What: Korn Ferry wonders if employees can be incentivized, rather than threatened, to come back to the office.

Why it is important: Work From Home has limits in terms of team interactions and overall productivity. Making sure that employees are happy to come back to the office is key to keeping their motivation intact.

Over the 2023 summer, many CEOs demanded employees return to the office, threatening their career prospects if they chose to work remotely. However, as office occupancy remains around 50%, CEOs are shifting strategies, incentivizing employees to return.

A recent survey of 400 US CEOs showed 90% are ready to reward in-office workers with promotions, raises, or better assignments.

Instead of pressuring with threats, leaders are now trying the allure of rewards. Early incentives were modest, like free lunches or tickets, but some CEOs have grown concerned about potential decreases in productivity with remote work.

Despite the pushback from companies, many employees prefer remote working due to eliminated commutes and unresolved childcare issues from the pandemic. A strong job market has also empowered employees, making CEOs reconsider strong-arm tactics. Experts believe emphasizing a welcoming office culture rather than a mandatory one may yield better results in the current landscape.

Can having employees coming back to the office be an incentive, rather than a threat?

What: A Placer study on the state of off-price in the US.

Why it is important: Due to cost of life and multiple crises, this segment is poised for growth.

The off-price apparel sector has shown resilient growth in recent years. Chains like Ross, Burlington, TJ Maxx, and Marshalls quickly rebounded after initial pandemic closures. Visits to these off-price retailers were higher in 2021 compared to 2019 levels. The segment did see some slowing in growth during 2022 due to factors like Omicron, gas prices, and inflation. However, data from the first half of 2023 indicates foot traffic to off-price chains is rising again.

Specifically, visits grew 13.3% year-over-year for these retailers in June 2022, outpacing other apparel categories. This success is likely driven by consumers seeking bargains and deals amid high inflation. Growth was especially strong in Midwest and Northeast states, with some smaller markets like Iowa and Vermont seeing visits increase over 20%.

The major off-price chains have been expanding their store counts, but are also seeing more visits per individual store. This signals solid demand for off-price apparel. In addition, cross-shopping between chains is on the rise as bargain hunters visit multiple retailers in their hunt for deals.

While sharing an off-price positioning, the major chains attract slightly different demographics. TJ Maxx and Marshalls draw more suburban families, while Ross and Burlington appeal to urban singles who often shop later at night. Luxury off-price retailers like Nordstrom Rack and Saks OFF 5th are also outperforming their full-price sister stores.

Given its low prices and thrilling treasure hunt shopping experience, the off-price apparel segment seems poised for continued success moving forward.

The enduring success of off-price in the US

1. The challenge for the retail population

a.    A global or rather a multi-polar war

The tension of managing talent has risen since the COVID pandemic, and the luxury sector has had difficulties in finding and retaining expertise- as well as other industries that feature “front line” functions such as hospitality and restaurants. As the traditional workspace evolves to accommodate remote work, retail jobs are not as appealing.

The four dimensions of employee satisfaction are flexibility, well-being at work, purpose, and personal development perspective.

•    Flexibility applies to the hours/days/time dedicated to work as well as the spent in the office and visibility on the work schedule to be able to adapt personal constraints to fit.

•    Well-being at work refers to managing the emotional workload that jobs require in ways such as moments for relaxation and confidential listening platforms.

•    The purpose of a job can be reflected in the company’s mission to tackle social causes such as inclusivity, CSR, or environmental impact.

•    The personal development perspective allows the employee to think beyond a particular role and evolve into another position within the company.

b.    Inspiring initiatives in the luxury sector that are committed to a test-and-learn approach.

Inspiring initiatives do not come from the luxury realm. The hospitality sector experienced a scarcity of talent before retail and the companies had to be innovative in their recruiting strategies by offering benefits packages, career development programs, and initiatives focused on employee well-being.

The Hilton group leads the hospitality sector with a caring business and developed its Thrive@Hilton program in which they carry out a series of innovative approaches focused on employee well-being. 87% of Hilton employees feel that their work has more meaning than just a job.

