What: Cognitive diversity, rather than demographic diversity, is emerging as the key driver of workplace innovation and performance.

Why it is important: This shift reflects a broader industry trend toward inclusion frameworks that balance business goals with authentic workplace culture.

The article challenges the long-held belief that demographic diversity alone drives business performance, arguing instead for a focus on cognitive diversity—differences in thought, background, and perspective—as the true catalyst for innovation and improved outcomes. It contends that race, gender, and age are poor proxies for how people think, and that diversity of education, career paths, and cognitive styles is more effective in uncovering blind spots and fostering constructive debate. The piece emphasizes that hiring for cognitive diversity must be intentional and tailored to a company’s business model, rather than simply ticking demographic boxes. Moreover, it highlights the importance of creating a culture where dissent is valued and employees are encouraged to challenge assumptions, as this leads to more robust decision-making. The article also cautions against the pitfalls of “diworsification,” where inclusion efforts dilute expertise and slow decision-making, stressing that not all ideas are equal and that constructive conflict is essential for innovation. Ultimately, it calls for a redefinition of inclusion, focusing on which ideas are heard rather than who is in the room. 

IADS Notes: The retail sector’s transition toward cognitive diversity and authentic inclusion is evident in recent developments. Retail Dive (February 2025) and HR Dive (October–November 2025) report that major retailers are moving away from explicit DEI language, adopting frameworks like FAIR to balance performance with social responsibility. Forbes (January 2025) highlights how constructive dissent within retail boards at Macy’s and Costco has driven innovation and better governance. Retail Week (March 2025) notes that while demographic diversity in boardrooms is improving, translating this into executive leadership remains a challenge, especially as strategies are tailored to different business models. BCG (September 2025) underscores that sustainable innovation in retail now relies on fostering diverse cognitive styles and empowering employee-driven ideas.

Diversity in the workplace needs a new metric

What: The widespread adoption of automated hiring processes has led to operational gains but exposed risks of bias, disengagement, and loss of human connection.

Why it is important: The shift highlights how unchecked automation can undermine employer branding and trust, as seen in recent legal and industry reports.

The accelerating use of AI in recruitment has brought notable improvements in efficiency, streamlining repetitive tasks and reducing administrative burdens. However, these operational gains have come at the cost of candidate experience and employer brand equity. As organizations increasingly rely on automated systems to manage large applicant pools, the process has become less personal, with candidates often feeling reduced to data points rather than valued individuals. This depersonalization has led to a decline in engagement and satisfaction, both for candidates and hiring teams, and has made it more difficult for companies to differentiate themselves in a competitive talent market. Furthermore, the risks of algorithmic bias and lack of transparency have become more pronounced, with legal cases drawing attention to the potential for discrimination and the need for ethical oversight. Ultimately, while AI offers clear advantages in terms of speed and scalability, its unchecked implementation threatens to erode the very qualities—empathy, trust, and connection—that define a strong employer brand and successful hiring outcomes.

IADS Notes: Recent industry evidence from April, June, July, and September 2025 confirms that AI has improved recruitment efficiency, but only a minority of organizations have successfully scaled these applications (“Where can AI help (or not) in recruitment?” Sifted, April 2025; “The AI automation trap: Slashing entry-level jobs will break your company (and maybe you),” ERE Media, June 2025; “Retail: When Agentic AI boosts humanity and customer satisfaction,” Journal du Net, July 2025; “Retail’s AI psychosis: The industry must not outsource its brain,” Inside Retail, September 2025). The “Empathy Paradox” and high-profile legal cases such as Mobley v. Workday (“Biased by design: How AI reinforces hiring discrimination,” ERE Media, July 2025; “The AI hiring time bomb: Mobley v. Workday and the coming reckoning,” ERE Media, June 2025) highlight the risks of bias and the erosion of human connection, while studies show that balanced, human-centric AI deployment leads to higher returns and improved engagement. Comprehensive training, structured oversight, and a focus on values alignment are increasingly recognized as essential for sustainable, trustworthy AI adoption.

Pour one out: AI and the death of the candidate

What: CEOs must lead a comprehensive transformation in how retail organisations integrate AI, focusing on reskilling, workflow redesign, and talent strategy.

Why it is important: Addressing the AI talent gap and fostering a culture of learning are critical for organisations to adapt and thrive, as evidenced by recent findings.

AI is rapidly transforming the retail industry, challenging traditional notions of performance, hiring, and collaboration. While most retail employees now use AI tools regularly, a significant readiness gap persists, with many lacking adequate training and understanding of how technology is reshaping their roles. CEOs are called to move beyond simply deploying new tools and instead reimagine the very nature of work, collaborating closely with HR and IT leaders to drive large-scale reskilling and workflow redesign. Attracting and retaining digital talent has become increasingly competitive, as skilled professionals prioritise meaningful work, flexibility, and clear learning paths over brand prestige. The traditional talent pyramid is evolving, with middle management roles shifting toward coaching and integration of digital capabilities, while junior staff are upskilled to meet new demands. To close the AI talent gap, retail organisations must invest in expansive upskilling programs, build cross-functional alliances, and lead with transparency to foster trust and adaptability. These steps are essential for creating a workforce capable of thriving in an AI-driven future.

IADS Notes: The transformation of work driven by AI in retail is underscored by a persistent readiness gap, as highlighted in BCG’s “AI at work: Momentum builds, but gaps remain” (June 2025), where only 36% of employees felt adequately trained despite widespread AI adoption. This gap is compounded by the need for CEO leadership and cross-functional collaboration, with “When companies struggle to adopt AI, CEOs must step up” (BCG, April 2025) revealing that only 10% of retailers successfully scale their AI initiatives, emphasising the importance of coordinated upskilling and engagement. Attracting and retaining digital talent remains a significant challenge, as shown in Forbes’ “AI talent: meet the guardians of the AI algorithms” (June 2025), which notes that AI professionals seek meaningful work and flexibility, prompting retailers like IKEA to invest in comprehensive literacy programs. The evolving talent pyramid is further complicated by the restructuring of middle management, with The Economist’s “Bonfire of the middle managers” (October 2025) illustrating that while automation is reshaping roles, effective middle managers are still essential for driving technology adoption and operational resilience. Finally, BCG’s “Skills-based organisations aren’t reaching their potential. Here’s how they can succeed” (July 2025) confirms that systematic upskilling, cross-functional alliances, and cultural transformation are critical for closing the AI talent gap and building adaptable, skills-based organisations capable of thriving in an AI-driven future.

As AI changes work, CEOs must change how work happens

What: Agentic AI is transforming marketing by enabling measurable gains in efficiency, ROI, and organisational agility.
Why it is important: The adoption of agentic AI is significant because it enables companies to scale operations, optimise costs, and respond to market changes more effectively, echoing recent findings in the sector.

Agentic AI is rapidly redefining the retail marketing landscape by introducing autonomous systems that learn, decide, and act alongside human teams. Early adopters are already experiencing substantial benefits, such as tripling ROI, accelerating campaign speed, and increasing content output, all while reducing costs by up to 20%. This new era of marketing is not just about efficiency; it empowers organisations with advanced capabilities like real-time personalisation, predictive decision-making, and root-cause analysis. As agentic AI becomes central to marketing models, retailers are restructuring workflows and team dynamics, shifting from siloed specialists to agile, AI-empowered teams. The role of the CMO is evolving, with a greater focus on orchestrating intelligent agents and fostering collaboration between marketing and IT. Success in this transformation depends on robust data integration, strong governance, and continuous upskilling, as only a minority of retailers have managed to scale AI beyond pilot projects. Those who move quickly to embed agentic AI into their operations are poised to define the next era of retail growth.

