What: The convergence of digital currencies, AI, and instant payment networks is reshaping the retail sector’s competitive and operational landscape.

Why it is important: The integration of stablecoins, AI, and real-time payments marks a pivotal shift in retail, driving new business models and operational excellence highlighted in recent Notion reports.

The payments industry is experiencing a profound transformation as stablecoins, agentic AI, real-time payments, and platform-based merchant services converge to redefine retail operations and customer experience. Stablecoins are gaining traction among major retailers and department stores, offering near-zero transaction fees and greater accessibility, which is particularly relevant as local card schemes decline and global payment providers dominate cross-border transactions. At the same time, agentic AI is automating e-commerce processes, personalizing shopping journeys, and boosting operational efficiency, compelling retailers to adapt their engagement strategies for a machine-mediated environment. Real-time account-to-account payment networks are rapidly expanding, enabling instant, seamless transactions and opening new revenue streams, while platformization and embedded finance are fostering innovative business models and intensifying competition with traditional banks. The integration of AI and advanced analytics is further redefining productivity, with leading retailers achieving notable improvements in margins and customer acquisition costs. Collectively, these shifts are setting new benchmarks for customer experience, operational agility, and profitability, fundamentally altering the competitive dynamics of the retail sector.

IADS Notes: The adoption of stablecoins is accelerating, with major retailers and department stores embracing near-zero transaction fees and improved accessibility, as seen in January 2025 (“How stablecoins will eat payments, and what happens next”). This shift is further supported by the decline of local card schemes and the rise of global payment providers, which are reshaping cross-border transactions and driving innovation in payment solutions (October 2024, “Europe's Local Card Schemes on a Steady Decline”). At the same time, agentic AI is redefining the retail landscape, automating e-commerce transactions, personalising shopping experiences, and enhancing operational efficiency, as highlighted in September 2025 (“Agentic commerce: When AI takes control of e-commerce”). Real-time account-to-account payment networks are expanding rapidly, enabling instant, seamless transactions and unlocking new revenue streams for retailers, as detailed in the September 2025 “Global Payments Report 2025.” The move toward platform-based merchant services and embedded finance is fostering new business models and intensifying competition with traditional banks, while the integration of AI and advanced analytics is redefining productivity, with leading retailers achieving significant improvements in margins and customer acquisition costs (March 2025, “Redefining productivity in retail”). Together, these developments are not only reshaping the competitive landscape but also setting new standards for customer experience, operational agility, and profitability across the retail sector.

BCG’s Global Payments Report 2025

The future is (anything but) stable - article

Agentic AI, digital currencies and real-time - press release

What: AI hiring tools offer efficiency and speed but create new risks of bias, security vulnerabilities, and legal challenges, making human oversight and responsible governance essential.

Why it is important: As retailers increasingly adopt AI in hiring, only those who combine technological efficiency with strong human governance will achieve sustainable growth and avoid costly legal or ethical pitfalls.

AI’s integration into hiring processes promises faster screening and smarter decision-making, but recent research reveals that these tools are structurally vulnerable to manipulation and bias. Large language models, which underpin most AI hiring systems, can be exploited through prompt injection attacks, allowing malicious actors to alter candidate rankings or access confidential HR data. This “lethal trifecta” of exposure to external data, access to sensitive HR information, and external communication channels creates a uniquely precarious environment for organisations, especially in sectors like retail that depend on high-volume recruitment. Bias remains a persistent issue, with AI systems often perpetuating historical discrimination and, in some cases, enabling deliberate bias injection. Legal frameworks such as Title VII, ADA, and GDPR now intersect with these risks, exposing companies to significant liability. Despite vendor assurances, technical safeguards are insufficient, making human oversight indispensable. Retailers must prioritise comprehensive audits, cross-functional governance, and explainability to ensure that AI serves as a tool for progress rather than a source of systemic risk.

IADS Notes: Recent industry evidence shows that while AI-driven hiring tools have improved recruitment efficiency in retail by reducing work time by 16%, only a minority of retailers have successfully scaled these solutions, largely due to persistent concerns about bias and security (April, June, and August 2025). High-profile cases like Mobley v. Workday and major prompt injection attacks have highlighted both legal and reputational risks, with substantial financial losses resulting from AI vulnerabilities. Responsible AI practices, particularly those emphasizing privacy and auditability, are increasingly recognized as essential, yet most managers feel unprepared to implement them (March 2025). The sector’s experience underscores that human oversight and structured governance are critical for sustainable, trustworthy AI adoption (September 2025).
Why AI hiring tools can put recruiting leaders in the hot seat

What: Retail sales teams are evolving as AI agents automate tasks, allowing human sellers to focus on strategy, oversight, and customer relationships.

Why it is important: The balance between AI autonomy and human oversight is critical for successful implementation, supporting sustainable growth and workforce development.

Retail sales teams are undergoing a profound transformation as AI agents increasingly automate routine tasks, freeing human sellers to concentrate on strategic decision-making, oversight, and cultivating customer relationships. This shift is enabling retailers to extend high-touch, personalised service to a broader range of customers, including mid-market and long-tail segments that were previously underserved due to resource constraints. The integration of agentic AI is not only boosting operational efficiency—with many companies reporting 15-30% improvements in service metrics—but also reshaping workforce roles, requiring new skills and comprehensive training. Trust, data quality, and structured oversight have emerged as essential components, as only a minority of employees feel fully prepared for AI-driven change. Rather than replacing junior talent, AI is augmenting their roles, accelerating onboarding and supporting long-term development. The industry’s ability to balance technological innovation with human expertise will determine its resilience and success in an increasingly AI-augmented retail landscape.

IADS Notes: The transformation described in the article is strongly reflected in recent retail industry developments, as documented in Journal du Net (July 2025), Forbes (February 2025), and BCG (September 2025). Agentic AI is rapidly reshaping sales strategies, customer engagement, and workforce dynamics, with 71% of retail employees using AI weekly and companies reporting 15-30% improvements in service efficiency. This technological evolution enables retailers to extend high-touch service to previously underserved segments, including both mass and luxury markets, as highlighted by Forbes and BCG. Organizationally, human sellers are increasingly orchestrating digital AI agents, which demands new skills and comprehensive training, a trend emphasised by Journal du Net and BCG. The importance of trust, data quality, and structured oversight is paramount, as only 36% of employees feel adequately prepared for AI integration, and successful implementation depends on balancing AI autonomy with human judgment, as discussed in Harvard Business Review (January 2025) and One Useful Thing (September 2025). The evolution of junior roles is particularly notable, with AI augmenting rather than replacing talent, accelerating training and supporting long-term workforce development, as shown in Stanford Digital Economy Lab (September 2025) and BCG. These trends underscore the urgent need for retailers to blend technological innovation with human expertise to ensure operational excellence, customer satisfaction, and sustainable growth in an AI-augmented future.

Imagine this... AI agents and the “everywhere all at once” sales team

What: Cambodia’s new Techo International Airport showcases Asia’s growing focus on airport retail as a driver of tourism and economic growth, though service gaps remain.

Why it is important: Asia’s airport retail boom demonstrates how travel hubs can anchor regional tourism and retail expansion, though seamless service delivery is essential to realise their full potential.

Cambodia’s Techo International Airport exemplifies the region’s ambition to transform airports into vibrant retail and lifestyle destinations, moving beyond their traditional role as transit points. The airport offers a curated mix of international and local brands, including Aelia Duty Free, Gallery in Phnom Penh, and Artisans Angkor, alongside a variety of food and beverage options that create a mall-like atmosphere for travellers. This approach mirrors successful models in Singapore and India, where airport retail has become a key growth driver, attracting millions of visitors and delivering robust sales growth. However, Techo’s shortcomings in essential services—such as banking, telecom, and baggage handling—highlight the operational challenges that can undermine the overall traveller experience. As airports across Asia increasingly compete to capture tourism and retail spending, the ability to deliver both a compelling retail mix and seamless services will determine their long-term impact on regional economic development and brand reputation.