Lululemon has also aimed to curate its employee brand philosophy around the theme of well-being, and the company encourages the sales team to adopt the lifestyle. To back this up, the company developed the “Sweaty Pursuits” programme that offers fitness and wellness classes along with a confidential mental health helpline.

i.    Attractiveness and retention issues

In China, the competition to attract and retain talent is increasing as brands now must compete with mass retailers such as Starbucks or Lululemon that can offer employees a wider range of benefits. An example is Starbucks’ “Coming Home” programme which allows employees to relocate closer to their hometown as the chain expands.

ii.    Commitment and flexibility are the levers on which luxury brands are testing themselves

Luxury houses are actively trying to combat the high turnover rates of approximately 25% by outsourcing consultancy on how to increase employee engagement.

Flexibility in the work environment has also risen to be a priority for employees, particularly over the past two years. Employers have accommodated to this demand by introducing initiatives such as four-day working weeks, nine-day rotations over two weeks, or job-sharing contracts. The impact on turnover has been positive.

The 4 key success conditions in the current market are:

•    Initiatives rooted in the values and mission of the company

•    The concept of personalisation

•    Support by solid digital processes and tools

•    Based on strong managerial values

c.    Employee value proposition is the new black

The luxury industry should serve as a leader in employer branding, as they often harness their brand power to gain customers and build human relationships, yet the companies do not go the extra step to polish their presence on hiring platforms like Glassdoor to attract workers.

2. Distribution: One objective, many roads

Even as the digital age becomes more consuming and e-commerce is growing like never before, luxury brands are opening mega storefronts around the world that are more than just traditional boutiques. These mega flagships include features such as a gallery and hotel suite at Dior Avenue Montaigne in Paris, three bars- coffee, champagne, and cocktails- at Hermès on Madison Avenue in New York, or the winter garden at Cartier rue de la Paix in Paris. These quasi-cultural grandiose stores create cultural capital for the brands and give them a unique competitive advantage.

Despite challenges like reduced tourism and supply chain issues, smaller fashion & jewellery brands are flourishing in the luxury sector by expanding their stores, offering unique experiences, and focusing on exclusivity and community-led styles. Brands are increasingly customising their stores for local authenticity and cultural depth. Significant investments are being made in digital transformation, enhancing online user experiences, integrating social media, and offering omnichannel services. While e-commerce growth surged by +30% during COVID, it's expected to stabilise, with a projected CAGR of around 10% until 2025.

Luxury brands rely fundamentally on the human touch as it creates brand loyalty and lasting client relationships; the companies heavily invest in store CAPEX (Capital Expenditure) and digitalisation. The challenge lies in recruiting and retaining talents who can authentically bring the brand story to life and offer a unique experience beyond just the product. Continuous training is essential, with top brands dedicating one trainer for every 70 to 100 full-time employees. Effective onboarding varies, with some brands offering up to three weeks before new hires start selling, while others start in just two days. To maintain a consistent brand touch globally, training is shifting from a standard checklist method to a more behavioural and transformational approach, emphasising soft skills and allowing for experimentation.

As brands build their omnichannel ecosystem, there are discrepancies in the efficiencies across the value chain, and the perfect execution of the “one-stock one-client” is not very feasible. Staff across multiple locations or working on the floor versus e-commerce often fail to report the unavailability of products to other team members.

The Customer Service Centre (CSC) is evolving from an after-sales to sales channel which brands can utilise to sell during low traffic periods and connect with customers from other cities or countries.

Three approaches providing CSC in a branded environment for distant sales:

•    CSC located within a flagship store

•    CSC centres equipped with a store-like environment

•    CSC operating through a virtual store

The emphasis placed on a customer-centric experience is enhanced in the luxury industry with brands going beyond to help their sales associates ameliorate the customer experience. Brands must improve in three areas to gain the Customer Lifetime Value: placing the customer at the core of business decisions, building an internal client management community, and identifying essential client KPIs (share of e-commerce, click-from-store, remote sales, target lead times…) to follow at every level of the organisation.

3. New challenges & territories

a.    Brand desirability vs. brand elevation

The polarisation of fashion had become even more apparent with mid-level brands struggling to gain market share with fast fashion selling good designs at low prices and luxury houses selling dreams. Luxury brands must turn to brand elevation as consumers are opting to view purchases from the big brands as investments rather than frivolities.

