughput. Carriers that cut cost per parcel, automate last-mile operations, and monetize returns will be best positioned to expand margins, even as the retail side of e-commerce gets squeezed.

Payment Processors and Fintechs Face a Credit Quality Test

Consumers are entering the 2025 holiday season carrying tighter budgets and heavier debt loads. According to Adobe, buy-now-pay-later transactions are expected to drive $20.2 billion in online spending, up 11% year-over-year.

The Klarna IPO, which debuted at a valuation of $15.1 billion, demonstrates that investor appetite for installment financing remains strong. The real question for 2026 is whether these platforms can sustain growth without loosening credit standards as consumer delinquencies creep higher—approaching pre-pandemic levels for the first time in five years.

At the same time, chargebacks function as an invisible tax on merchants and processors alike. Typical dispute fees range from $15 to $50 per incident, but when you include associated fees and merchandise loss, some estimates put the total cost at up to $100 per case—roughly 2.4 times the value of the original sale. For payment networks, rising dispute costs can erode profits far faster than higher interest expenses. Each chargeback can wipe out the value of dozens of successful transactions.

"At checkout, financing isn't just about speed, but importantly, about clarity," shares Yaacov Martin, CEO of Jifiti, a global fintech that powers lending technology for banks and lenders. "When consumers understand exactly what credit they're signing up for, the risk of post-purchase friction drops dramatically. Transparent, pre-approved lending gives shoppers confidence, but it also gives merchants predictability, as they know the transaction will stand. The simplest way to protect margins is to build financing models that eliminate confusion before it starts. What is also imperative is to match the type of financing offered to the transaction at hand, which serves to increase customer conversion and revenues."

Fintechs that prioritize clear, pre-approved lending and tighter credit controls are better positioned than those chasing transaction growth at any cost. For payment processors, the bigger risk this season isn't slower spending—it's the wave of post-purchase disputes and chargebacks that can drain profits unless prevention tools improve.

Companies developing chargeback analytics or real-time transaction risk systems like Riskified or Mastercard's Ethoca stand to benefit as merchants fight margin erosion. For investors, this holiday season isn't about loan growth. It's about spotting fintechs with staying power. The next few quarters will reward platforms that can lend responsibly under pressure.

The 2025 holiday season will reveal which companies can protect profits when growth slows and costs climb. The seasonal winners used to be the best marketers or the fastest shippers. This year, they'll be the ones that manage data, logistics, and credit with discipline. That's where the real holiday cheer is hiding.

Back to News

The Real Holiday Winners: Why Retail's Struggles Are Boosting These Three Industries

MarketDash Editorial Team
18 days ago
As retailers face shrinking margins and cautious consumers this holiday season, the industries that move goods, process payments, and manage supply chains are emerging as unexpected winners. Here's where investors should look beyond traditional retail plays.

Remember when the holiday season was retail's moment to shine? Black Friday stampedes, last-minute shopping frenzies, and December sales numbers that could make or break an entire fiscal year. Those days aren't completely gone, but they're looking a lot less cheerful than they used to.

Today's holiday shopping landscape is complicated by inflation, cautious consumers, and the lingering effects of tariff policies that have manufacturers and sellers absorbing higher costs while shoppers pull back. Retail sales are expected to grow just 3.6% this season—the weakest performance since 2020. Meanwhile, returns jumped 28% last year, and chargebacks surged 40%, forcing retailers, logistics providers, and payment processors to eat rising costs just as consumer debt climbs higher.

But here's the interesting part: while traditional retail struggles, the infrastructure supporting every online order—the logistics networks, payment rails, and supply chain systems—is being stress-tested in ways that reveal who's actually built to profit from volume. For investors, the opportunity isn't necessarily in retail itself, but in the industries that make modern commerce possible.

Let's look at three sectors where the holiday squeeze is creating unexpected winners: e-commerce operations, supply chain logistics, and financial technology.

E-Commerce Giants Are Moving Volume, Not Necessarily Making Money

Amazon, Temu, and Shein can push products at scale better than almost anyone. The problem? Every extra parcel now comes with higher costs: returns processing, last-mile delivery, warehousing, cross-border shipping, and new tariff expenses. Companies like Temu and Shein specialize in ultra-low-price imports, which generate plenty of transactions but deliver razor-thin margins. And it gets worse—conversion rates are weakening as shoppers face more options and less clarity about what to buy.

"During peak seasons, the biggest quiet leak in e-commerce isn't traffic—it's indecision," explains Agnieszka Wilk, CEO of Decorilla, a design platform that uses AI to help shoppers make better purchasing decisions. "When people can't easily compare options or picture how items fit together, abandonment rises and returns follow. Helping shoppers make faster, more confident decisions often protects more margin than another round of discounts."

That decision friction on the customer-facing side creates problems throughout the entire operation. "Retail margins start slipping long before a package leaves the warehouse," says Alex Sandoval, CEO of Allie AI, which builds AI systems for industrial optimization. "So much of a plant's efficiency lives in the heads of experienced workers, and when that knowledge isn't shared, output becomes fragile. By capturing that expertise and turning it into live copilot recommendations, manufacturers can keep production steady through demand spikes, giving retailers the consistency they need to protect margins."

The numbers tell the story. The U.S. Census Bureau reports domestic e-commerce sales grew 5.3% in Q2 2025 compared to Q2 2024. That's positive growth, sure, but it's nowhere near the double-digit rates we saw during the pandemic. And since the U.S. eliminated duty-free treatment for low-value imports on August 29, 2025, retailers relying on ultra-cheap overseas sourcing are facing steeper costs just as demand plateaus.