IADS Notes: The evolution of airport retail in Asia, as seen with Cambodia’s new Techo International Airport, reflects a broader regional trend where travel hubs are becoming sophisticated retail and lifestyle destinations. Jewel Changi in Singapore set a benchmark in January 2025 by attracting 80 million visitors and delivering 5% sales growth through a strategic mix of global brands and experiential retail (Inside Retail, January 2025). India’s Shoppers Stop followed suit in August 2025, opening the country’s largest airport department store at Delhi Airport, underscoring the strategic value of travel retail in capturing high-value consumer segments (India Retailing, August 2025). The rise of “goods getaways,” where travellers choose destinations for unique shopping experiences, has driven the global travel retail market toward a projected $121.09 billion by 2029 (Visa, February 2025). Airports now account for over 8% of global luxury retail revenue, with terminals increasingly designed for immersive, experiential shopping (The Robin Report, January 2025). Takashimaya’s April 2025 results further highlight how flagship stores in tourist destinations can drive up to 80% of sales, but also reveal the operational vulnerabilities tied to fluctuating travel patterns (Inside Retail, April 2025).

Travel retail as a growth driver: How Asia’s new international airport stacks up

What: Myer Group is restructuring its sourcing, distribution, and store operations to cut costs and drive sustainable growth following its acquisition of Apparel Brands.

Why it is important: Myer’s strategy highlights the challenges and opportunities of integrating new brands and streamlining operations to remain competitive in a shifting retail landscape.

After posting a $211.2 million statutory loss for FY25, Myer Group is embarking on a significant transformation under executive chair Olivia Wirth. The company’s new value creation program targets cost reduction and margin improvement through three main levers: direct sourcing, simplified distribution, and operational efficiency. By moving away from its complex sourcing network in Hong Kong and establishing direct relationships with manufacturers, Myer aims to lower procurement costs and enhance supply chain agility. The integration of Apparel Brands, acquired from Premier Investments, is expected to provide scale benefits and greater leverage in global sourcing negotiations. In parallel, Myer is streamlining its distribution network to reduce fulfilment costs and accelerate product flow, while operational improvements in store management and staff flexibility are intended to offset inflationary pressures. Industry experts note that while these measures are essential for margin recovery, true profitability will depend on Myer’s ability to balance cost savings with sustained revenue growth amid ongoing market challenges.

IADS Notes: As highlighted in Inside Retail (September 2024), Myer’s transformation strategy has focused on optimising its physical store network and pursuing strategic partnerships, including the merger with Apparel Brands. The executive shake-up reported by Reuters (March 2025) and the creation of new leadership roles underscore Myer’s commitment to operational efficiency and digital innovation. Inside Retail’s February 2025 analysis confirms the broader sector trend toward consolidation and omnichannel innovation, while the January 2025 article in Inside Retail emphasises the complexities and risks associated with integrating diverse brands, such as operational inefficiency and potential brand cannibalisation.

How Myer Group is cutting costs to improve margin

What: Global economic profit has rebounded to record highs, led by technology giants, capital growth in North America and China, and a resurgence in value creation across key sectors.

Why it is important: This rebound demonstrates how technology, regional capital flows, and strategic innovation are reshaping global profit pools and driving uneven recovery across regions and industries.

After years of decline, global economic profit has surged to an all-time high, reaching $1.2 trillion per year between 2020 and 2024—50 percent above levels seen in the late 2000s. This resurgence is largely attributed to the extraordinary performance of the “Magnificent Seven” technology companies, which alone generated $247 billion in economic profit, as well as robust capital growth in North America and China. While technology and digital solutions have been central to this rebound, North American consumer goods, pharmaceuticals, and industrials also contributed significantly, and Chinese companies saw strong gains in consumer products and technology. However, the recovery is not uniform: Europe’s economic profit has remained flat, and 17 percent of European companies, especially in consumer and retail, are under transformation pressure or at risk of restructuring. The energy and materials sector saw mixed results, with declines in Asia, Europe, and North America offset by gains in Latin America and the Middle East. The data underscores the importance of creating value above the cost of capital and highlights the need for strategic adaptation in a rapidly evolving global landscape.

IADS Notes: The rebound in global economic profit to all-time highs between 2020 and 2024 reflects a profound shift in value creation, driven by technology giants, capital growth in North America and China, and the rapid transformation of Asia-Pacific’s retail and consumer sectors. As highlighted by BCG in June 2025, companies are navigating a landscape shaped by technological disruption, multipolarity, and the emergence of the Global South as a powerful economic force. Visa’s January 2025 outlook confirms that global economic growth is regaining momentum, with North America and China leading the recovery, while Sifted’s June 2025 report reveals that US founders are aggressively adopting AI and scaling businesses faster than their European peers. However, the recovery is uneven: BCG’s July 2025 analysis shows that 17% of European companies, particularly in consumer and retail, remain under transformation pressure, facing margin challenges and restructuring risks. Meanwhile, Asia-Pacific’s retail sector, according to BCG in April 2025, is leveraging digital innovation and strategic risk-taking to drive growth, underscoring the region’s increasing influence on global profit pools and investment flows.
Global economic profit bounces back to an all-time high

What: Retailers and CPG firms are leveraging AI to drive faster, more effective product innovation and gain a competitive edge through end-to-end transformation.

Why it is important: The trend highlights how digital-first brands and agile players are redefining competition by leveraging AI for speed, personalisation, and first-mover advantage.

AI and GenAI are rapidly transforming the landscape of product innovation in the consumer packaged goods and retail sectors. With three-quarters of new product launches failing annually, companies are increasingly turning to AI to accelerate the innovation cycle, expand the scope of ideas, and identify concepts most likely to resonate with customers. While many firms have focused on AI for productivity and cost-cutting, the real opportunity lies in using these technologies to stimulate demand and uncover actionable consumer insights from vast, unstructured data sources. This shift is particularly crucial as inflation and agile challenger brands intensify competition, making speed and adaptability essential. AI enables faster trend detection, virtual product testing, and optimised formulation, while also automating regulatory and marketing content. However, the greatest gains are realised when companies pursue end-to-end transformation, integrating AI across the value chain and prioritising workforce upskilling. The most successful organisations invest in people and processes, recognising that technology alone is insufficient. As AI capabilities evolve, the potential for breakthrough innovation and hyper-personalised customer experiences will only grow, setting new standards for the industry.

IADS Notes: The integration of AI and GenAI is fundamentally reshaping product innovation and operational models in retail and CPG, with recent industry data confirming both the opportunities and challenges outlined in the article. As highlighted in September 2025, GenAI is driving measurable gains in supplier negotiations, assortment planning, and operational efficiency, yet only a minority of companies have managed to scale these solutions across the value chain (BCG, Sep 2025). This aligns with findings from July 2025, which show that comprehensive, end-to-end AI transformation delivers a significant performance advantage, while piecemeal adoption falls short (BCG, Jul 2025). The competitive landscape is being redefined by digital-first brands and agile players leveraging AI to spot trends and achieve first-mover status, as seen in the rise of AI-powered ecommerce platforms and the use of digital avatars in marketing (SEC Fillings, Sep 2025; Financial Times, Sep 2025). However, the full potential of AI-driven innovation depends on people-centered strategies, with September 2025 research revealing that only 36% of retail workers feel prepared for AI-driven change, underscoring the urgent need for systematic upskilling and organizational redesign (BCG, Sep 2025; BCG, Jul 2025). These developments collectively demonstrate that the future of retail innovation will be shaped by those who successfully integrate technology, talent, and process transformation.
The role of AI in reshaping product innovation

PRINTABLE VERSION HERE 

The IADS released the premiere edition of its Global Retail Risk Index in September 2025 with the aim of providing a strategic tool enabling regional comparisons to guide retail expansion and investment. With tariff and geopolitical shocks potentially creating new economic geographies, accurate and comparable data is the basis of cutting through the noise of new developments with unknown impacts.