Bernald Arnault attests the success of LVMH brands to their desirability and ongoing evolution. Due to high luxury brands’ brand image that they have curated through mass amounts of communication and their base of Very Important Clients that represent up to 35% of their business, the companies are in a stronger market position than competitors.

The recipe for brand elevation stands at:

•    Clear client knowledge- following clients that purchase more than EUR 10k annually… EUR 50k for leading brands and EUR 100k or EUR 200k for jewellery brands

•    Nourishing the brand image with culture- collaborations with artists and ambassadors, exhibitions, events, and popups

•    Attract the offer with exclusivity- increase the perceived value of products and present products at significantly higher price points to keep the dream-like effect on the brand

•    Create sky-is-the-limit experiences- Tap into brand immersion to nourish the magic; for example, the mega flagships that display the brands’ histories and treasures

•    Push the limits of client treatment

b.    Brand extension- The convergence of the 2 luxuries?

Luxury brands are intertwining across industries to create an even more complete customer experience.

Soho House, for example, has branched out from being only a hospitality group to branching out with its beauty line, Cowshed, and its home and furniture department, Soho Home.

Louis Vuitton is venturing into the hotel industry, building on its existing foray into experiential luxury with restaurants and cafés in various cities. This move aims to offer immersive experiences to clients, combining shopping, storytelling, culture, dining, and accommodation. Benefits include gaining deeper insights into their most loyal clients, enhancing social media presence through visually appealing spaces, fostering brand loyalty, and creating unique, localized spaces that become tourist attractions.

The hospitality sector offers an opportunity for brands to showcase their identity, as seen with Bulgari and Armani hotels, which have successfully promoted their products and brand aesthetics. Luxury brands are recognizing the potential of offering hospitality to top clients, with some flagships even providing suites for an exclusive experience, blending shopping and luxury accommodations.

MAD Luxury fast forward part 1

MAD Luxury fast forward part 2

MAD luxury fast forward part 3

What: Steen & Strom has been identified as the Nordic Tom Thumb in the past. Not anymore.

Why it is important: The department store has been able to re-brand itself from tired midmarket location to global luxury destination in less than 5 years thanks to a strategic branding coupled with smart real estate management from the parent company, Promenaden.

Oslo, Norway's capital, has been transforming into a major luxury retail and cultural hub. This evolution was highlighted by the recent development of its waterfront area, which now boasts major attractions such as the National Museum, Munch Museum, opera house, and several trendy eateries. The swift introduction of these institutions has significantly shifted the city's image, making it a potential rival to renowned destinations like Stockholm and Copenhagen.

The heart of this transformation in luxury retail can be attributed to Promenaden's real estate strategy. Over the past decade, this local landlord, which became a division of the UK-based real estate developer Mark in 2015, has been redefining Oslo's luxury retail sector. With its ownership of premier luxury locations, including the historic Steen & Strøm department store, Promenaden has established a luxury quarter in Oslo that is now drawing affluent international tourists.

One of the major factors contributing to Oslo's emergence as a luxury destination is the high purchasing power of the average Norwegian, coupled with taxes on items bought outside the country. Promenaden's strategic approach has filled this previously overlooked market with major luxury brands such as Louis Vuitton, Hermès, Burberry, Dior, and Chanel. Moreover, upscale auto brands like Lucid and Nio have also set up shops in the city.

Despite the success of Promenaden's luxury district, space has become limited. To address this, Promenaden is expanding the luxury area with additions like the Eger site, which will feature Europe's largest watch store, Urmaker Bjerke. Furthermore, the Steen & Strøm department store is undergoing a $36 million refurbishment, emphasizing both international and local brands.

Economic incentives, like a tax on luxury items bought outside Norway and re-introduced into the country, play a role in driving domestic luxury sales. The city's evolving cultural appeal and luxury retail scene are positioning it as a unique destination for affluent global travelers. While Norway might be known for its high costs, its burgeoning luxury market and cultural offerings make it a compelling destination that the global elite might find hard to overlook.

Oslo represents a new Nordic luxury destination

What: Wunderman Thompson release their 2023 edition of the future customer, including their analysis of the behavioural evolutions.

Why it is important: Customers are channel agnostic, and do not care about systems. What they want, how they want it, is changing and retailers have to take into account a multitude of moving parameters at the same time.