IADS Notes: The rapid adoption of agentic AI in retail is fundamentally reshaping marketing operations, team structures, and leadership roles, as highlighted in recent industry analyses. Retailers are experiencing measurable gains, with 71% of employees now using AI weekly and service efficiency improving by up to 30%, while 87% of AI-implementing companies report revenue increases of at least 6% (Journal du Net, July 2025; BCG, January 2025; Inside Retail, March 2025). This transformation extends beyond efficiency, requiring a redefinition of workflows and workforce skills, as AI agents automate core functions and free human talent for strategic and creative tasks (BCG, September 2025; Forbes, October 2025; BCG, November 2025). However, the ability to scale these benefits hinges on robust data integration and technology foundations, with only a minority of companies overcoming challenges related to data accessibility and infrastructure (BCG, December 2024; BCG, November 2025; Retail Systems Research, April 2025). The evolving role of CMOs is central, as they shift from traditional marketing management to orchestrating AI-driven growth strategies, emphasizing internal upskilling and smarter spending (BCG, June 2025; BCG, November 2025). Ultimately, successful enterprise-scale adoption depends on strong governance, leadership commitment, and comprehensive employee training, as only 10% of retailers have managed to scale AI solutions despite widespread enthusiasm (Deloitte, September 2025; Forbes, October 2025; BCG, April 2025).

The agentic marketing race is on. CMOs that move first will win.

PRINTABLE VERSION HERE 

Retail’s “location, location, location” mantra is being rewritten for a post-e-commerce world. Facing online competition, rising occupancy costs and shifting consumer habits, leading retailers are turning their real estate into multi-purpose neighbourhoods rather than single-purpose stores. The article explores this strategic pivot through four emblematic case studies: Ingka Centres opening Meeting Places that weave shopping, offices, hotels and playgrounds in 37 countries to date, Breuninger, whose Dorotheen Quartier opened in 2017 shows how a regional department store can anchor retail, apartments and offices to rejuvenate a city, Walmart, developer of a mall acquired early 2025, aiming to fuse shopping, last-mile logistics, housing and community space into a modern neighbourhood and, finally, John Lewis Partnership, venturing into build-to-rent programmes across the UK that turns surplus car parks into homes above a Waitrose or department-store anchor.

The strategic imperative: why retailers are pivoting to mixed-use projects

Traditional brick-and-mortar retailers face mounting pressure from e-commerce, changing consumer behaviours, and the need to optimise valuable real estate assets. In response, some brands are reimagining their physical presence by developing mixed-use projects that combine retail with residential, office, hospitality, and entertainment. This pivot represents more than just diversification. It’s a strategic response to several critical market forces:

• Real estate monetisation: retailers sitting on prime real estate assets are generating multiple revenue streams from the same footprint. With the rise of e-commerce, some properties can become underutilised, generating costs. Mixed-use development allows retailers to become landlords.
• Revenue stability: by incorporating residential units, office spaces, hotels, and entertainment venues, retailers reduce their dependence on product sales alone, creating more stable and predictable income sources.
• Creating destination experiences: in an era where consumers can buy almost anything online, physical retail spaces must offer something digital cannot. Lifestyle experiences are gaining traction: mixed-use developments can transform shopping from a transactional activity into a social and cultural experience.
• Community integration: mixed-use projects allow retailers to embed themselves deeper into local communities, fostering brand loyalty and ensuring long-term relevance in consumers’ daily lives.

From blue boxes to city hubs: how Ingka’s Meeting Places are re-imagining urban life

Ingka Centres, the real estate arm of IKEA, has pivoted from suburban big-box retail to their Meeting Place strategy, acquiring or building large mixed-use sites anchored by an IKEA store. Combining different functions in one place, these projects want to raise the bar regarding integrated living, working, and leisure experiences and provide an example of how these integral features of modern life can coexist. In 2025, 37 Meeting Places are already open globally, from Poland to China, from Portugal to Sweden. While they are adapting to local specificities, they are either called Avion, Livat or Lykli. Most of them bear a stylised yellow Smiley face, reminiscent of IKEA’s yellow.

One of the most significant examples is the €1 billion Livat complex in Shanghai, China. Opened in September 2024, it delivers a 430,000 square metres programme comprising a multi-functional mix of shopping, dining, entertainment, culture, wellness, children’s activities, and outdoor leisure spaces, aiming to create an all-ages-friendly, one-stop destination for lifestyle and social gatherings. It includes:

• A 200,000 square metres commercial space with more than 312 third-party stores, with approximately 71% being domestic.
• A 21,600 square metres IKEA store.
• Five Grade-A office towers.
• Deliberately non-retail amenities such as a tree-house playground and a Scandi Village, all designed to pull locals in for leisure as much as for shopping.
• Sustainability and community engagement are prioritised: the scheme incorporates an Innovation Hub that showcases circular living ideas and aligns with Ingka’s group-wide People and Planet Positive strategy.

South Asia’s counterpart, Lykli in Noida (in Delhi’s Sector 51 in the National Capital Region, 15 km from Delhi city centre) is scheduled for a 2028 handover. The project is set to attract 25 million visitors and will span 396,000 square metres and combine an IKEA store with 240 retail and F&B partners, two 37-storey office towers and Ingka’s first 267-room hotel. The transit-oriented site has its own two-line metro connection in addition to 4,500 parking lots.

Together, these investments show IKEA’s wider ambition: by owning and curating entire mixed-use districts it can lock in daily footfall for its core store, harvest long-term real-estate income, and run large-scale pilots—from rooftop biodiversity zones to circular-economy retail labs—that reinforce the group’s brand promise of affordable, sustainable living.

From single store to city quarter: Breuninger’s Stuttgart’s Dorotheen Quartier

Department store companies also venture in mixed-use projects in their own ways. As a company, Breuninger imagined and built Stuttgart’s Dorotheen Quartier in 2007, with the department store as its anchor. After 10 years in the making and a €200 million investment, the company opened this 62,000 sqm mixed-use project in 2017 to revive the area located between Stuttgart’s gourmet Market Hall, the historic Karlsplatz and the Breuninger store. Complementing it and consisting of three 6-storey buildings, the area offers a mix of luxury-oriented retailers (including Louis Vuitton, a Porsche dealership and a Tiffany store), restaurants, apartments, offices and a 350-slot underground parking lot. The project involved transforming a street into a retail space, known as the Karlspassage, which is now a small mall connected to the Breuninger store. Overall, the Dorotheen Quartier feels very lively and offers an alternative to Stuttgart’s high-street shopping area, the Königstrasse, which feels outdated (home to Peek & Cloppenburg and Galleria mid-range department stores).

The Dorotheen Quartier exemplifies how Breuninger leveraged a real estate project to create new sources of revenue. The thoughtfully designed mixed-use project has invigorated the area, seamlessly blending luxury shopping, dining, residential, and office spaces to create a lively urban ecosystem, showing Breuninger’s deep understanding of local consumer needs.

From dead mall to neighbourhood hub: Walmart’s Pittsburgh makeover

In February 2025, investing $34 million, Walmart acquired the 112,000 square metres Monroeville Mall in The Pittsburgh area in Pennsylvania, the first time the retailer has ever bought an operating regional mall outright. The company immediately confirmed that the ageing 1969 centre will be re-purposed as a mixed-use district layering new retail, restaurants, residential, hospitality, office space and public realm around (or in place of) the existing anchors. Walmart will also take advantage of the site’s location at the junction of major highways to create a last-mile fulfilment node as well as a community hub.

The project traces its DNA to the retailer’s 2018 Walmart Town Center pilot, which proposed filling the surplus Supercenter parking lots in Loveland store in Colorado, with third-party restaurants, gyms, urgent-care clinics and even apartments, to turn the big-box into the high-street of a walkable neighbourhood. Although the Loveland build never broke ground, the concept now serves as the programmatic blueprint for Monroeville and for future acquisitions the company is reportedly scouting in Texas and Florida. Monroeville will provide the scale test, positioning Walmart not just as the anchor tenant but as a developer of neighbourhoods that can capture retail sales, lease income and e-commerce efficiencies on the same parcel.