Recent developments have exposed retailers to sudden tariffs, currency swings, regulatory shifts and store-level security threats. Trade wars and conflicts have increased freight costs, delayed shipments, and forced companies to reassess their sourcing strategies. Despite rising scepticism around economic judgments and forecasts in a world encountering significant structural change, reliable data forms the foundation of informed decision-making. Cross-disciplinary knowledge combined with ever-improving data and scenario tools enables decision-makers across sectors to contextualise relevant information for better decision-making. To this end, the Global Retail Risk Index uses open-source data from the World Bank for comparability and accuracy in indicator definitions.

This IADS Exclusive focuses on analysing each of the eight regions in the Global Retail Risk Index and contextualising key data, intra-region differences within aggregates and other developments not captured in hard figures. The complete Global Retail Risk Index Report can be found here.

  IADS Global Retail Risk Index: A quick overview   

The IADS Global Retail Risk Index collects data on risk factors affecting the retail sector globally. Providing a comparable overview of macroeconomic factors affecting the retail sector across eight regions and 31 indicators, this report aims to inform considerations for potential market expansion, safeguarding profitability and preserving supply-chain resilience.

A ranking methodology is used to compare regions with no absolute meaning for regional scores. Scores allow comparisons among regions, with lower scores signalling lower risk for the retail sector. A ‘risk acceptability’ assessment is created based on how comfortably a region can absorb additional risk for the retail sector. The key limitations are uneven data availability, a retail-specific subjective notion of ‘favourability’ and an inherently static nature given historical data in fast-moving political and economic conditions.

Findings

The report finds that based on this framework, the ranking of regions based on risk acceptability, from low to high risk, for the retail sector is as follows:

1. North America
2. East Asia and Pacific
3. European Union (including Switzerland and United Kingdom)
4. Latin America and the Caribbean
5. South Asia
6. Eastern Europe and Central Asia
7. Middle East and North Africa
8. Sub-Saharan Africa

Secure markets: from North America to Western Europe

North America: still the strongest

This region encompasses the US, Canada, and Bermuda and has the strongest performance across economic, business, logistics and infrastructure indicators.

The US and Canada are developed economies that face similar struggles of a high age-dependency ratio and potential labour force shortages. The dependency ratio, which reflects the number of dependents to the working age population, is high due to ageing societies combined with a decline in the working age population. Political developments around immigration reform affect an already strained workforce that could potentially lead to severe consequences in the long run.

The North American region has the lowest population density, reflecting key considerations around the number, size and distribution of stores, as well as digital connectivity and order fulfilment for retailers. Currently ranked last in renewable energy consumption, this is a clear growth opportunity across sectors. Early movers in the retail sector could benefit from subsidies on renewable energy adoption.

The global impact of US President Donald Trump can hardly be overstated. The imposition of tariffs and domestic policy changes has caused global ripples that are being contended with at every level. Major department stores such as Macy’s, Nordstrom and Dillard’s are already hiking prices across categories to combat tariff pressures. Despite sudden policy changes by Trump, long-term impacts will depend on other countries’ and the private sector's responses, and remain to be seen.

Overall, North American markets are still the most favourable for retail risk acceptance given developed economies, massive capital, and US political hegemony. In general, its performance on business, economic, infrastructure and logistics indicators is the best compared to other regions. However, incoming policy changes can further impact international retail expansion in the region. In an uncertain world, the hegemon is the safest choice.

East Asia and the Pacific: rebounding strong

The East Asia and Pacific region has the second-most favourable risk acceptability for the retail sector. Countries in this region can be divided into three categories: developed economies such as Japan, Singapore and South Korea, developing economies such as China, Thailand, and Cambodia, and several Small Island Developing States (SIDS).

Broadly, the region has top rankings in economic, business, and supply chain indicators with improvements possible in full literacy and electricity access, and female workforce participation. Most East Asian countries, known to be saving economies, also showed positive real interest rates encouraging consumer saving with the Chinese government injecting a 300 billion yuan consumption stimulus to boost consumer confidence. Performance in climate indicators overall can be improved, with climate change affecting tropical countries and SIDS worse than others.

The developed retail heavyweights in the region (Japan, Singapore, and Hong Kong) are experiencing varying performances. Japan saw record tourist arrivals but the strengthening yen has led to a drop in spending. Retail sales in Singapore fluctuated in the first half of 2025 but are beginning to see a rise. After over a year of consecutive months of decline in the retail sector, Hong Kong is finally recovering however with mixed effects from tourist spending and currency effects. These countries also performed well on economic, business, and supply chain indicators, as well as social and infrastructure indicators, which enable a developed retail sector.

The Chinese economy is struggling due to weak domestic demand, a sluggish real estate sector, and ongoing deflationary pressures that limit consumer and business growth. It is also reeling from a tariff war with the US and required policy intervention to stimulate domestic consumption so that Chinese retail sales began to rise again. Chinese tourists remain a key consumer group in neighbouring countries being specifically targeted by retailers to encourage spending in Hong Kong, South Korea and Thailand.

Developing Southeast Asian countries and SIDS performed worse on risk indicators. Full access to electricity and complete literacy, which form the basis of organised economic activity, still need to be achieved in several countries. Furthermore, Thailand was wracked by severe floods this year, and its tourism challenges have been compounded by its ongoing border conflict with Cambodia. SIDS face similar challenges as given its limited data availability, market capitalisation and domestic credit performance is suboptimal. They are also one of the worst affected by climate crises with over a third of Tuvaluans applying for a climate refuge visa to Australia, marking the world’s first climate refugees.

Despite this grouping including economies of extreme sizes, the East Asia and Pacific region is low risk relative to other regions. While large economies such as Japan, Australia, and Singapore are the nuclei of the region, smaller economies rely on them geographically and economically to differing extents.

European Union, Switzerland and the UK: stable fundamentals, volatile politics

The European Union, along with Switzerland and the UK, is the third-most risk-acceptable region. This region is one of the most cohesive, with indicator divergences being less pronounced than in other regions. This is due to euro, including uniform monetary policy among euro countries, and the basic requirements that must be met to join the European Union. While Switzerland and the UK are not part of the EU, they are similar to some EU countries in terms of size and GDP.

Favourable indicators for this region are economic indicators, including FDI, demographic indicators, such as female workforce participation and population density, and supply chain risks, like logistics performance index and container port traffic. Climate risk indicators are also favourable, ranking second in forest coverage and proportion of the population exposed to PM2.5 air pollution.

Like other developed economies, the European Union faces a high dependency ratio and an ageing workforce, with persistent concerns over inflation and unemployment in certain member states. Political instability, driven by US policy shifts and the war in Ukraine, is causing widespread disruptions. Recent turmoil in major countries like France has escalated uncertainty for both consumers and retailers, with Primark, for example, bracing for lower sales and potential tax hikes, further dampening confidence and spending. Overall, the EU, Switzerland and UK region sees high risk acceptability due to its favourable performance on relevant indicators despite current political shocks.

Cautious promise: Latin America and South Asia

Latin America and the Caribbean: smack-dab middle

Consisting of large developing states like Brazil, Mexico and Colombia, smaller developing countries like Peru and Ecuador, and several SIDS, Latin America and the Caribbean lies perfectly in the middle of the risk acceptability spectrum. While it is the best performer on climate indicators, the region also faces significant challenges. Demographic indicators in this region see mixed performance; while the age dependency ratio is favourable, gaps exist in literacy, female workforce participation and population density. There are also significant gaps in infrastructure and supply chain indicators.

The region is rife with income inequality, which in turn affects consumer spending and the mix of products demanded. High income inequality polarises consumer demand, benefiting luxury and discount retailers while squeezing the mid-market. This reduces overall spending power, heightens volatility, and requires retailers to adapt pricing and positioning to navigate a fractured market.

Turbulence across Latin America and the Caribbean, driven by economic instability, governance issues, and social unrest, pose hurdles for retailers. Former Brazilian president Jair Bolsonaro was recently convicted of a coup, which will have further consequences for the biggest economy of the region depending on Trump’s response beyond high tariffs and sanctions. Venezuela’s hyperinflation and supply chain breakdowns, alongside a dictatorship regime in El Salvador increases crime-related risks and policy uncertainty around the region and require retail supply chain resilience in these volatile markets.

