What: Leading innovators in retail achieve superior financial performance by scaling transformative ideas, leveraging AI, and expanding beyond their core markets.

Why it is important: This approach reflects a growing divide between digital leaders and laggards, as confirmed by recent industry analyses.

The Bain Innovation Report 2025 reveals that the world’s most innovative companies are not simply outspending their peers on R&D but are instead investing differently, focusing on transformative innovation and separating bold bets from everyday improvements. These top innovators consistently outperform their sector peers in total shareholder return, demonstrating that a disciplined, strategic approach to innovation correlates with superior financial results. Artificial intelligence is central to their success, not as a replacement for creativity but as a tool to amplify imagination and deepen customer understanding. The report highlights that almost all leading innovators are committed to expanding beyond their core markets, using AI to unlock new growth opportunities and personalize customer experiences at scale. This combination of capital discipline, strategic risk-taking, and advanced technology integration is enabling these companies to redefine industry standards, drive sustainable growth, and create a widening gap between digital leaders and those slow to adapt.

IADS Notes: The Bain report’s insights are echoed in recent industry developments. BCG’s June 2025 analysis shows that leading retailers integrating data-driven platforms and new revenue streams are outperforming peers, while Inside Retail’s March 2025 report highlights the essential role of AI-driven personalization in meeting rising consumer expectations. Retail Dive’s January 2025 coverage of Dillard’s and Macy’s underscores the importance of disciplined capital allocation, and Central Retail’s multi-billion-dollar expansion plans, reported by Forbes and Inside Retail in June and March 2025, illustrate how international growth and omnichannel strategies are sustaining competitive advantage in a rapidly evolving market.

Bain Innovation Report 2025