The report highlights 15 main takeaways about the current and future trends in online shopping and consumer behavior:

1. Online spending continues to grow steadily, albeit at a slower pace compared to the big jumps during the pandemic. However, consumers predict that 64% of their spending will be online in the next 10 years, so the online shift is here to stay.

1. Working from home is changing how people research and shop online. 65% say they shop more online due to working from home, while 66% spend more time researching purchases. Loyalty to retailers is also shifting as commerce becomes more digital.

1. Consumers want seamless omni-channel experiences across an increasing number of touchpoints and devices. 60% prefer retailers with both physical and digital stores. Mobile dominates with 32% of online spend, but a balanced device strategy is key.

1. The customer journey remains predominantly digital, with 64% of inspiration and 71% of search happening online. But physical stores have re-emerged post-pandemic as sources of inspiration and search.

1. Marketplaces continue to dominate, driving 35% of online spending globally. But D2C branded sites have grown from 7% to 14% of all online spend, overcoming attrition issues.

1. Consumers have high expectations for online experiences and will abandon retailers who disappoint. 61% want brands to improve experiences and products. Marketplaces lead in experience.

1. Delivery speed and convenience are top priorities, but sustainable options are rising in demand. 46% of shoppers have used eco-delivery, up from 43% in 2022.

1. Social commerce is on the rise with 53% planning to shop more on social platforms. 39% want social-specific deals and discounts to drive purchase.

1. Price remains the top priority, with convenience, reviews and ease of returns all influencing purchase choice. 53% would switch to direct brand sites for better pricing.

1. Sustainability and ethics matter more than ever. 52% have changed habits due to environmental concerns and 59% don't think companies are doing enough on sustainability.

1. The world is digitizing - 45% want digital, instantly downloadable products. 23% have purchased in the metaverse, while 45% are interested in post-death consumerism.

1. Gaming commerce has major potential with 85% of shoppers playing games and 57% spending money on games. 49% are interested in buying real products in-game.

1. Innovations like cashless stores, voice commerce and VR are advancing, but still early stage. Cryptocurrencies are wanted by 44% as a payment method.

1. Subscriptions have plateaued at 56% uptake, but automated reordering is niche. AI will increasingly influence recommendations and purchasing.

1. Consumers believe brands should be more innovative in using digital technology for shopping, indicating significant room for improvement and growth.

Report: the future shopper, 2023 edition

Printable version here

*The IADS attended the GDI 73rd International Retail Summit held in early September 2023 in Zurich. Lecturers discussed the decisions retailers should make in uncertain times when costs rise and margins shrink. Money is now becoming scarce, the pandemic destroyed supply chains, and the war in Ukraine is causing energy shortages and high inflation. Consumers are becoming more price-sensitive. And while some companies are downsizing their workforce, others are desperately looking for employees.

What should retailers do when costs rise and margins shrink? Streamline offerings, robotise services, stop sustainability initiatives? Optimise the present now – or invest in the future? What to do? And even more importantly, what not to do?

"More focus!" is the magic formula according to GDI. For retailers, this means setting bold priorities, implementing rigorous decisions and taking responsibility: not just for the shelves, but also for the people – customers and employees – to build trust. The IDAS put together a sum up of the conference lectures and talks.*

*Table of contents

1. The world ahead: geopolitics and inflation, generative AI, purchasing power, the needed rebirth of shopping and the future of retail
2. The state of retail: trends, opportunities and the power of storytelling, experiences and reputation
3. How can retailers act more responsibly: building and showing efforts, and engaging in repair solutions*

1. The world ahead: geopolitics and inflation, generative AI, purchasing power, the needed rebirth of shopping and the future of retail

a)    Economic outlook: what comes after inflation? How geopolitical conflicts and economic changes affect economic and purchasing power. - Max Kunkel, Chief Investment Officer, UBS

The past 2 years were all about inflation with 3 different waves:

1. Inflation started with the huge post-Covid demand for goods (especially in the US).
2. Then, additional inflation came from the increase in commodity prices.
3. A third inflation wave comes from businesses’ reaction to geopolitical woes, scarcity of some materials and bottlenecks in the supply chain. This inflation wave still impacts retail now.