From checkouts to check-ins: John Lewis’ push into service-led rental homes

Few legacy retailers have committed to residential at the scale of the employee-owned John Lewis Partnership (JLP). Moving beyond department stores and groceries, the group has pledged to develop and operate 10,000 build-to-rent homes within a decade and has seeded the programme with a £500 million joint venture with asset-manager abrdn. JLP’s ambition is to put excellent service at the core of the UK’s private rental homes sector, with residents treated as customers, not just tenants. The scheme involves:

• Sites and scale: under-used plots such as supermarket car parks and surplus store land will be redeveloped into mixed-use complexes containing apartments and a refurbished or replacement Waitrose or John Lewis unit.
• Homes on offer: one-, two- and three-bedroom flats will come fully furnished with John Lewis products and be supported by 24/7 on-site staff. Planned amenities include shared workspaces, fitness areas and social spaces.
• Management model: rather than selling the homes, JLP will retain ownership and manage them itself, aiming to offer longer leases and a service-led experience more typical of hotels than of traditional private rentals.

This new venture will add a new income stream to bolster its core retail business and make better use of its property portfolio, much of which sits in densely populated areas with good transport links. Converting brownfield sites into housing aligns with the company’s goal of reducing urban sprawl while utilising existing infrastructure.

Entering housing is part of a wider plan to build complementary businesses. If successful, the build-to-rent arm would give the company a foothold in a growing sector while providing a hedge against the volatility of retail income. By recycling underutilised parking lots and back-of-house land into long-hold rental assets, without losing the grocery anchors that guarantee daily footfall, John Lewis is demonstrating how a department-store landlord can turn its real estate footprint into a diversified, inflation-linked income stream while deepening community presence.

Whether they sell flat-packs, fashion or groceries, each of the retailers profiled has reached the same conclusion: single-use retail boxes underperform in an omnichannel era, whereas mixed-use districts can unlock new income streams. The transition from pure retail to mixed-use development represents a fundamental evolution in how retailers can create value. Ingka, Breuninger, Walmart, and John Lewis all start with a strong anchor (an IKEA, a flagship store, a supermarket) and then layer complementary uses, including housing, offices, hospitality, and entertainment, on land they already own. The shared outcomes can be significant with diversified revenues from rents and third-party tenants, reducing the pressure on product sales. Enhancing local communities, live-work-play ecosystems give consumers more reasons to visit and stay, defending traffic against pure-play e-commerce. For retailers evaluating the same path, mixed-use development is no longer a speculative side bet but a strategic shield and a growth engine. By becoming more than merchants, retailers can monetise dormant assets, de-risk volatile sales, and secure a permanent, value-adding role in the urban fabric their customers call home.

Credits: IADS (Christine Montard)

What: BNPL and cash-back mobile apps are transforming holiday shopping by driving consumer spending and loyalty through flexible payments and rewards.

Why it is important: The convergence of flexible payments and digital rewards is driving record mobile commerce and reshaping how retailers engage with Gen Z and Millennials.

The holiday shopping landscape is being reshaped as mobile apps offering buy-now-pay-later (BNPL) and cash-back rewards become central to consumer purchasing behaviour. With 60% of U.S. consumers experiencing financial stress this season, many are turning to these financial tools to manage budgets and maximise value. BNPL spending is projected to reach up to $20.4 billion between November and December, with Cyber Monday expected to surpass $1 billion in BNPL transactions for the first time. Major players such as PayPal, Klarna, and Sezzle are enhancing their offerings with cash-back rewards and gamified experiences, while pure cash-back platforms like ShopBack and Venmo Stash are expanding through strategic retail partnerships. These innovations are particularly appealing to Gen Z and Millennials, who value convenience, instant rewards, and financial literacy tools. As mobile commerce is set to account for over half of all ecommerce sales, the integration of flexible payments and digital incentives is redefining loyalty and engagement, making every transaction more rewarding and interactive for today’s shoppers.

IADS Notes: In August 2025, The Economist reported that BNPL’s rapid expansion was transforming retail by increasing consumer spending and driving omnichannel adoption, while also prompting regulatory scrutiny. Fashion Network in November 2024 highlighted research showing BNPL boosts purchase likelihood and overall spending, especially among younger consumers. Liontree’s December 2024 analysis documented record mobile commerce and peak BNPL usage during the holiday season. Forbes in July 2025 discussed new UK regulations requiring affordability checks for BNPL providers, reflecting concerns over rising credit defaults. Finally, BCG in December 2024 noted the evolution of loyalty programs toward gamified, digital-first experiences to meet the expectations of Gen Z and Millennials.

How Buy-Now-Pay-Later and cash back apps drive holiday shopping

What: Leading luxury retailers are leveraging adaptability and experiential strategies to remain competitive and set new standards for the retail sector.

Why it is important: The evolution of luxury retail practices is influencing the entire sector, reinforcing the importance of innovation and agility in today’s market.

The Sybarite Report 2025/26 underscores how leading luxury retailers are navigating a volatile landscape by prioritising adaptability, innovation, and customer experience. In an era marked by economic uncertainty and rapid technological change, these brands are not only refining their operational resilience but also investing in immersive, personalised experiences that set them apart from competitors. The report highlights the strategic importance of refusing to remain static, with luxury retailers embracing digital transformation, AI-driven personalisation, and sustainability as core elements of their business models. These shifts are not confined to the luxury segment; they are influencing broader retail practices, as the sector increasingly looks to high-end brands for cues on customer engagement, experiential retail, and operational excellence. By championing innovation and agility, luxury retailers are redefining industry standards and shaping consumer expectations across the market, demonstrating that resilience and a forward-thinking approach are essential for long-term success.

IADS Notes: The Sybarite Report’s themes are echoed in recent industry developments. September 2025’s "Contingency planning for tariffs" (The Robin Report) and "US Consumers: Resilience in light of ongoing uncertainty" (Visa) highlight the need for contingency planning and digital resilience amid economic volatility. May 2025’s "The future of loyalty, according to luxury department stores" (Inside Retail) and June 2025’s "Why the luxury experience needs an AI moment" (BCG) show luxury retailers investing in AI-driven personalisation and immersive experiences. February 2025’s "Sustainability is a baseline for innovation" (Euromonitor) and September 2025’s "Bain Innovation Report 2025" (Bain & Company) emphasise sustainability and transformative innovation as drivers of superior performance. The influence of luxury retail on broader industry practices is evident in September 2025’s "Multi-brand retail: independent boutiques are making a comeback" (BoF) and November 2025’s "Luxury shopping is no longer just for the affluent" (Visa), documenting the rise of curated, accessible, and digitally integrated experiences.

Sybarite on the future of experience, 2025-26 report

What: The luxury sector is integrating cultural adaptation, advanced technology, and seamless omnichannel experiences to sustain growth while preserving its aura of rarity.

Why it is important: The integration of technology and cultural adaptation is crucial for maintaining brand value and customer loyalty in an increasingly globalised market.
Luxury retail is navigating the challenge of maintaining its aura of exclusivity while pursuing global expansion and appealing to new generations of consumers. The sector’s emotional power is rooted in rarity and uniqueness, yet these qualities are threatened by industrialisation and mass-market pressures. To address this paradox, brands are focusing on deep personalisation, transforming the customer relationship from transactional to emotional. Achieving this at scale requires robust supply chain management, with many luxury houses bringing production in-house or strengthening ties with manufacturers to safeguard craftsmanship and enable bespoke offerings. Technology, especially data analytics and AI, is being harnessed not just for efficiency but to orchestrate seamless, emotionally resonant experiences across all channels. Cultural adaptation is also essential, as luxury brands tailor their identities to resonate with diverse markets without compromising their core values. Ultimately, the future of luxury retail depends on its ability to blend human touch, technological innovation, and cultural sensitivity, ensuring that exclusivity remains meaningful in a rapidly evolving global landscape.

IADS Notes: The paradox of exclusivity and global growth in luxury retail has been a recurring theme in industry analysis. In March 2025, LUXUS PLUS highlighted how Hermès and Brunello Cucinelli maintain exclusivity through controlled distribution, while Bain & Company in February 2025 emphasised the need for supply chain transformation. LVMH’s AI strategy, reported by The Wall Street Journal in June 2025, and Saks Global’s personalisation efforts, covered by Vogue Business in August 2025, illustrate the sector’s embrace of technology. Reports from BoF and Vogue Business in March 2025 underscore the importance of cultural adaptation in China and India, while Forbes in July 2025 showcased the role of experiential retail in sustaining emotional engagement and loyalty.