South Asia: dense markets and diverse challenges

This regional classification consists of only eight countries but represents a huge percentage of population due to the inclusion of highly populated countries such as India, Bangladesh and Pakistan. The region tends towards low risk acceptability due to insufficient FDI flows, low female workforce participation, and vast unorganised economic sectors. Performance on supply chain and infrastructure indicators needs improvement as well.

One of the key advantages of the region is high population density, which can be attractive for physical retail locations while acknowledging high urban digital penetration. For example, India’s fast-growing luxury market and high-spending consumer base make it a prime destination for retail expansion as evidenced by Galeries Lafayette launching its first Indian store in Mumbai later this year and a second one in New Delhi next year.

Geopolitically, the South Asian region faces tensions between nuclear powers India and Pakistan, border disputes with China, and internal instability in Afghanistan, Sri Lanka, and Myanmar. These dynamics can potentially create trade disruptions and impact consumer confidence, where careful market entry strategies must be balanced with growth opportunities.

High-stakes: Eastern Europe, MENA and Sub-Saharan Africa

Eastern Europe and Central Asia: adapting amid geopolitical shocks

This regional classification consists of several small and developing countries not part of the EU. The region is the worst performer on infrastructure and supply chain indicators. Performance in climate indicators, including forest coverage and renewable energy adoption, is towards the bottom as well. The key strengths of the region are high literacy, universal internet and electricity access and regulatory efficiency.

Geopolitical and economic instability has intensified in Eastern Europe and Central Asia as a result of the Russia-Ukraine crisis. Western sanctions against Russia and redirected trade flows have created labour shortages and forced many economies to adapt. Retail expansion in this region needs careful planning due to mixed performance across indicators and the prevalence of geopolitical crises.

Middle East and North Africa: oil-rich expansion vs. vulnerable markets

The Middle East and North African region include high-income countries like Qatar, Oman, and the UAE, as well as lower-income countries such as Morocco, Algeria and Lebanon, among others. The region ranks next-to-last in terms of risk acceptability due to mixed performance on indicators.

This region is characterised by extreme inequality between high-income Gulf countries where retail expansion is not just supported but encouraged, contrasting with poorer Northern African countries, where economic, infrastructure and supply chain performance is poor. Overall, the region is strong in inflation control, mobile connectivity and market capitalisation. However, gaps exist in full literacy, female labour participation and environmental resilience. Ongoing conflicts in Gaza, Syria, Yemen, and Lebanon have deepened instability and intensified humanitarian crises with regional repercussions.

Sub-Saharan Africa: high promise amid structural barriers

This regional classification includes several low-income countries, with regional powers being Nigeria and South Africa. The region exhibits the lowest risk acceptability as it faces significant gaps in development indicators, even given high regional inequalities.

Sub-Saharan Africa ranks the highest in renewable energy consumption and female workforce participation. It has a high dependency ratio due to a large chunk of its population being children, indicating incoming growth of its workforce. Retail, being a highly feminised sector, also benefits from high female labour participation. However, the region faces a dearth of FDI, market capitalisation and domestic credit. Infrastructure indicators and supply chain connectivity must be improved to encourage large-scale retail expansion.

Widespread violence and crises in sub-Saharan Africa, such as insurgencies in the Sahel, ethnic unrest in Nigeria, hyperinflation in Zimbabwe, and instability in Congo, further threaten supply chains, deter investment and dampen consumer confidence. This is perhaps the region with the most potential but with insufficient support structures at present.

Conclusion: resilience through data

The current global economic scenario is marked by slow growth, persistent inflation in some regions, and elevated geopolitical tensions that have disrupted trade flows and weighed on consumer sentiment. Retailers face ongoing headwinds from tariff escalations, volatile prices, and political uncertainty, requiring resilient supply chains, proactive risk management, and strategic market focus to defend margins and capture growth.

The debut edition of the IADS Global Retail Risk Index underscores the need for retailers to embrace data-driven decision-making amid a changing landscape. The Index reveals that risk acceptability varies sharply by region, with North America, East Asia, and Europe remaining the safest bets, while Latin America, Africa, and parts of Asia face volatility from inflation, social unrest, infrastructure gaps, and conflict. Across all markets, retailers must contend with supply chain fragility, fluctuating consumer demand, and new regulatory hurdles, but those leveraging reliable data, scenario analysis, and adaptive strategies are best positioned to pursue expansion and safeguard profitability amidst global uncertainty.

As digital adaptation and sustainability grow in importance, future success will depend on leveraging new scenario tools, tracking risk indicators, and remaining responsive to regulatory shifts and consumer trends. Retailers should prioritise continuous risk assessment, diversify sourcing strategies, and invest in regional intelligence to anticipate and mitigate disruptions before they escalate. Going forward, future editions of the IADS Global Retail Risk Index will allow multi-year comparisons, further empowering retail leaders to strengthen resilience, safeguard profitability, and identify new opportunities in an era defined by uncertainty and transformation.

For complete detailed data, interpretation and indicator rankings by region, please access the full IADS Global Retail Risk Index Report 2025 here.

Credits: IADS (Anchita Ranka)

What: Macy’s has returned to sales growth for the first time in years, driven by its turnaround strategy and strong performance from Bloomingdale’s and Bluemercury.

Why it is important: Macy’s turnaround demonstrates how legacy retailers can leverage portfolio optimisation and customer-centric strategies to regain relevance.

Macy’s recent quarterly earnings have marked a significant turning point, with the company achieving its first sales growth in years and sparking renewed investor confidence. This positive momentum is largely attributed to the “Bold New Chapter” strategy, which emphasises customer experience, data-driven store optimisation, and a sharpened focus on high-performing divisions like Bloomingdale’s and Bluemercury. The luxury and beauty segments have consistently outperformed, with Bloomingdale’s posting its fourth consecutive quarter of growth in September 2025, reinforcing the value of Macy’s differentiated portfolio approach. Meanwhile, activist investors continue to press for aggressive value creation through potential spinoffs, real estate monetisation, and capital expenditure cuts, highlighting the ongoing tension between immediate financial returns and sustainable transformation. The convergence of operational improvements, strategic asset management, and evolving investor expectations underscores the complex challenges and opportunities facing Macy’s as it seeks to redefine its role in the modern retail landscape.

IADS Notes: Macy’s transformation is unfolding against a backdrop of persistent activist investor pressure, as Financial Times and WWD reported in December 2024, with calls for spinoffs, real estate monetisation, and capital expenditure reductions. BoF’s December 2024 analysis underscores the tension between unlocking property value and ensuring long-term retail viability. Inside Retail’s January 2025 coverage of Macy’s “Bold New Chapter” strategy highlights the company’s focus on customer experience and data-driven store optimisation, which has begun to yield positive results. Meanwhile, WWD’s September 2025 report confirms Bloomingdale’s as a key growth driver, supporting Macy’s luxury and portfolio strategy amid ongoing transformation.

Has Macy’s finally turned the corner?

What: Severe tariff anxiety is fueling a short-term surge in US retail sales, as consumers rush to buy before anticipated price hikes.

Why it is important: Severe tariff-driven consumer behavior is temporarily boosting sales, but this trend is unsustainable and signals deeper volatility ahead.

The recent surge in US retail sales is less a sign of economic strength and more a reflection of consumer anxiety over impending tariff increases. As tariffs loom, shoppers are engaging in panic buying, driving up transaction sizes and accelerating purchases across the retail spectrum. Lower-end retailers such as Walmart and Dollar General are outperforming, benefiting from both increased market share and a shift of more affluent consumers trading down in anticipation of higher prices. Off-price giants like TJX, Ross, and Burlington are also thriving, as consumers perceive them as more resilient to tariff impacts, even if this perception does not fully align with reality. Meanwhile, struggling retailers like Macy’s and Kohl’s are experiencing temporary improvements, largely due to short-term consumer behavior and strategic adjustments, but these gains are likely to be fleeting. Industry experts warn that this period of elevated sales is the calm before the storm, with the true impact of tariffs expected to hit in the coming months, leading to more isolated winners and a longer list of losers as the sector faces heightened volatility and structural challenges.