In the coming months, inflation will not cool down in the EU as it currently does in the US. Countries won’t rely on the US and EU’s central banks to predict the future as they are not considered reliable anymore.They lost their credibility after saying that inflation would be temporary. It might have been true by then, but they were unable to properly communicate the impact the second wave was going to have.

In the US, consumers are not deterred from consuming thanks to job security, a steady job market and a regular increase in wages. However, fiscal policies will not be supportive anymore, hence credit card debts will increase.

What about China in this context? Reopening won’t have the booming effect Western countries are expecting. Measures taken by the Chinese government are about getting the current growth rate stabilised instead of providing stimulus to generate higher growth. Also, China is in a deflation phase one could expect it to export to the rest of the world, but it won’t be the case.

b)    Next tech: a future outlook. What current technological developments such as generative artificial intelligence implicate for companies, employees and customers. - Marianne Janik, Chairwoman of the Executive Board, Microsoft Germany

Generative AI is a huge step in tech. Each step that happened in the tech sector generated wealth (internet, mobile phones…), so this should be an incentive to take the topic seriously. OpenAI, a non-profit partner of Microsoft, launched Chat GPT, which reached 100 million users in 3 months without any marketing. The speed of spreading among society and business is unprecedented.

People are now quite aware of Generative AI (GenAI) use cases: creating content, summarising texts, combining text and images, coding… When it comes to retail, GenAI allows to:

•    Process customer feedback thanks to a GenAI-powered chatbot to answer customers.

•    Offer shopping assistance to help customers find what they are looking for (equivalent to an online sales associate).

•    Speed up the product description process, usually a time-consuming task (can be implemented very quickly).

•    Generate personalised marketing messages.

•    Create complete store magazines with texts, pictures, recipes, etc.

•    Have a supply chain copilot: GenAI gathers data from different sources and helps the company understand where it stands to make the best-informed decisions.

•    Create shopping lists and provide recipes (as explained by Cyrille Vincey about Carrefour during 2023 3rd CEO meeting in July 2023).

•    Support category management and sourcing.

c)    «Going shopping» is dead: why time design is a crucial success factor in retailing. - Johannes Bauer, Head of Think Tank, Gottlieb Duttweiler Institute

People in Western countries work less and have more spare time than ever before thanks to increased productivity. Research shows that the more you have time, the happier you feel with your life, with both time and happiness factors being tightly intricated. Despite this, people feel under stress because of time pressure (in Switzerland, 45% of people wish they had more time for themselves).

Why time-related pressure is important for retailers? Shopping faces a lot of competition from other activities making people happier, seen either as more entertaining (TV) or meaningful (time spent with families and friends or learning activities) .

How is shopping now considered? Is it still fun? Can it be meaningful? Shopping is in an existential crisis as it is increasingly perceived as adding to people’s stress levels (especially when it comes to grocery shopping). The amount of time women spend shopping has decreased over the last 25 years from 180 to 110 minutes per week. Shopping is not considered a fun activity anymore because of limited financial means. Besides it is now seen as a time-consuming, complicated and boring chore.

From that perspective, it seems that retailers' efforts towards more convenience, experience and purpose haven’t hit customers yet. Also, customers increasingly favour repair over buying, owning is not as crucial as before and socialising is more important than shopping. Inspiration, experience and identity have become some of the key values of shopping as well as speed and efficiency. As a result, retailers should develop:

•    Promptness: for instance, offering no lines at the cash desk, seamless payment and an accelerated shopping process.

•    Proximity: be closer to customers, physically and mentally. For instance, shopping is moving from city centres to the periphery of cities with retailers such as Nike and Nordstrom opening local small-size concepts.

•    Pleasure: coming mainly through inspiration as customers are expecting to find new ideas while shopping. This doesn’t necessarily mean retailers must offer that many products, the most important being to know what their target customers perceive as a great time spent shopping.

•    Purpose: with increasing expectations for CSR commitments and mixed-use retail to allow more activities besides shopping (restaurants…).

d)    The future of retail: trends and opportunities. Exploring the key trends and innovations shaping the industry. - Scott Galloway, Professor for Marketing, Stern School of Business, New York University

Galloway introduced a collection of ideas and trends that were not necessarily linked to each other •    Concerns emerge despite a positive economic outlook in the US: consumer demand is coming down and supply chain issues are currently being solved. Wages are increasing faster than inflation, pushing consumption, and the job market is robust. Despite these positive factors, people expect economic disasters. But they never happen: the more we worry about them, the less they happen (Y2K, Greek debt domino effect…). Work-from-home is an enduring trend (less in the EU than in the US) that impacts both residential and office real estate.