The paradox of luxury retail: reconciling emotion and global hypergrowth

What: Omnichannel strategies are redefining customer loyalty by unifying digital and physical retail experiences, operational excellence, and brand values.

Why it is important: Integrating omnichannel strategies with operational excellence is crucial for maintaining competitiveness and meeting evolving consumer demands, as highlighted in recent industry analyses.

Retailers are increasingly compelled to deliver seamless, consistent experiences across all channels to regain and sustain customer loyalty. The evolution from simply multiplying touchpoints to creating coherent, unified journeys reflects a shift in consumer expectations, where convenience and quality of experience are inseparable. Today’s shoppers, especially younger and more affluent demographics, fluidly navigate between digital and physical environments, demanding the same level of service and transparency at every interaction. Persistent frustrations such as stockouts, unclear delivery timelines, and complicated returns can quickly erode trust, making operational execution—particularly real-time inventory management—essential for loyalty. Moreover, loyalty is now shaped by a brand’s ability to embody transparency, responsibility, and values that resonate with consumers, including environmental and social commitments. Retailers who successfully unify their data, operations, and channels around a single, reliable promise are best positioned to offer the personalised, sustainable commerce that today’s consumers expect, ensuring long-term viability in a competitive landscape.

IADS Notes: The retail industry’s focus on omnichannel strategies is fundamentally transforming customer loyalty, as seen in May 2025 and April 2025, according to Inside Retail. The integration of digital and physical experiences is advancing through unified “phygital” models and smart store technologies, highlighted in October 2025 by Fashion Network, January 2025 by Journal du Net, and August 2025 by ET Retail. Operational excellence, especially in inventory management and AI-driven supply chain optimization, is driving profitability and trust, as reported in October 2025 by Zebra, January 2025 by Journal du Net, and February 2025 by Journal du Net. At the same time, brands that demonstrate transparency and sustainability are gaining a competitive edge, as evidenced in October 2025 by ESG Dive, February 2025 by Euromonitor, and April 2025 by Forbes. Unifying data and operations for consistent, personalized commerce is setting new standards, as shown in August 2025 by Forbes, September 2025 by Journal du Net, and March 2025 by Inside Retail.

Leveraging omnichannel to win back consumer loyalty

What: Employers are rethinking and reframing DEI strategies, with SHRM’s recent moves highlighting the tension between maintaining inclusion and adapting to new political and regulatory realities.

Why it is important: The reframing of DEI strategies highlights the need for retailers to balance compliance, stakeholder trust, and authentic workplace culture, reflecting trends identified in recent Notion sources.

SHRM’s recent approach to DEI, marked by a shift from “equity” to “civility” and “inclusion,” exemplifies a broader trend among employers who are reassessing their diversity strategies in response to a complex legal and sociocultural environment. The organisation’s public conversations and program changes have sparked both criticism and support, reflecting the divided perspectives among HR professionals and business leaders. While some see the move as a retreat from the principles of equity, others view it as a necessary adaptation that still values inclusion and psychological safety. This nuanced approach is echoed in the retail sector, where companies are increasingly weighing their values and risk tolerance before implementing structured DEI programs. The article underscores that there is no universal solution for fostering belonging at work, especially as employers navigate heightened scrutiny and shifting expectations. Ultimately, the future of DEI in retail and beyond will depend on each organisation’s willingness to balance evolving compliance demands with authentic commitments to inclusion and respect.

IADS Notes: The current debate over the future of DEI in the workplace, as highlighted by SHRM’s evolving stance, mirrors a broader transformation within the retail industry since late 2024. Major retailers like Walmart and Amazon have strategically shifted away from explicit DEI language, instead emphasising inclusion and belonging, a move that has yielded strong market performance and helped navigate mounting political and legal pressures, as reported by Vogue Business in March 2025 and Retail Dive in February 2025. The adoption of the FAIR framework, prioritising fairness, access, inclusion, and representation, offers a pragmatic alternative to traditional DEI models, according to Retail Dive in February 2025. Despite high-profile setbacks such as Target’s $10 billion valuation loss and significant morale declines at companies that have cut DEI programs, as noted by ESG Dive in July 2025, most employers are opting for nuanced adjustments rather than wholesale abandonment of inclusion efforts, a trend confirmed by ESG Dive in May 2025. The retail sector’s experience underscores the importance of balancing regulatory compliance, stakeholder expectations, and authentic workplace culture, with data from early to mid-2025 showing that companies maintaining genuine inclusion commitments are better positioned for talent retention and business resilience, as discussed in From Day One in January 2025. This evolution demonstrates that while terminology and structures may change, the underlying imperative for equitable and inclusive workplaces remains strong.

DEI divide: Where do we go from here?

What: Brands are leveraging technology and community engagement to transform the second-hand market into a profitable and trusted retail channel.

Why it is important: This development highlights how brands can capitalize on the second-hand market to reinforce their reputation and unlock new revenue streams, as documented in the past year.

The second-hand market has evolved from a peripheral trend into a strategic lever for brands, fundamentally reshaping retail dynamics. As economic pressures and shifting consumer values drive more shoppers toward resale, brands are compelled to address the challenges and opportunities this presents. Counterfeiting remains a significant threat, eroding trust and damaging brand reputations, especially when consumers hold brands accountable for inauthentic goods. To combat this, brands are increasingly adopting digital certificates and product passports, ensuring authenticity and transparency throughout the product lifecycle. These technological advancements not only protect against fraud but also enable brands to offer enhanced services, such as extended warranties and certified resale, deepening customer relationships. By integrating second-hand buyers into their communities and leveraging loyalty programs, brands are turning post-purchase experiences into ongoing engagement and value creation. The result is a more resilient, transparent, and profitable retail ecosystem, where trust and authenticity are central to both brand strategy and customer experience.

IADS Notes: Recent industry coverage confirms the article’s core arguments. In December 2024, Retail Asia and Financial Times both highlighted how economic pressures and evolving consumer values are pushing second-hand retail from a marginal trend to a central business model, with projections for rapid market growth and profitability challenges. Inside Retail’s reporting from February and June 2025 detailed the cultural and economic transformation of second-hand shopping in Australia and China, emphasizing the shift in consumer psychology and the restructuring of luxury retail dynamics. The persistent threat of counterfeiting and its impact on brand trust was underscored by Inside Retail and WWD in June and September 2025, as brands face mounting pressure to protect their reputations. The Robin Report in November 2025 and Journal du Net in April 2025 explained how digital product passports and certification platforms are becoming essential tools for transparency and lifecycle management, driven by new EU regulations. Finally, Fashion Network and Inside Retail in May and September 2025 documented how brands are integrating second-hand buyers into their communities, using loyalty programs and engagement strategies to foster long-term relationships and unlock new economic opportunities.

Second-hand: from the blind spot to the brand lever

What: ChatGPT is driving significant referral traffic to Walmart and other retailers, while Amazon restricts AI access to protect its advertising revenue.

Why it is important:  The embrace of AI by Walmart and resistance by Amazon reflect broader trends in retail innovation and risk management.

The debate over whether ChatGPT is helping or hurting Amazon and Walmart reflects a broader transformation in retail, as AI-driven referral traffic begins to reshape how consumers discover and purchase products online. Recent studies from October 2025 indicate that while ChatGPT is generating increasing referral traffic for major retailers, conversion rates remain low compared to traditional channels, underscoring persistent barriers to AI adoption. Walmart’s strategic embrace of AI, highlighted by its landmark partnership with OpenAI and the rollout of features like Instant Checkout, positions it at the forefront of this shift, leveraging AI-generated traffic to enhance both online and in-store experiences. In contrast, Amazon’s protective stance toward its advertising-driven business model reveals concerns about the potential erosion of high-margin ad revenue if consumers migrate their product searches to AI chatbots. Industry analysis from November 2025 underscores the urgency for retailers to adapt their digital strategies, as the rise of agentic commerce and AI-mediated shopping journeys threaten to upend established models of customer acquisition and engagement. The contrasting approaches of Amazon and Walmart illustrate the divergent paths retailers may take as they navigate the opportunities and risks of an AI-first retail environment.