IADS Notes: Recent analysis from April and July 2025 confirms that tariffs are fundamentally reshaping consumer behaviour, with panic buying and trading down driving unexpected sales growth. Major retailers like Walmart are leveraging their market power to maintain margins and attract new customer segments, while off-price and value channels benefit from shifting demand. However, March 2025 and May 2025 reports from Forbes and The Economist caution that these gains are temporary, as department stores like Macy’s face persistent structural headwinds and the broader sector braces for volatility once the full effects of tariffs materialise.

How to explain the recent surge in retail sales?

What: GenAI tools and decentralised experimentation are enabling employee-driven innovation in retail, but only a minority of companies have built the systems needed to scale these gains.

Why it is important: The gap between GenAI adoption and successful scaling underscores the need for investment in infrastructure, oversight, and employee engagement.

Retailers are increasingly turning to GenAI tools and decentralized experimentation to unlock employee-driven innovation, yet most organizations remain unable to scale these benefits across their workforce. While advanced AI agents and GenAI platforms are transforming decision-making, customer experience, and talent development, only about 10% of retailers have successfully implemented the robust systems required for widespread impact. Those that do achieve measurable results, such as 4.5% annual productivity growth and revenue increases of 6% or more, by moving beyond isolated pilots to comprehensive transformation and knowledge-sharing frameworks. The most successful companies treat GenAI as an “exoskeleton” that augments human capability, empowering employees to tackle previously unattainable tasks and fostering a culture of continuous adaptation. However, persistent challenges in oversight, transparency, and technical infrastructure prevent the majority from realising GenAI’s full potential. These findings confirm that sustainable innovation depends not just on deploying new technology, but on building the organizational systems, trust, and engagement necessary to amplify and scale employee contributions.

IADS Notes: By September 2025, advanced AI agents had begun transforming retail decision-making and talent development, but only 10% of companies had scaled these solutions due to oversight and transparency challenges. July 2025 research emphasised that scalable value from AI requires reimagining operations, while March 2025 findings showed GenAI’s “exoskeleton” effect on talent and productivity. Leading retailers achieved 4.5% annual productivity growth by integrating AI, and those investing in infrastructure and robust monitoring systems reported faster development and higher user satisfaction.

How every employee can become an innovator

What: AI agents are rapidly transforming commerce by automating shopping journeys, payments, and customer interactions, shifting power from retailers to digital intermediaries.

Why it is important: This shift marks a fundamental reconfiguration of retail, requiring brands to adapt to new power structures and data-driven engagement models.

The retail industry is undergoing a profound transformation as AI agents become central to the shopping experience, automating everything from product selection to payment and delivery. These autonomous systems are now mediating transactions, personalizing recommendations, and handling secure payments, making the customer journey faster, more intuitive, and highly tailored. As a result, the traditional dominance of retailers and e-commerce platforms is giving way to digital intermediaries—AI agents and tech giants—that control access to consumers and orchestrate purchasing decisions. Retailers must now focus on optimizing their data, APIs, and engagement strategies for machine readability, as conventional marketing tools like SEO and advertising lose their effectiveness. The integration of AI-driven payment solutions is further democratizing advanced commerce technologies, enabling even small merchants to offer seamless and secure experiences. However, this evolution also raises the stakes for transparency, data protection, and responsible AI use, as trust and accountability become critical to sustaining consumer confidence and regulatory compliance.

IADS Notes: Recent developments in September 2025 confirm that agentic commerce is rapidly shifting power structures in retail, with AI agents automating transactions and redefining consumer relationships. Visa’s AI-powered payment solutions, launched in May 2025, exemplify how seamless, secure, and personalized shopping is becoming accessible to all merchants. At the same time, industry analysis highlights the urgent need for robust standards of trust and transparency as AI agents gain autonomy, compelling retailers to balance innovation with ethical and operational rigor.

How AI agents are reinventing the future of commerce

What: AI-driven transformation is rapidly reshaping retail workforce structures, skills, and talent strategies.

Why it is important: These changes highlight the need for systematic upskilling and balanced AI-human integration, as confirmed by recent industry research.

The retail industry is experiencing a rapid transformation as AI integration accelerates, fundamentally reshaping workforce structures, required skills, and talent strategies. Recent research from September 2025 highlights that only 36% of retail workers feel prepared for AI-driven change, underscoring the urgent need for foundational skills such as adaptability and collaboration. At the same time, generative AI is altering the employment landscape, particularly for entry-level roles, with leading retailers focusing on augmenting rather than replacing human talent to achieve sustainable productivity gains. Despite widespread adoption, only 10% of retailers successfully scale their AI initiatives, but those who do outperform peers significantly, as shown by a seven-percentage-point advantage in five-year total shareholder returns. The shift toward skills-based organisations is evident, with 72% of retail workers now using AI tools, yet systematic upskilling remains a critical gap. The competition for AI-native talent is intensifying, with specialists seeking autonomy, growth, and meaningful projects over traditional benefits. These developments signal that the future of retail will be defined by organisations that can effectively blend technological innovation with human capability, ensuring both operational excellence and workforce resilience.

IADS Notes: In September 2025, research confirmed that foundational skills are now central to retail workforce adaptability, with only 36% of workers feeling prepared for AI-driven change. The same month, data from the Stanford Digital Economy Lab revealed that generative AI is most disruptive for entry-level roles, emphasising the importance of augmentation over replacement. July 2025 findings from BCG showed that only 10% of retailers successfully scale AI, but those that do achieve a seven-percentage-point lead in five-year TSR. Also in July, BCG reported that 72% of retail workers use AI, yet systematic upskilling is urgently needed. In June 2025, Forbes highlighted the growing competition for AI talent, with preferences shifting toward autonomy and meaningful work.

AI is moving faster than your workforce strategy. Are you ready?

What: The sudden shutdown of key service providers exposes retailers to immediate disruptions in customer experience, sales, and brand trust.

Why it is important: The challenge of managing third-party dependencies is increasingly critical, as highlighted by recent high-profile outages and cyber incidents in the sector.

Retailers’ increasing dependence on third-party service providers for essential functions such as shipping, marketing, and customer service has introduced significant vulnerabilities into their operations. Recent abrupt shutdowns and service suspensions, like those involving Australia Post and Cashrewards, have demonstrated how quickly these dependencies can disrupt customer experience and erode brand trust. Experts stress that when a provider fails, customers hold the retailer accountable, regardless of the underlying cause. Immediate, transparent communication and rapid implementation of interim solutions are crucial to maintaining customer confidence and operational continuity. However, the complexity of today’s tech ecosystem makes it difficult for retailers to diversify or duplicate integrations, often leaving them exposed. Strategic, ongoing reviews of vendor relationships and tech stacks are now essential, as what was once considered non-core can quickly become mission-critical. Ultimately, retailers must strike a careful balance between outsourcing for efficiency and building in-house capabilities for resilience, revisiting these decisions regularly to avoid becoming hollow organizations vulnerable to external shocks.

IADS Notes: The risks highlighted by recent third-party provider failures echo the March 2025 Crowdstrike Falcon incident, which caused $5.4 billion in losses and exposed the dangers of deep third-party integration. RH-ISAC’s April 2025 report found that 41% of retail cyber incidents stem from third-party breaches, while coordinated attacks in May 2025 showed how quickly trust and value can evaporate. By June 2025, resilience and agile tech management were recognized as key competitive advantages, and BCG’s May 2025 research confirmed that only a minority of retailers have successfully adapted their tech strategies to this evolving risk landscape.

How retailers can mitigate the fallout when service providers shut down

What: Economic uncertainty, rising costs, and policy shifts are fundamentally contracting discretionary spending and reshaping the US retail landscape.

Why it is important: The convergence of tariffs, inflation, and labour market shifts is forcing retailers to adopt new strategies for resilience, reflecting trends identified in the past year.