•    When it comes to tech companies, their new strategy to improve profit is to lay off staff: lay-offs range from 80% of the staff at X (Twitter), 24% at Meta to 5% at Microsoft.

•    Luxury continues to surge. The number of billionaires has multiplied by 5 over the past 2 decades. It is also good to be rich as fiscal pressure has decreased everywhere since the ‘70s. Ultra-luxury aggregates more and more wealth: quiet luxury brand Brunello Cuccinelli posted a YOY H1 +31% growth and Hermès now has a larger market capitalisation than Nike.

•    Customers are craving for experiences. The post-Covid You-Only-Live-Once mindset is still present, and people are spending a lot of money on travel and culinary experiences. As a result, e-commerce is decreasing. When it comes to experiences, gated communities are gaining traction: for instance, the Soho House number of members grew by +91% from 2021 to 2023. Luxury hotel fees can now reach USD 28,000 per night as is the case in Dubai.

•    When it comes to the road ahead in retail, innovation efforts are put into the supply chain with the development of solutions like BOPIS. Consequently, customers are less satisfied buying on Amazon as many other retailers offer the same delivery services with a better shopping experience.

•    There is no real innovation happening in-store even though stores are crucial to the business. For instance, Apple’s greatest innovation for their future growth was to open stores: they are Apple’s best ad. Apple is ranked #1 in sales per sqm. Tiffany is #2. Stores, as well as the price point, are the only difference between Apple and Android phones.

•    AI will create more jobs. Automation will generate wealth as it’s the case with Starbucks which will be able to make 400 lattes per hour instead of 20.

To conclude, Galloway predicts that the biggest innovations to come in retail will be the disappearance of gas stations and retailers entering the healthcare sector to transform it into better experiences.

2. The state of retail: trends, opportunities and the power of storytelling, experiences and reputation

a)    Experience retail: integrating content, community and commerce. How storytelling turns a shop into an experience. - Rachel Shechtman, Founder, Story, and Member of the Board of Directors, Camp

In 2011, Shechtman founded the Story store concept with the idea that it should act as a magazine with displays and brands changing every 2 months thanks to renewed stories (as if the store was a gallery), but also selling products like a normal store. In 8 years of existence, they had 43 different stories:

•    They were telling these stories by merchandising products and brands and by creating events.

•    They were making money by selling products and related sponsorships: for instance, the Cigna health care company as the sponsor for the wellness story.

Shechtman sold the company to Macy’s in 2018 and worked with them for 2 years to scale the Story concept: 36 locations opened across the country. Besides adjusting the concept to a department store, scaling it required to rethink who and how to hire the people who were going to work in the Story shop-in-shops. It was new to Macy’s to favour mindset over skillset.

Then Shechtman opened Market by Macy’s in February 2020 which she defines as a lifestyle centre (spanning 2,000 sqm). The main ideas behind Market by Macy’s were the following:

•    Editorialise products: for instance, by including Marc Jacobs’ Daisy floral-shaped perfume products in the floral dresses department.

•    Instead of a traditional customer service counter, offer a happy-to-help desk including many services and develop the idea of a community store,

•    Open a coffee shop based on the local consumers’ real taste,

•    Create a multi-brand beauty shop-in-shop, Getchell’s Apothecary,

•    Set up an event calendar to offer activities ranging from cooking classes to book signings and fun for kids of all ages.

When it comes to Camp, the store used to only feature theme-related bookshelves and fixtures in the beginning. Then they started to develop experiences, and now shelves are magic doors to access paid experiences such as Disney's Little Mermaid (with dynamic pricing from USD 35 to USD 65). Camp now is a theme park in a store.