IADS Notes:  The debate between Amazon and Walmart over ChatGPT’s role in retail mirrors broader trends observed in the past year. In November 2025, the Financial Times highlighted how generative AI is shifting power from traditional e-commerce to AI platforms, raising concerns about data and customer relationships. Walmart’s October 2025 partnership with OpenAI for Instant Checkout demonstrates proactive adaptation, while September 2025 analysis from Inside Retail emphasizes the urgency for brands to optimize for AI-driven discovery. Despite these innovations, October 2025 research from Digiday notes persistent challenges with conversion rates and consumer trust, and August 2025 coverage from Modern Retail raises questions about market fairness as AI becomes a direct sales channel.

Is ChatGPT helping or hurting Amazon and Walmart? They disagree

What: Investment in AI across industries is accelerating, but only a minority of businesses have managed to scale these technologies effectively.

Why it is important: The situation reflects a broader challenge for industries to balance rapid technological adoption with sustainable, customer-centric growth.

As AI investment continues to surge across sectors, businesses face mounting pressure to translate technological promise into practical, scalable solutions. While capital inflows and innovation are at record highs, only a small proportion of companies have succeeded in scaling AI effectively, revealing a persistent gap between ambition and execution. This disparity is particularly evident in industries like retail, where the majority of firms report increased revenue from AI adoption, yet struggle with operational hurdles, cybersecurity, and the complexities of integrating new technologies into core processes. The influx of venture capital into AI-driven startups has intensified the focus on customer value and demonstrable returns, as market volatility and the threat of a potential bubble burst loom large. Companies that prioritize customer-centric strategies, agility, and proof of ROI are better positioned to weather economic uncertainty and maintain relevance. Ultimately, the challenge for all industries is to ensure that rapid technological adoption is matched by sustainable growth and genuine business impact.

IADS Notes: As highlighted by Sifted in February 2025, the retail sector exemplifies this trend, with 87% of companies implementing AI seeing revenue gains but only a minority achieving scale due to operational and cybersecurity challenges. BCG’s January 2025 analysis and Bain & Company’s September 2025 report both underscore the need for tangible ROI and scalable solutions, while Modern Retail and Fashion Network in 2025 emphasize the importance of customer-centric strategies and community engagement. These findings collectively illustrate the broader industry imperative to align innovation with sustainable, customer-focused growth.

What to do when the AI bubble bursts?

What: Agentic AI is driving a fundamental transformation across industries, reshaping operations, management structures, and investment strategies.

Why it is important: The widespread adoption of agentic AI highlights the need for new management and investment approaches, aligning with trends seen in recent reports.

The latest BCG and MIT Sloan Management Review report reveals that agentic AI is rapidly redefining the boundaries between technology and human work, compelling organizations to overhaul their operational and strategic frameworks. Unlike traditional tools, agentic AI systems act as autonomous collaborators, capable of planning, learning, and adapting, which forces executives to rethink workflows, governance, and talent management. This dual nature introduces new tensions—balancing scalability with adaptability, supervision with autonomy, and incremental improvements with transformative change. The report finds that many organizations are adopting agentic AI faster than they can develop coherent strategies, risking missed opportunities for differentiation and value creation. As hierarchies flatten and managerial roles evolve, the need for continuous learning and upskilling intensifies for both humans and AI systems. Investment strategies are also shifting, as agentic AI appreciates with use and demands ongoing reinvestment. Ultimately, the report concludes that success hinges on breaking down silos and orchestrating effective human-AI collaboration, positioning agentic AI as a catalyst for innovation, efficiency, and sustainable growth. 

IADS Notes: The rapid adoption of agentic AI is fundamentally reshaping operational efficiency, workforce structures, and investment strategies. As highlighted in "AI agents, a promise of revolution for store supply" (February 2025) and "The next retail shake-up: AI agents that redefine your job" (October 2025), AI agents are transforming business functions and driving productivity gains. However, these advances require organizations to rethink workflows and governance, as noted in "Seizing the agentic AI advantage" (July 2025) and "Retail: When Agentic AI boosts humanity and customer satisfaction" (July 2025). The transformation extends to managerial roles, with major companies like Amazon eliminating thousands of middle management positions in March and October 2025. This evolution demands continuous learning and upskilling, as seen in "AI is moving faster than your workforce strategy. Are you ready?" (September 2025). Strategic investment is also evolving, with "Alibaba to invest more than USD 52 billion in AI over next 3 years" (February 2025) and "AlixPartners launches AI profit engine" (April 2025) illustrating the scale of commitment required for AI-driven transformation.

Leading in the age of AI agents: Managing the machines that manage themselves - article 

The emerging agentic enterprise: How leaders  must navigate a new age of AI - full report

What: Fashion brands are navigating trade disruptions, AI-driven transformation, and evolving consumer demands for value and sustainability.

Why it is important:  These shifts mirror recent industry trends, with tariffs, AI, and resale strategies fundamentally altering retail business models.

The State of Fashion 2026 report highlights how fashion brands are contending with a rapidly changing landscape defined by trade disruptions, technological advancements, and shifting consumer expectations. US tariffs have forced companies to rethink sourcing and pricing strategies, while supply chain disruptions and rising costs are prompting a renewed focus on efficiency and sustainability. Artificial intelligence has moved from being a competitive advantage to a business necessity, driving workforce transformation and requiring brands to upskill employees and attract new talent. As AI reshapes both internal operations and the customer journey, brands must adapt their digital marketing and e-commerce infrastructures to remain visible and relevant. Consumer behaviour is also evolving, with a growing emphasis on value, wellbeing, and self-expression, fueling the rise of categories like jewellery and smart eyewear. The mainstream adoption of resale and secondhand fashion reflects broader economic and environmental concerns, pushing brands to develop new business models. In this challenging environment, only agile companies capable of responding to these systemic shifts will secure growth and market share. 

IADS Notes: The State of Fashion 2026’s themes are reinforced by recent industry developments. In March 2025, the impact of US tariffs led to major supply chain restructuring and operational changes for brands, while sustainability commitments faced new pressures (“How a global trade war could rewire the way fashion operates,” Vogue Business, March 2025; “As tariffs cause chaos across fashion’s supply chain, what happens to sustainability?” Vogue Business, March 2025). AI’s rapid integration into retail, highlighted in September and March 2025, has driven measurable gains in productivity and customer service, though workforce readiness remains a concern (“AI is moving faster than your workforce strategy. Are you ready?” BCG, September 2025; “Redefining productivity in retail,” Forbes, March 2025). Shifting consumer priorities toward value, personalization, and sustainability, as seen in late 2024 and September 2025, are accelerating the adoption of resale and secondhand strategies, with notable growth in these segments throughout 2024 and 2025 (“Gen Zs want ‘chaotic customisation’ in 2025. How can brands tap in?” Vogue Business, November 2024; “The business of second-hand clothing is booming,” The Economist, March 2025).

BoF’s State of Fashion 2026: US tariffs, AI adoption, and shifting consumer values

What: Empathy is emerging as a critical factor in customer loyalty and growth, with most consumers willing to pay more for brands that demonstrate genuine care.

Why it is important: This shift aligns with recent trends in retail, where emotional connection and personalized experiences are driving the evolution of loyalty programs.

Empathy has become a decisive element in shaping customer loyalty and driving business growth, as shown by a global survey of nearly 12,000 consumers across 11 countries. The majority of respondents indicated that a brand’s ability to demonstrate empathy is more influential in their purchasing decisions than online reviews or personal recommendations, with 61% willing to pay a premium for brands that show genuine care. Despite this, 78% of consumers feel that companies do not exhibit authentic empathy, and over 40% have abandoned brands due to this shortfall. The article highlights the need for organizations to embed empathy into their operational infrastructure, using tools like journey mapping and leadership-driven initiatives to address customer pain points. Upskilling employees in empathy, as demonstrated by Zurich Insurance Group’s extensive training program, has led to measurable improvements in customer satisfaction and loyalty. As AI becomes more prevalent in customer interactions, the challenge for retailers is to combine digital efficiency with authentic human connection, ensuring that empathy remains at the core of the customer experience.