The US retail industry faces a period of profound disruption as persistent tariffs, aggressive government interventions, and mounting macroeconomic pressures converge to reshape consumer behavior and business operations. The implementation of sweeping tariffs has driven up import costs by hundreds of billions of dollars, with annual household expenses rising and consumer confidence plummeting to multi-year lows. Retailers are being forced to overhaul their supply chains, embrace AI-powered analytics, and develop new pricing strategies to navigate these challenges. Meanwhile, inflation and rising costs for essentials such as housing, energy, and healthcare are eroding disposable income, particularly for lower-income households and working parents, whose participation in the labor force is declining. The contraction in discretionary spending is now evident across multiple retail sectors, with department stores and discretionary categories experiencing notable declines. In response, leading retailers are prioritising scenario planning and systems thinking, investing in resilience and adaptability to weather this volatile environment. These shifts are not only altering the competitive landscape but also setting new standards for operational agility and strategic foresight in the industry.

IADS Notes: Throughout 2025, sources from March to July confirm that tariff-driven cost increases and policy changes have led to a sharp decline in consumer confidence and spending, with 62% of Americans concerned about rising prices and 63% believing retailers are exploiting the situation. Retailers are restructuring supply chains, leveraging AI, and adopting new pricing strategies, while lower-income households face a disproportionate drop in disposable income. The adoption of geopolitical nerve centers and supply chain reinvention reflects the industry’s urgent shift toward scenario planning and resilience.

Contingency planning for tariffs

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Omnichannel strategies have become essential for brands seeking to enhance customer experience while driving sales. From that perspective, few brands have demonstrated the resilience and adaptability of French lingerie brand Etam. From its inception in 1916 to becoming a multinational underwear powerhouse with over 1,300 stores across 57 countries, Etam has orchestrated an omnichannel transformation that breaks down the traditional physical and digital silos. Through their clienteling application, fundamentally shifting how the brand approaches customer relationships, inventory management, and in-store operations, Etam offers department stores interesting insights into how heritage brands can embrace technological innovation without sacrificing the human touch that defines exceptional retail experiences.The IADS visited their Paris flagship store in front of Galeries Lafayette’s Haussmann department store for a private presentation of their clienteling tool, largely developed in-house.

The Etam lingerie empire: from product innovation to omnichannel revolution

Paradoxically, for a now iconic French brand, Etam was created in 1916 by Max Lindemann in Berlin, Germany. The true foundations of Etam's lingerie legacy were established in 1924 with the launch of their first "indémaillable" (run-resistant) lingerie collection, marking a significant innovation in women's underwear garments at the time. In 1928, Etam expanded into France, opening a boutique on Rue Saint-Honoré in Paris and a first French factory in 1936. In the 1960s, Etam revolutionised lingerie again by introducing ultra-comfortable cotton materials.

However, the company's transformative journey began when Martin Milchior and his family acquired the brand in 1963, establishing what would become the Etam Group. While the company expanded into ready-to-wear in 1963, lingerie remained its core identity and strength. In 1965, it created just-in-time automatic restocking. The 1970s saw a transformation in retail presentation, with underwear and clothing displayed on hangers for self-service. In 1983, Etam started its international expansion. In 1995, they formed a partnership in China, where they operated over 3,400 points of sale. In 2017, the company sold its Chinese operations.
Etam has evolved from a hosiery manufacturer into one of Europe's leading lingerie retailers with a significant global presence. One hundred years old, still family-owned and independent, the Etam Group operates 1,336 stores across 57 countries and employs approximately 5,656 people worldwide. The company's turnover reached €880 million in 2023. The group has diversified its portfolio to include several distinct brands: Etam (lingerie and ready-to-wear), Undiz (younger, trendier lingerie and loungewear), Maison 123 (premium women's ready-to-wear), Ysé (B Corp-certified mid- to high-end lingerie), and Livy (high-end, luxury swimwear and lingerie). This multi-brand strategy has allowed Etam to target different market segments while maintaining its expertise in intimate apparel. Etam has maintained its competitive edge, primarily through its annual runway show during Paris Fashion Week, which has become a significant event in the lingerie industry since its inception in 2017. Finally, the company supports innovation through the WeDareLab acceleration programme, assisting lingerie and fashion brands and innovative tech startups looking for expert support in the acceleration phase.
Under the leadership of the returning CEO Marie Schott,  who has been instrumental in revitalising the brand's image and marketing strategies, the then-traditional retail company embraced an omnichannel approach. With digital sales now representing 15% of the revenue, the brand faced the challenge of connecting brick-and-mortar with online. As Etam's Global E-commerce, Marketplaces & Omnichannel Director Romain Sabatier explained to the IADS, "for a long time, there wasn't an omnichannel role. There were digital teams and retail teams." This siloed approach needed to change.
Connecting physical stores with the digital ecosystem meant digitalising the in-store experience through three main projects: a comprehensive clienteling app for sales associates, a ship-from-store initiative to maximise inventory potential and connected fitting rooms to enhance customer service. Along with other key stores, the boulevard Haussmann flagship store is a one-of-a-kind store for the brand and a testing ground for innovative solutions. In November 2019, Etam inaugurated this new flagship store in front of the Galeries Lafayette store. Located in a striking building with a 10-meter-high rotunda, the 500 sqm three-level store emphasises the building’s original volumes while offering a contemporary, apartment-like experience through a mix of raw stone, light wood, glass, and vintage furniture. Strategically located, it attracts a diverse clientele, predominantly tourists, contrasting with the loyal customer base typical of other locations. This unique customer mix provides interesting use cases for experimentation.

Etam’s clienteling app key features: customer identification, personalisation and additional sales

Developed internally, two objectives were assigned to the Etam clienteling master app. Regrouping other scattered existing systems and designed to empower sales associates, it aims to:

-    Create mobility by removing sales associates from their cash registers. Historically, sales associates were confined to their cash registers. Supplying them with Android smartphones equipped with the app has revolutionised their role, created mobility across the store, and developed a more customer-centric business approach.

-  Ensure sales associates are as knowledgeable as customers who often research products online before visiting the store. The app consolidates all necessary tools, enabling associates to offer informed and personalised service.

The clienteling app development started from the traditional customer journey fundamental issue: customer identification typically occurs during the checkout phase, when the shopping journey ends and when it’s too late to propose other items or personalise the relationship. The app transformed this approach by enabling earlier customer identification through natural service touchpoints. Etam develops the app to match customer scenarios coming from actual field experiences. Here are a few examples:/nbsp]

-    One signature scenario involves Etam's bra fitting service. One of Etam's signatures is bra measurement, with all sales associates having a measuring tape around their neck. Many customers don’t know their size, which can vary from one product to another and over time. This service creates a natural opportunity to connect with customers, guiding them to the correct size. This data is then stored in the customer's account.

-    Another scenario is click-and-collect, an opportunity for customer interaction and additional sales. There is no click-and-collect dedicated counter in-store. Instead, customers ask the staff for their order, which is retrieved thanks to the app and fetched by the sales associate. The app transforms pickup visits into sales opportunities by giving associates immediate access to customer information, including loyalty points, wish lists, abandoned carts and cross-sell suggestions. For example, suppose a customer picks up a swimsuit. In that case, the app will suggest the matching pareo or tell the sales associate that the customer has enough points to benefit from a €10 immediate discount.

-   The app supports efficient returns processing. With 80% of Etam's online returns processed in-store, the app allows the store to benefit from this significant number of customer interactions. With RFID-equipped products, sales associates can scan the unique QR code on returned items and instantly retrieve the original purchase information and customer profile (85% of customers are identified). This efficient, hassle-free process allows them to focus on understanding return reasons and offering size or colour alternatives rather than only processing the return.

-    The app also supports CRM development by enabling personalised communication. Sales associates can send product recommendations via SMS, signed with their names, fostering a personal connection with customers. This approach, usually attributed to luxury brands, is democratised by Etam. It can also serve smaller stores which cannot carry the extensive product range. In that case, sales associates can order items for the customer to be delivered at home or in-store. Finally, the app is equipped with a phoning module. Sales associates typically call customers when they have just a few days left to redeem points or use a voucher.