Camp is also eager to develop a great vendor experience. To that end, they offer a single point of contact to avoid having 3 persons from accounting and 3 persons from buying, etc… in cc of the emails. They also send hand-written thank you notes for instance.

b)    Let's get phygital: the next frontier of department stores. How to use digital and emotional connections to attract the new "Generation C". - Dimas Gimeno Álvarez, CEO, WOW Concept

The Wow concept was opened by the former El Corte Inglés president. It is a new department store concept with no legacy, hence no constraints (besides money) and no limitations. Gimeno defines it as a marketplace with a store, a phygital concept store which business relies on:

•    Curation: what a store is selling is more important than ever. They look for the newest brands that are not present in the Spanish market yet: these brands should be new, difficult to find, trendy, exclusive, desirable and forward-thinking. Wow is a connector between consumers and brands.

•    Experience: a great one should involve convenience, ease, flexibility, a frictionless journey, speed, personalisation, and everything in real-time. The in-store experience is digitally based.

•    Mindset: involves difference, innovation, entertainment, exploration (back to the department store roots) and F&B on the rooftop.

According to Gimeno, the path from physical to digital retail offers retailers the possibility to humanise physical and digital through personalisation. This in turn leads to an increase in the conversion rate and cross-selling, a decrease in customer acquisition costs and return rate, and the ability to acquire small data.

On another hand, the path from digital to physical retail allows a superior customer journey which requires an extensive use of technologies with many advantages: increased qualified traffic and conversion rate, improved customer loyalty and big data.

It took Wow 1.5 years to know who their customers are. It was a tough path paved with a lot of mistakes, but they are now on track with the opening of a second store in Madrid.

c)    Sports retail rethought: the path to the experience brand. When platform and community are more important than shelves and clicks. - Matthias Rucker, CEO, SportScheck

Sports practice transformed a lot since Covid: it now conveys enthusiasm, involves networking and requires experience at the retail level.

SportScheck has 34 stores in Germany and is a leader in omnichannel sports retail as their e-commerce turnover represents 28% in 2023. It intends to be an experiential brand and be an authority in running and outdoor activities, omnichannel excellence and cost discipline.

Being perceived as an authority in a discipline is difficult for a multi-category retailer, and SportScheck is struggling a bit more with outdoor than with running activities. When it comes to running, they offer brands in width and depth (from niche to mainstream, from highly technical to more basic options), they have built an identity and find innovative ways to reach out to customers. Communicating about running is often very serious: instead, they decided to include more fun (life is more fun when you run) and invite people to be themselves.

In terms of experience, they also launched many runs and so far, they have had 40,000 participants. They also created a running academy offering courses to learn how to run well depending on the customer’s level and ambition in terms of distance. Also, the Munich store had a 24-hour run on a treadmill: a distance of 380 km was achieved by several runners, and it is now in the Guinness Book. They have a new store format in Stuttgart featuring surface-practice areas, a live workout area with courses offered along the day, physiotherapists and an optician as services in addition to a more traditional advisory service. The concept is due to roll out to other cities. The website also offers an experience platform connecting events and activities with the necessary products.

All those activities are great material to enhance the communication with the community of customers as well as live streams, social media activities and PR buzz creation.

d)    The power of storytelling: building trust and creating value. How to shape the 24/7 conversation to protect and enhance a company's reputation. - David Shriver, Chief Reputation Officer, Ocado Group

Reputation is the key to reaching customers, suppliers and financial stakeholders. Emphasizing a story around a brand is difficult as people will more likely focus only on daily figures and operations rather than the conversation around your brand. But if there is no conversation, there is no brand.

Stories create conversations. These conversations constitute the retailer’s reputation. The conversation has changed in the digital era, and there are 5 factors shaping digital conversation:

1. Disintermediation: the last time technology had the same impact as the digital revolution was Guttenberg’s press printing.
2. Velocity: it has a major impact on storytelling and on the speed of spreading. For instance, in 2013, fake news was reported by the Associated Press agency that President Obama was injured by a bomb in the White House. It immediately provoked a major stock market drop. Even though the news was removed in minutes, the impact on the stock market was still there.
3. The end of silos: de-clustering who has access to what.
4. Loss of control.
5. Permanence: the internet never forgets anything even though nobody ever goes on the second page of a Google research.

It’s difficult to determine the outcome of the conversation, but companies can shape it. To that end, they need to own the story, believe in it, take every opportunity to tell it and sell it.