IADS Notes: The retail industry’s focus on empathy is reflected in recent developments, with leaders from Selfridges, Lane Crawford, and Nykaa at the World Retail Congress in May 2025 stressing the importance of authentic human connection alongside technological innovation. Luxury department stores are shifting from transactional loyalty programs to those that prioritize personalized, empathetic service, as highlighted in Inside Retail in May 2025. BCG’s December 2024 analysis confirms that traditional loyalty programs are losing relevance as consumers seek more meaningful, experience-driven engagement. Retailers are also drawing lessons from the airline industry’s focus on emotional connections, as discussed in April 2025, while Selfridges’ Unlocked program in August 2025 exemplifies the trend toward rewarding both spending and participation, underscoring the centrality of empathy and personalization in modern retail loyalty.

Customers expect empathy. Here’s how to deliver it.

PRINTABLE VERSION HERE 

In the era of multiple systemic challenges affecting the world, the term ‘polycrisis’ has been repopularised by former European Commission president Jean-Claude Juncker and historian Adam Tooze. The utility of the term lies in mapping disparate shocks, that cannot be reduced to a single common denominator, interacting to create a shock more overwhelming than the sum of all individual shocks. In the wake of the COVID-19 pandemic and its long-lasting impacts, economic shocks around the world, Russia’s full-scale invasion of Ukraine, and the spiralling consequences of climate change, the diversity of problems is compounded by insufficient economic and social development for policy, business and individual decision-makers.

Given this context, the IADS undertook internal research to understand how department stores most severely affected by economic and geopolitical crises manage their operations. This exclusive combines the learnings of our exchanges with strategic teams responsible for guiding company activities. Despite the varying natures of crises, the IADS found that the priorities and critical goals for these department stores remain similar in contextually relevant manners. In one line, cash is king and the priority order is people, assets and operations.

Crisis management models: iterative vs. protocol-driven

Crises are rarely identical. While uncertainty permeates all kinds of crises, the source and evolution dictate how stakeholders respond. Department stores have faced a range of crises including full-scale invasions and currency crises, some at the periphery with others at the epicentre, and developed unique crisis models. According to research conducted by the IADS, the types of strategies used can be broadly divided into iterative models, where recovery plans use continuous cycles of evaluation and improvement as situations evolve, and protocol-driven models, that use predefined procedures and clear roles to guide organisations in managing crisis situations.

While adaptability is key in any crisis, iterative models are used by department store companies in volatile situations with little preparation, however, without widespread imminent physical danger. Especially evident in situations where they operate in turbulent political environments, strategic guidelines prove more useful than protocols to respond to new developments flexibly. The level of crisis management experience of decision-makers plays a factor as well.

Protocol-driven models are more common in situations where physical danger to people and assets looms. In the face of airborne incursions and national defence efforts, comprehensive and efficient evacuation protocols for staff, tenants and visitors are foundational for physical safety. Protocols designed to secure the store, inventory and other assets are next. Facing constant uncertainty for extended periods of time gives rise to a new operational status quo that requires updated operating mechanisms. The key necessities in such situations are to identify warning signs that signal the onset of larger crises and focus on recording organisational responses that can be refined over time to develop thorough standard operating procedures.

Liquidity equals lifeblood

The unanimous principal lesson is that managing the company’s cash ensures that the business survives daily. Steep currency devaluation and subsequent inflation are almost always a consequence of considerable crises and need to be managed by every economic actor in the nation. Monetary erosion is normally managed at the government level and percolates down to businesses and individuals. During times of crisis, regulations around currency arbitrage and investment are stricter to meet political goals. Provided banks continue to exist, companies can manage currency devaluation by converting domestic currency to a more stable currency in line with other regulations.

Department stores have employed innovative measures to keep themselves afloat. Heavily indebting a company in the extremely devalued local currency to eventually convert into a more stable currency to repay banks and suppliers, thus transitioning into a financial business, was one of the techniques used. Additionally, collaborating with providers from other, more restricted industries (in one case, the insurance industry) to buy and sell financial bonds was another method to maintain liquidity. Fundamentally, cash is a bargaining chip to find other manners of funding through loans, bonds and financial securities within exceptionally stringent legal limits.

People during crisis: Staff, partners and leaders

There is a consensus about people being the most important resource to address at the onset of a crisis. However, depending on the nature of the crisis and stakeholders, priorities for human resources can range from talent retention, physical safety, and adapted management techniques to the business’ transition to a social unit, among others.

During a crisis, businesses often pivot from pure profit-seeking to a more socially cohesive role, uniting employees, customers, and communities around shared resilience because collaboration and mutual support become essential for survival. Some retailers undertook initiatives such as distributing cash bonuses and paying advance salaries for employees to manage their personal situations. Staff measures depended on urgent imperatives: when retaining employees was the need, companies offered financial, non-financial (such as cars and houses) and personal (such as admission to schools for their children) incentives in individual compensation packages. In other cases, retailers helped employees relocate to safer parts of the country at no expense, as well as provided power banks, headsets, and other operational tools necessary for remote operations. For employees involved in national security operations, companies continued to pay full salaries for three years in some cases.

Continued communication within teams during a crisis is crucial. Some  department stores purchased satellite phones for senior executives to combat power outages and maintain connectivity. Keeping employee motivation up in times of crisis is important for their mental health and performance. Advocacy initiatives and collaborations with civil society can rally employees around a unifying purpose, turning uncertainty into renewed motivation and collective resilience.

Another aspect of people management is the relationship with partners, tenants and suppliers. Extensive negotiations are a given to arrive at universally acceptable decisions. Complications arise when partners have different policies than the department store in crisis situations requiring relocation of inventory. Specific store teams coordinate with partners, suppliers, brands, and tenants to access their inventory during crises. Emphasising transparent communication and commitment to cooperation, some retailers have managed to preserve all their longstanding collaborations while adding new partners. However, despite the best efforts, others have lost partners and suppliers who quit the market due to the larger political and economic instability.

Finally, all teams emphasised the importance of strong leaders’ over preparedness and decisiveness. All leaders require a combination of mental resilience, clarity, and strategic foresight. They should focus on issues they can impact while recognising factors beyond their control. Making tough choices is an inherent part of leadership and should be guided by the long-term well-being of the company and its stakeholders. Both the leader and the team must remain agile and ready to adapt swiftly when plans no longer align with changing circumstances. Trust within the team is paramount for strong collaboration, and transparent communication is essential to foster alignment, minimise misunderstandings, and strengthen overall cohesion.

Shielding stores and inventory during disruptions

Department stores’ management of their key assets, buildings and owned stock, is the second-most important priority after people’s safety. In times of acute crisis, physical protection of assets encompasses securing the façade, internal maintenance systems such as heating, water, and electricity, as well as entrances and windows. Compounded by widespread chaos, the risk of thievery, rioting and squatting increases. Some retailers have dedicated, protocol-driven teams that work to secure the building and even live onsite on a rotational basis to counter hostile activity.

In other situations, the threat to assets may not be physical but economic. In cases of currency crisis and hyperinflation, the devaluation of inventory can make stock almost worthless, with government-imposed price cuts having the same effect. A large divergence between the market exchange rate and a government-fixed one further complicates the situation. While the price cuts briefly increased sales, cash flow fell, resulting in unpaid suppliers and exhausted stock. While the product mix remained similar to the pre-crisis situation, this drove a shift in the brand mix. A basic strategy to ensure that products would be sold was mapping key product features to ensure that they were affordable and necessary for customers. For instance, for fashion products, the criteria necessary for their customer base were: under USD 30, exclusive brands, quality, and differentiated from the market. Meeting these requirements reflected a great sell-through rate for this category.

In countries experiencing political instability, there is a risk that government actions may lead to capital expropriation. Remaining politically neutral can keep a company out of the limelight and at a distance from the threat of state takeover.

Pertinent operational continuity: Handling energy and supply chain shocks

Operational continuity depends on the specific nature, scale, and timing of a crisis, requiring adaptable plans that may range from protecting supply chains during a pandemic to reinstating critical systems after an energy outage. A variety of strategies to continue operations can be used. In some cases, department stores reduced the number of stores operated, maintaining only profitable stores. Even during challenging times, department stores continued to make small investments that could have big payoffs when the situation improves, notably in enhancing online operations via marketplaces.