The clienteling app is complemented by a tap-to-pay functionality, reducing lines at the cash desks and eliminating the need for separate payment terminals.

Inventory optimisation and connected fitting rooms

The ship-from-store initiative represents another pillar of Etam's digital strategy. By making store inventory available online, the brand improved stock rotation and delivery times. This required a significant mindset shift for store teams, who needed to embrace order preparation as a new part of their role. The key to this change was to help teams understand that online customers have the same needs as in-store customers, simply accessing products through a different channel.

In select flagship stores, connected fitting rooms with screens allow customers to request different sizes, colours, and complementary items by scanning the product QR code or simply asking for a sales associate's advice. This digital feature is highly relevant in the lingerie business as it prevents customers from dressing and undressing if they want to try other options. Customers’ requests appear on associates' apps. While the customer is informed about who will help them, the sales associate handling the request is identified and visible to other users. Developing these connected fitting rooms requires a delicate balance between offering enough relevant services to customers and avoiding offering them too many, which would slow down the fitting room rotation. For that reason, high-traffic stores are not equipped with connected fitting rooms. They also offer customers the option to request mobile payment for their purchase.

Technology adoption and change management

Before wider deployment, new features are extensively tested in pilot stores across all the group's brands. Being built internally, the app is optimised regularly thanks to a robust internal development team, allowing for rapid iteration and adaptation (2 to 4 weeks) based on real-world feedback, facilitating the adoption. Sales associate feedback is quickly considered, representing a great argument in case of reluctant people. Also, contrary to the cash desk system, only an hour or so is necessary to feel comfortable using the app, making sales, processing payments and managing loyalty. Additionally, consolidating previously scattered tools into a single master app significantly reduced complexity for store teams.

Despite potential resistance to new technology, Etam reports minimal challenges in driving adoption thanks to the leadership playing a pivotal role. The digital transformation initiatives are spearheaded by a team that combines technical expertise with a deep understanding of retail operations. This synergy has been key in understanding the true nature of customer interactions, overcoming challenges and ensuring the successful implementation of new technologies. Training and adaptation have also been crucial. Regular updates and training sessions ensure sales associates are ready to use new features effectively. Finally, the company organises annual meetings to showcase new functionalities and address misunderstandings, fostering a culture of continuous improvement.

Finally, as they work with a store rotating zoning system, sales associates are not individually rewarded for their physical or omnichannel sales. However, 100% of the digital turnover is allocated to the stores according to click-and-collect and catchment areas, making e-commerce adoption easier.

By investing in technology that enhances rather than replaces human interaction, Etam has created a seamless omnichannel experience that bridges the digital-physical divide. The clienteling app, ship-from-store capabilities, and connected fitting rooms represent more than technological innovations; they place customer experience at the centre of the business. The company ensures that technology serves genuine customer and associate needs by developing solutions internally, testing extensively in flagship locations, and rapidly iterating based on real-world feedback. The Etam example is particularly relevant for IADS members as it demonstrates how a century-old, family-owned brand can drive a successful omnichannel transformation. Etam’s clienteling app shows how digital tools can empower store staff, enabling more personalised customer service, early identification of shoppers, and increased cross-selling, concerns widely shared by department stores. Etam's reallocation of online turnover to stores based on click-and-collect and catchment area, combined with the dismantling of silos between digital and retail teams, provides a possible answer to department stores omnichannel tensions.

Credits: IADS (Christine Montard)

What: Revolut is expanding into the UAE after receiving regulatory clearance, aiming to offer cards, accounts, and cross-border payment services to a digitally savvy market.

Why it is important: Revolut’s move highlights the Gulf’s emergence as a key growth market for digital banking, driven by regulatory openness and rapid consumer adoption.

Revolut’s planned launch in the UAE marks a significant step in its global expansion strategy, targeting one of the world’s most digitally advanced and affluent markets. With initial regulatory approval from the UAE Central Bank, Revolut is poised to offer a suite of digital banking services, including cards, accounts, and international transfers, to a population that is both highly metropolitan and predominantly expatriate. The UAE’s fintech market is set to nearly double in size by 2029, reflecting strong consumer demand for innovative financial solutions and a regulatory environment that encourages experimentation and digital adoption. While Revolut faces competition from established local players, its focus on expatriate needs and remittance services positions it well for rapid growth. The company’s success in the UAE could serve as a blueprint for further expansion into the Gulf, particularly Saudi Arabia, as global fintechs increasingly look to the region for new opportunities in retail finance.

IADS Notes: Revolut’s UAE entry comes as the Gulf accelerates digital transformation and regulatory support for fintech, with 72% revenue growth and £1 trillion in processed transactions reported in May 2025. The region’s e-commerce and luxury markets are also expanding, and Revolut’s integrated financial services model is now seen as a template for further Gulf growth.

Can Revolut take on the Gulf region?

What: Tesla’s former DEI lead, Kristen Kavanaugh, shares strategies for advancing inclusion and courage in the workplace amid political and organisational challenges.

Why it is important: The shift toward frameworks like FAIR demonstrates how retailers can balance inclusion with business performance, protecting both employee engagement and shareholder value.

Kristen Kavanaugh, Tesla’s former DEI leader, offers a candid perspective on championing diversity and inclusion during a period of heightened political scrutiny and organisational uncertainty. Drawing from her experience building Tesla’s DEI function, Kavanaugh emphasises the importance of compassion, courage, and practical action at the team level, even when broader support is lacking. Her advice—such as being diligent about pronouns and fostering a sense of belonging—reflects a growing industry trend: as legal and political pressures mount, many retailers are shifting from explicit DEI language to frameworks like FAIR (Fairness, Access, Inclusion, and Representation), focusing on measurable outcomes and business alignment. While some companies have faced backlash and financial loss from high-profile DEI initiatives, others have successfully maintained inclusion by adapting their approach and terminology. Kavanaugh’s story underscores that, despite external resistance, courageous leadership and thoughtful, outcome-driven strategies remain vital for building inclusive, resilient workplaces.

IADS Notes: The retail industry’s approach to DEI has shifted dramatically since late 2024, with leading companies like Walmart and Amazon adapting their strategies to balance inclusion with business performance. The emergence of the FAIR framework and the contrasting experiences of Target and Costco illustrate how practical, outcome-focused inclusion efforts can protect both employee engagement and shareholder value in a complex environment.

Tesla’s former DEI lead has some advice about fear in the workplace

What: Foundational and soft skills are now critical for long-term retail workforce adaptability and business success.

Why it is important: The focus on foundational skills aligns with evidence that successful retailers combine technological innovation with human capability development.

As technology rapidly transforms the workplace, foundational skills such as collaboration, adaptability, and communication have become essential for both individuals and organisations in the retail sector. Recent research analysing millions of job transitions demonstrates that employees with strong basic skills not only earn higher wages and advance more quickly but also adapt more effectively to industry changes. These foundational abilities, including social and critical thinking skills, are increasingly valued by employers who recognise their role in long-term performance and resilience. In contrast, specialised technical skills are subject to rapid obsolescence, making adaptability and problem-solving crucial for navigating ongoing disruption. Companies that prioritise foundational skills in hiring, development, and leadership practices are better positioned to build agile, future-ready teams. Investing in early-career development and embedding soft skills into management culture ensures that retail organisations can respond to evolving market demands, maintain operational continuity, and foster innovation. Ultimately, the ability to blend human strengths with technological advancements is now a defining factor for sustainable success in retail.

IADS Notes: Recent industry analysis confirms that foundational skills are central to retail transformation. In July 2025, only 36% of retail workers felt prepared for AI-driven change, highlighting the need for systematic upskilling. June 2025 reports emphasise early-career development and skills-based hiring as key to talent retention, while luxury brands are adopting AI-enabled management to address acute recruitment challenges. Leadership development now focuses on daily reinforcement of collaborative behaviours, and leading retailers are achieving productivity gains by integrating AI with a strong emphasis on human capabilities, as seen in March and April 2025.