"Companies that fail to prepare for demand peaks face consequences that go far beyond a simple temporary drop in sales. They lose efficiency, trust, and momentum," said Roby Peñacastro, CEO of Leadsales, a sales-automation platform that helps retailers manage customer interactions. "The holiday season magnifies every operational weakness. AI can help manage the surge, but only if it's used to strengthen the human side of sales—faster responses, better conversations, and more consistent customer care."

Imitaz Mohammady, CEO of global technology consultancy Nisum, thinks visibility is the key differentiator. "Very few companies have end-to-end visibility across the retail chain. For us, it's about bringing the entire customer journey together—from the front end to fulfillment—so retailers can operate as one connected system." That visibility often separates retailers that grow profitably from those that just grow volume.

This holiday cycle will test whether Amazon's higher-margin businesses—advertising and Prime subscriptions—can carry the load when core retail margins compress. For Temu and Shein, the challenge is more fundamental: growth remains strong, but profitability depends entirely on how much tariff and logistics pressure they're willing to absorb.

For investors, watch gross margins, return rates, and fulfillment efficiency heading into Q1 2026. In a market where more orders don't automatically mean more profit, operational discipline beats discounting every time.

Logistics Companies Are Quietly Winning the Efficiency Game

While retailers fight over shrinking margins, the companies moving goods are finding ways to win through efficiency. Parcel volumes keep rising as holiday shopping, global e-commerce, and import demand push more freight through already-stretched networks.

Both UPS and FedEx reported higher parcel volumes this year, even as margins tightened—UPS's U.S. operating margin landed at 6.5% in Q2 2025, while FedEx came in at 5.3% in Q1 of fiscal 2026. The secret isn't just moving more packages; it's moving them smarter through automation, digital tracking, and faster reverse logistics.

UPS expects its automation initiatives to save around $3 billion annually by 2028, primarily by improving what it calls the "volume-per-resource" ratio—average daily volume divided by the number of U.S. employees. The company wants to increase that ratio from 51 in 2023 to about 59 in 2026. FedEx has similar ambitions with its Drive program, targeting $4 billion in cost savings by 2027 through network consolidation and AI-powered optimization.

"Automation alone doesn't protect margins when demand swings," says Asparuh Koev, CEO of Transmetrics. "What really moves the needle is visibility: knowing where assets are, where they'll be needed next, and how to keep them productive through peak and off-peak cycles. The companies that manage that balance reduce idle time, stabilize cash flow during the holiday surge, and keep revenue steady when volumes drop."

Returns, once considered purely a cost center, are evolving into a potential profit line. The reverse-logistics market is forecast to reach $1.2 trillion by 2033 as carriers transform post-holiday returns into recurring service contracts. Meanwhile, global freight networks are experiencing their own surge. Maersk reports that Southeast Asia-to-North America container demand is up roughly 17% year-to-date in 2025, driven partly by Temu and Shein shipments.

Both trends highlight how logistics—from ocean freight to doorstep delivery—represents one of the few genuine holiday winners, even as retailers struggle with compressed margins. For logistics stocks, the story isn't about chasing volume. It's about mastering throughput. Carriers that cut cost per parcel, automate last-mile operations, and monetize returns will be best positioned to expand margins, even as the retail side of e-commerce gets squeezed.

Payment Processors and Fintechs Face a Credit Quality Test

Consumers are entering the 2025 holiday season carrying tighter budgets and heavier debt loads. According to Adobe, buy-now-pay-later transactions are expected to drive $20.2 billion in online spending, up 11% year-over-year.

The Klarna IPO, which debuted at a valuation of $15.1 billion, demonstrates that investor appetite for installment financing remains strong. The real question for 2026 is whether these platforms can sustain growth without loosening credit standards as consumer delinquencies creep higher—approaching pre-pandemic levels for the first time in five years.

At the same time, chargebacks function as an invisible tax on merchants and processors alike. Typical dispute fees range from $15 to $50 per incident, but when you include associated fees and merchandise loss, some estimates put the total cost at up to $100 per case—roughly 2.4 times the value of the original sale. For payment networks, rising dispute costs can erode profits far faster than higher interest expenses. Each chargeback can wipe out the value of dozens of successful transactions.

"At checkout, financing isn't just about speed, but importantly, about clarity," shares Yaacov Martin, CEO of Jifiti, a global fintech that powers lending technology for banks and lenders. "When consumers understand exactly what credit they're signing up for, the risk of post-purchase friction drops dramatically. Transparent, pre-approved lending gives shoppers confidence, but it also gives merchants predictability, as they know the transaction will stand. The simplest way to protect margins is to build financing models that eliminate confusion before it starts. What is also imperative is to match the type of financing offered to the transaction at hand, which serves to increase customer conversion and revenues."

Fintechs that prioritize clear, pre-approved lending and tighter credit controls are better positioned than those chasing transaction growth at any cost. For payment processors, the bigger risk this season isn't slower spending—it's the wave of post-purchase disputes and chargebacks that can drain profits unless prevention tools improve.

Companies developing chargeback analytics or real-time transaction risk systems like Riskified or Mastercard's Ethoca stand to benefit as merchants fight margin erosion. For investors, this holiday season isn't about loan growth. It's about spotting fintechs with staying power. The next few quarters will reward platforms that can lend responsibly under pressure.

The 2025 holiday season will reveal which companies can protect profits when growth slows and costs climb. The seasonal winners used to be the best marketers or the fastest shippers. This year, they'll be the ones that manage data, logistics, and credit with discipline. That's where the real holiday cheer is hiding.