Energy crises are one of the primary challenges during pervasive emergencies. Some dealt with this by implementing a series of operational protocols to optimise electricity consumption during power disruptions. These included reducing energy usage in sales areas by managing lighting, turning off façade lighting during non-peak hours, installation of a diesel generator to maintain operations during emergency power outages, and introduction of start/stop systems on escalators to reduce energy consumption. Installing solar panels on the rooftop enabled clean energy generation, resulting in a 10% reduction in overall electricity consumption, driving long-term operational efficiency sustainably. Mapping the citywide electric network allowed the department store to switch between electricity lines when necessary.

Shocks such as the war in Ukraine impacted companies’ supply chains worldwide, requiring realigned sourcing and logistics strategies, not only around the conflict’s immediate theatre but across entire global networks. To overcome disrupted global sea and air logistics, some retailers shifted to freight transportation for their international supply chains. This has resulted in increased logistics costs and a rise in fuel prices, but a more diverse mix of goods to meet growing demand. The loss of suppliers is almost inevitable, especially when driven by volume reduction due to currency collapse. Department stores coped by simulating purchases from brand headquarters to balance smaller quantities, a larger mix and affordability for customers.

Advertising and customer communication shifted as well. In some cases, all marketing initiatives were stopped to avoid being very visible in the public eye due to the risk of political targeting. Slowly restarting with in-store and social media advertising, the messaging focuses on being quality-oriented to regain customers’ top-of-mind space. Credit initiatives and promotions were also stopped in countries facing extreme currency collapses and high exchange rates. Selling merchandise each day is indispensable since cash flow keeps the business going.

Forward watch and the impact of Trump  

Global geopolitical developments, especially the election of US President Donald Trump, are being watched apprehensively by entire populations as his policies have introduced a new wave of changes. Impending tariffs and potential sanctions can upend several business continuity operations during ongoing crises. 

Amid multiple systemic crises, intensified by global upheavals and an overarching polycrisis, these insights have been distilled from retailers operating at the epicentre of these events. The IADS aims to lead members into strategic thinking avenues that may not have been addressed before in the face of growing geopolitical and economic uncertainty. While members surely have their own crisis management strategies and teams, learnings from department stores already confronted with profound and overlapping political, economic and security shocks can provide incomparable insight to sharpen and solidify their own playbooks. The commendable resilience and ingenuity shown by those already navigating crises offers a valuable benchmark, prompting others to reflect on and strengthen their own crisis management practices. 

Credits: IADS (Anchita Ranka)

What: Lululemon partnered with Redress to launch a take-back and resale scheme in Hong Kong, combining operational rigour with community engagement to promote circular fashion.

Why it is important: The partnership demonstrates how operational innovation and nonprofit collaboration can drive scalable circular models, as seen in recent retail developments.

Lululemon’s collaboration with Redress in Hong Kong marks a significant step in the evolution of circular retail, as the two organisations piloted a comprehensive take-back and resale program across four stores. Over five months, more than 3,800 garments were collected, meticulously sorted, and either repaired, resold, or donated, ensuring minimal waste and maximum product lifecycle extension. The initiative unfolded in two phases: first, a take-back activation incentivised customers to return gently used items in exchange for vouchers; second, a Like New pop-up event transformed the backend process into a vibrant community experience, featuring curated resale racks and interactive upcycling workshops. This approach not only tested the operational feasibility of circularity in a market with complex attitudes toward secondhand goods but also fostered cultural change by engaging consumers in creative reuse. The pilot’s success underscores the necessity of robust infrastructure, nonprofit partnerships, and consumer education in scaling circular retail, positioning Hong Kong as a valuable testing ground for broader adoption in Asia and beyond. 

IADS Notes: The Lululemon and Redress initiative, as reported by Inside Retail in November 2025, exemplifies the retail sector’s shift toward scalable circular business models. The Retail Bulletin in March 2025 highlighted the growing importance of circular strategies, while the Kearney CFX report in Fashion Network (July 2025) and Drapers’ coverage of John Lewis (October 2025) both emphasized the operational and collaborative challenges of scaling such models. Retail Asia’s December 2024 report on the rise of secondhand shopping further confirms the relevance of these developments, showing that the Lululemon-Redress pilot is part of a global movement transforming retail’s future.

How Lululemon and Redress are experimenting with circular retail in Hong Kong

What: Despite economic pressures, Diptyque’s luxury candles continue to sell out due to their compelling narrative, craftsmanship, and aesthetic appeal.

Why it is important: The success of Diptyque reflects a broader shift toward community-driven engagement and exclusivity in luxury retail, as seen in recent reports.

Diptyque stands out in the luxury retail landscape by maintaining strong demand for its high-priced candles, even as consumers become more cautious with discretionary spending. The brand’s enduring appeal is rooted in a blend of authentic storytelling, artisanal craftsmanship, and distinctive design, which together create a powerful emotional connection with its customers. Rather than relying on traditional logic or price-based competition, Diptyque cultivates a sense of belonging and aspiration through its evocative backstory, unique scent compositions, and instantly recognizable visual identity. This approach has enabled the brand to thrive amid rising competition from both luxury entrants and budget “dupe” brands, as well as to capitalize on the growing consumer focus on wellness and home environments. Diptyque’s strategy demonstrates that in today’s retail environment, building a world around the product and fostering emotional engagement can be more effective than discounts or rational selling points, setting a benchmark for others in the industry. 

IADS Notes: Diptyque’s success is mirrored by industry observations such as Breuninger’s collaboration with Monocle (September 2025, Monocle), which leveraged experiential storytelling to deepen engagement, and Inside Retail’s September 2025 analysis highlighting the shift toward exclusivity and authentic narratives as drivers of loyalty. LUXUS PLUS (March 2025) further confirms that brands focusing on controlled scarcity and genuine philosophy outperform those chasing trends, reinforcing the value of emotional connection and belief in luxury retail.

What retailers can steal from Diptyque, the US$400 candle that defies logic

What: Selfridges is expanding its retail media business by partnering with Disney for a Christmas campaign and targeting non-endemic brands to leverage its in-store and digital assets.

Why it is important: The move demonstrates how luxury department stores are leveraging data, immersive experiences, and strategic partnerships to remain competitive and drive growth.

Selfridges is accelerating its retail media ambitions by launching a high-profile Christmas campaign in collaboration with Disney, utilising nearly all of its in-store and digital media assets. This initiative marks a significant shift as Selfridges actively seeks partnerships with non-endemic brands—those not traditionally stocked in its stores—to tap into its vast annual customer base. Under the leadership of Kate Eastop, the retailer has engaged media advisor Sonder to develop a comprehensive rate card for its media assets, ensuring proper valuation and internal alignment on future partnerships. The strategy is to prioritise deep, mutually beneficial collaborations that enhance the customer experience without diluting the brand’s value. Industry experts from Sonder highlight that luxury retail environments, with their immersive “retail theatre” experiences, offer brands greater engagement opportunities compared to transactional retail settings. As the market for retail media matures, Selfridges’ approach positions it as a serious player, balancing innovation with sustainability and setting a benchmark for the next wave of growth in luxury retail media

IADS Notes: Selfridges’ retail media strategy, as reported by WWD and Fashion Network in January and October 2025, aligns with a sector-wide shift toward exclusive collaborations and immersive experiences to drive new revenue and customer engagement. MBS in July 2025 underscores retail media’s growing impact on retailer margins and advertising spend. Breuninger’s expansion into retail media, highlighted by Monocle and press releases in September 2025, mirrors this trend, while Retail Detail and Harvard Business Review in June and October 2025 emphasise the importance of transparent measurement and standardised KPIs. Inside Retail in May 2025 notes that programs like Selfridges’ ‘Unlocked’ are redefining loyalty by rewarding both purchases and experiential engagement, reflecting the industry’s pivot toward sustainable, value-driven growth.