Soft skills matter now more than ever, according to new research

What: Retail’s adoption of advanced AI agents is transforming decision-making, customer experience, and talent development, while raising challenges in trust and accountability.

Why it is important: As AI agents become more autonomous, retailers must rethink standards for accuracy, transparency, and employee engagement to maintain competitive advantage.

Retail is entering a new era as advanced AI agents take on increasingly autonomous roles, fundamentally altering how decisions are made, customer experiences are delivered, and talent is developed. While these technologies promise significant gains in efficiency and personalisation, they also introduce new complexities around trust, oversight, and risk management. Many retailers are finding that the opacity of AI-driven processes makes it difficult to verify outcomes and ensure quality, underscoring the need for robust digital literacy and structured evaluation frameworks. Despite widespread adoption—72% of retail employees now use AI—only a minority feel fully prepared to interpret and act on AI-generated outputs. The industry is responding by blending technological innovation with human expertise, emphasising responsible AI practices such as privacy and auditability to build trust and accountability. Ultimately, the ability to balance the speed and scale of AI with ethical standards and human judgment will define which retailers thrive in this rapidly evolving landscape.

IADS Notes: Recent industry analysis confirms that autonomous AI agents are reshaping retail, with 32% of consumer goods companies implementing generative AI for end-to-end automation as of February 2025. However, only 10% of retailers successfully scale these solutions due to oversight and transparency challenges. By June 2025, just 36% of employees felt prepared to evaluate AI outputs, prompting a renewed focus on digital literacy and responsible implementation. July 2025 findings highlight the importance of combining AI with human expertise for customer satisfaction, while March 2025 research shows responsible AI practices can increase product adoption rates by up to 63%.

On working with wizards

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

What: Despite ongoing labor market softness, US consumer spending and business investment remain resilient, supporting stable GDP growth forecasts of around 2% through 2027.

Why it is important: This resilience in consumer spending and investment provides a stable foundation for retail planning, even as labor market and policy uncertainties persist.

The US economy continues to demonstrate resilience in the face of ongoing uncertainty. While job gains have slowed to an average of just 29,000 per month over the past quarter and labor force growth remains nearly flat, consumer spending has expanded at a solid pace, buoyed by continued wage growth. Business investment and inventory restocking are also contributing to economic momentum, helping offset the effects of softer hiring. Inflationary pressures from tariffs have not materialized to the extent anticipated, and recent purchasing manager surveys show improvements in both manufacturing and services. As a result, the economy is projected to grow at a 2.6% annualized pace this quarter, with GDP growth expected to stabilize around 2% per quarter through 2027. Although some negative effects from trade policy uncertainty are still anticipated, the outlook for core GDP growth—driven by consumer, business, and government spending—remains steady, providing a measure of predictability for the retail sector.

IADS Notes:

The current US economic outlook is shaped by a complex mix of resilience and uncertainty. As Forbes reported in July 2025, retail sales have outperformed expectations, with a 3.7% annual increase in June, reflecting continued consumer spending strength despite tariff concerns and labor market softness . Visa’s March 2025 and BCG’s April 2025 analyses noted that while consumer confidence hit a three-year low and inflation expectations rose to 6%, wage growth and stable income have helped sustain spending even as job gains slow . The Financial Times in February 2025 and Vogue Business in March 2025 highlighted that consumer anxiety about tariffs has grown, but the anticipated inflationary impact has not fully materialized, as retailers adapt pricing and supply chain strategies . Alix Partners in May 2025 and Inside Retail in April 2025 described how business investment and inventory restocking are supporting economic growth, even as consumer sentiment remains cautious . Visa in October 2024 and WWD in April 2025 observed that, despite nearly flat labor force growth and slow job gains, ongoing wage growth and moderate GDP expansion are expected to keep the economy stable, with GDP growth projected at 2% through 2027 .

US Consumers: Resilience in light of ongoing uncertainty

What: AI adoption in retail is progressing gradually, transforming operations, jobs, and compliance requirements through incremental integration and practical safeguards.

Why it is important: This trend demonstrates that AI’s impact in retail is evolutionary, not revolutionary, aligning with recent findings that emphasise gradual integration, workforce adaptation, and the need for robust compliance.

The discussion around artificial intelligence often swings between utopian and dystopian extremes, but a more grounded perspective is gaining traction: AI as a “normal” technology whose adoption mirrors past technological revolutions. In retail, this means that while innovation in AI is rapid, actual adoption remains measured, as companies and employees adapt to new workflows and operational structures. The transformation is not about wholesale job losses but rather a shift in job content, with more roles focused on supervising, configuring, and controlling AI systems. This gradual integration is shaped by organisational challenges, such as the need for retraining, data readiness, and regulatory compliance, all of which slow the pace of change. Risks associated with AI, including misuse and cybersecurity threats, are best managed through practical, context-driven safeguards and robust incident reporting, rather than relying solely on technical “alignment.” Regulatory measures, such as compulsory disclosure and transparency requirements, are emerging as critical elements of responsible AI deployment. The retail industry’s experience underscores that sustainable progress depends on balancing technological innovation with human oversight and compliance, ensuring that AI enhances rather than disrupts business operations.

IADS Notes: Recent developments in retail confirm that the adoption of artificial intelligence is following a measured, evolutionary path rather than a disruptive leap, echoing the argument that AI is a “normal” technology. While 87% of retailers report revenue increases and operational gains from AI, only a small fraction have successfully scaled these solutions, underscoring the slow integration process noted in March and April 2025. This gradual adoption is mirrored in workforce trends, where AI is transforming roles rather than eliminating them, with a focus on upskilling and human oversight, as highlighted in January and May 2025. Organizational adaptation remains a significant challenge, with only 10% of retailers achieving effective workflow redesign and employee engagement, as seen in June and April 2025. The sector’s experience with AI risks further validates the need for practical, context-driven safeguards and robust cybersecurity, as outlined in July 2024 and June 2025, rather than relying solely on technical alignment. Finally, the growing regulatory focus on transparency and responsible AI, including compulsory disclosure and privacy measures, is shaping compliance strategies, as demonstrated by legislative developments and consumer expectations in March and July 2025.

What if artificial intelligence is just a “normal” technology?

What: Retailers face mounting pressure from stalled job creation, new tariffs, and inflation, leading to cautious forecasts and leaner inventory strategies.

Why it is important: The convergence of weak job growth, inflation, and tariffs is accelerating changes in consumer behavior and forcing retailers to rethink pricing and supply chain strategies, as seen in recent market analyses.

Retailers are navigating a period of heightened economic uncertainty as job creation slows and unemployment rises, eroding consumer confidence and dampening spending. The introduction of new tariffs has sharply increased import costs, with retailers unable to fully absorb these expenses, resulting in price hikes that directly impact consumers. This inflationary pressure, combined with the Federal Reserve’s limited ability to stimulate employment without exacerbating inflation, has created a challenging environment reminiscent of stagflation risks. Holiday sales forecasts are now notably cautious, with projected growth rates failing to outpace inflation, signaling little to no real growth for the sector. Retailers have responded by placing conservative orders and adopting leaner inventory strategies to avoid the pitfalls of unsold stock, further reflecting their wariness about the economic outlook. As a result, the retail industry is being forced to adapt rapidly, balancing the need for operational efficiency with the imperative to maintain consumer engagement in a volatile market.

IADS Notes: Throughout 2025, retail sales have shown marked declines, with June reporting the largest drop in four months and layoffs surging to levels seven times higher than the previous year. Tariffs have driven up household costs and forced department stores to implement strategic price increases, while consumer confidence has plummeted to a three-year low. The Federal Reserve’s policy actions have had mixed results, as inflation and tariff concerns persist. Retailers are responding with advanced inventory management and operational restructuring, as evidenced by leaner holiday forecasts and a shift toward supply chain optimization. These trends collectively underscore the sector’s urgent need for agility and strategic adaptation in the face of ongoing economic headwinds.

The economy is starting to weigh heavily on retail forecasts