The rise of luxury retail media: Selfridges, Disney combine for unprecedented retail media Xmas

What: AI is transforming retail by moving from customer-facing tools to back-end operations, driving efficiency, compliance, and resilience.

Why it is important: AI-driven operational visibility and risk management are becoming essential for maintaining customer trust and resilience, building on insights from the past year.

AI’s role in retail is undergoing a decisive transformation, shifting from visible, customer-facing applications to the foundational layers of operations. This evolution is redefining how retailers approach fulfilment, packaging, risk management, and regulatory compliance. By integrating AI into back-end systems, retailers are addressing structural bottlenecks that previously eroded trust and reduced margins, especially during periods of peak demand. The ability to convert fragmented packaging data into structured, actionable assets is enabling brands to meet new environmental regulations and accelerate innovation. As extreme weather and environmental risks become more frequent, AI is also providing the predictive capabilities necessary for smarter routing, proactive warehouse decisions, and operational continuity. These advancements are not just about efficiency; they are about preventing failures that can undermine customer confidence. The future of retail will be shaped less by what AI says to consumers and more by the operational stability and trust it quietly ensures behind the scenes. 

IADS Notes: The evolution described aligns with recent findings from Forbes and Zebra (March and October 2025), which highlight measurable gains in profitability and efficiency from AI-driven operations. BCG and The Robin Report (April and November 2025) confirm that regulatory changes are pushing retailers to treat packaging data as a structured asset, while Forbes and Chainstore Age CSA (January and February 2025) demonstrate AI’s growing role in risk management and supply chain resilience. Harvard Business Review and Journal du Net (March and July 2025) further emphasize that responsible, transparent AI integration is key to building customer trust and satisfaction in this new operational landscape.

Why AI belongs behind the scenes of modern retail

What: CMOs are evolving from campaign managers to enterprise-wide transformation leaders by harnessing AI to connect data, drive growth, and break down organisational silos.

Why it is important: The move toward enterprise-wide AI integration highlights the need for robust governance and upskilling, echoing challenges and successes reported by BCG and The Retail Bulletin in the past year.

The role of the CMO is undergoing a fundamental transformation, shifting from a focus on brand stewardship and campaign management to becoming a central architect of enterprise-wide growth. AI is at the heart of this evolution, empowering CMOs to connect disparate data sources across marketing, supply chain, finance, and R&D, thereby breaking down traditional organisational silos. This interconnected approach enables faster, more holistic decision-making and links marketing actions directly to business outcomes. However, while AI offers the promise of automated personalisation and operational optimisation, its full potential can only be realised when organisations address the politics of data sharing and invest in robust governance frameworks. The need for cultural change is clear, as only a minority of retailers have successfully scaled AI initiatives, and many still face challenges related to data security and workforce readiness. Ultimately, the CMO’s new mandate is to orchestrate company-wide transformation, ensuring that AI-driven strategies are both innovative and sustainable.

IADS Notes: The transformation of the CMO role in retail, as envisioned in the BCG article, is already materialising across the industry, with BCG reporting in June 2025 that CMOs are increasingly seen as growth architects leveraging GenAI to drive measurable business impact. According to BCG, 83% of CMOs expressed optimism about GenAI, and 87% of retailers implementing AI reported revenue increases of at least 6%, highlighting the tangible benefits of enterprise-wide AI adoption. This evolution extends beyond marketing, as WWD in November 2024 described AI-powered solutions breaking down operational silos in merchandise planning, while BCG noted Walmart’s integration of 850 million product data points to optimise supply chain functions. However, the journey is not without challenges, particularly in data governance and cybersecurity, with The Retail Bulletin in August 2025 revealing that only 18% of retailers possess mature digital core security, and high-profile breaches continue to threaten business continuity. The automation of personalisation and content creation has become a competitive necessity, as Inside Retail in March 2025 reported that 71% of consumers expect tailored experiences and retailers are deploying AI-driven solutions to meet these demands. Ultimately, BCG in July 2025 emphasised that only 10% of retailers have successfully scaled their AI initiatives, underscoring the need for leadership, workforce upskilling, and robust governance frameworks to achieve sustained transformation.

Imagine this... How will AI revamp marketing—and the role of CMOs?

What: Only a minority of retailers are successfully scaling AI, despite widespread adoption and urgent workforce challenges.

Why it is important: The ongoing struggle to scale AI in retail demonstrates the need for continuous investment in upskilling, infrastructure, and governance.

The article examines the fragmented approach US states are taking toward AI readiness, emphasising the necessity of a coordinated strategy that includes workforce upskilling, industry adoption, innovation clusters, and research and development. This mirrors the current state of the retail sector, where AI adoption is high but effective scaling remains limited to a minority of companies. Retailers face significant challenges, particularly in upskilling their workforce and overcoming infrastructure and compliance barriers, with only 36% of employees feeling prepared for AI-driven changes. Major players such as Amazon and Target have responded to these pressures with substantial job cuts and reskilling initiatives, reflecting the sector’s shift toward automation and new talent strategies. Despite these challenges, leading innovators are leveraging AI to drive product innovation and outperform competitors. Still, the sector as a whole continues to grapple with regulatory complexity and the need for robust governance. The convergence of these trends highlights the critical importance of sustained investment in people, technology, and policy to ensure resilience and growth in the AI era. 

IADS Notes: As reported by BCG in September 2025, foundational skills were identified as central to retail workforce adaptability, with only 36% of workers feeling prepared for AI-driven change. Forbes highlighted in October 2025 that Amazon’s layoffs underscored the sector’s rapid move toward automation. Additional research from BCG and Deloitte throughout 2025 confirmed that only a minority of retailers have successfully scaled AI, despite widespread adoption. These sources collectively emphasise the ongoing need for systematic upskilling, robust governance, and investment in innovation, as leading companies continue to outperform peers by integrating technology and talent strategies.

Are US States ready for the AI economy?

BCG: The AI Maturity Matrix - full report

What: Retailers are adapting to a prolonged Black Friday season by leveraging digital channels, targeting Gen Z, and shifting away from aggressive discounting.

Why it is important:The evolution of Black Friday highlights the need for retailers to balance digital innovation, targeted marketing, and value-driven strategies to remain competitive.

Black Friday has evolved from a single day of in-store frenzy into a multi-week, omni-channel event, fundamentally reshaping the retail landscape. Retailers now launch promotions weeks in advance, with major players like Best Buy, Target, and Walmart starting their campaigns as early as late October. This shift is driven by the growing dominance of e-commerce and mobile shopping, with online revenue surpassing $10.8 billion in 2024 and over half of digital spending occurring via smartphones. The new Black Friday playbook emphasises seamless mobile experiences, buy now, pay later options, and efficient order fulfillment, as retailers seek to meet heightened consumer expectations for convenience and value. However, macroeconomic challenges such as tariffs, federal shutdowns, and potential subsidy losses are increasing price sensitivity and complicating demand forecasting. Retailers are also intensifying efforts to capture Gen Z’s substantial spending power by investing in TikTok and influencer partnerships, recognising that this demographic’s shopping habits are reshaping marketing strategies. Meanwhile, the risks of aggressive discounting are prompting a move toward layered promotions and loyalty-driven offers, as brands aim to protect margins and long-term equity.

IADS Notes: December 2024 reports from VMSD and Techcrunch confirm the shift to a multi-week, omni-channel Black Friday, with record online sales and 55% of digital spending via smartphones. Macy’s July 2025 press release highlights the extension of Black Friday promotions into the summer, reflecting the expanded promotional calendar. October 2025 coverage in Forbes details the impact of tariffs and economic uncertainty on retail strategies, while September 2025 articles from Forbes and The Robin Report discuss how inflation and weak job growth are affecting forecasts and inventory planning. The strategic focus on Gen Z and TikTok is supported by January 2025 (Inside Retail), February 2025 (Retail Week), and October 2025 (BCG/WWD) sources, emphasizing the influence of younger consumers and digital platforms. Finally, November 2025 (Inside Retail) and July 2025 (WWD) document Macy’s and Amazon’s shift away from aggressive discounting toward more targeted, value-driven promotional strategies.

The death of the traditional Black Friday: how retailers can adapt