3. How can retailers act more responsibly: building and showing efforts, and engaging in repair solutions

a)    The foundation of action: success requires responsibility! Why retailers must act on behalf of their customers. - Markus Kaser, Chief Purchasing, Marketing and IT Officer, Spar Austria

Spar operates in food (supermarket), sports and owns 37 shopping centres. They posted a USD 18.63bn revenue in 2022 and they dedicated USD 690mn to investments. 91,300 employees work for the company.

How is Spar gaining customers’ trust, from the bottom with product quality up to communication with customers? This is articulated in 6 sets of initiatives:

1. Reducing sugar: they started the project by building a scientific advisory board gathering paediatric doctors and diabetes specialists. Then they partnered with the industry and suppliers. It required time and investments as customers had to get accustomed to less sugar, hence Spar had to develop pricey new recipes. Today, customers don’t feel a difference between yoghurt with only 9% sugar compared to 14% before. In parallel, they reduced the sweetener usage.
2. Saving biodiversity: first, they promoted biodiversity in the product offer (pushing for alternative products) and then discontinued selling species in danger of extinction (fish).
3. Protecting bees: they built a bee council with experts.
4. Communication: they showed the actions they took against glyphosate usage and asked suppliers to discontinue its usage (or at least to offer clear labels). They are also fighting against the European ‘Nutri Score’ on food products as it doesn’t show the real quality and impact on health (an industrial frozen pizza is B-graded whereas olive oil is C-graded and butter E-graded). This needs to be urgently revised.
5. Conveying information: by sorting out and explaining facts and myths.
6. Enjoying food sustainably: to that end, they develop meatless food (they now have 120 own products) without sacrificing taste.

b)    Tool sourcing: the infrastructure for repair in retail. - Ingvill Kerob, Co-founder, Repairable

First, Repairable investigated to understand why people stop using products:

•    Products expire or run out of fashion (30%): in that case, renting products instead of buying them and resale products can be solutions.

•    The product changes in fit and/or in colour (30%), in which case repurposing is a good option.

•    Damages such as holes occur on the product (30%): repairing it is the solution here.

•    Other reasons (10%).

The company has tried to scale repair in retail for 7 years. They want to build a large community of repair companies to make repair part of the retail industry. Such initiatives are an opportunity for retailers to be compliant-ready, get rich data, reduce costs, improve topline and retain customers thanks to a great after-sale experience.

But extending the product lifetime means changing the retail business model, KPIs, people and budget. In the end, the challenge is to move the retail industry from product selling to service selling.

Unfortunately, the competence of repair is scarce. People who are in the know must be creative enough to find a custom solution for almost every product. It is a difficult job with small wages. Besides, the repair margin is smaller than the one for selling products. There are additional hurdles:

•    The product's original value should be at least EUR 100.

•    The cost of repair should not exceed 50% of the product's original value (logistics costs included).

•    The physical infrastructure is difficult to build and requires precise mapping of all the local professionals and their specific skills.

It seems repair solutions are not ready to scale yet whether it is because of the scarcity of competence or the economic model.

c)    Second life: community building by fixing stuff. - Martine Postma, Founder, Repair Café International Foundation

The foundation promotes repair worldwide in a different way than Repairable. They advise and allow people to open Repair Cafés for clothes, toys, furniture, white and brown goods… (repaired 65% of the time). Usually, it acts as an eye-opener for customers as they don’t know or think the product could be repaired (collaborative work with experts in the Repair Café). People also discover that repair can be fun and rewarding.

They provide a digital starter kit available in 5 languages on their website, repaircafe.org, including a step-by-step manual to build the project and communicate around it. 2,824 Repair Cafés have already opened across the world.

Repair Café calls on governments to allow repair options to be cheaper than new products, by cutting VAT and providing more information. They could also reduce consumption by putting a flat tax on fast fashion. Governments could educate people starting from school, but they are very reluctant to do it so far.

Postma urged retailers to acknowledge that customers don’t need that many new products. They should help repair become a cheaper option than new products. They could also benefit from repair thanks to a better relationship with customers and a better in-store experience as well as the collection of data.

*The ability to focus is one of the most important management competencies in retailing, especially at the moment. Thought leaders, retail pioneers and top managers should ask themselves the following questions:

•    Less is more: how does streamlining the focus help retailers to become more employee- and customer-centric?

•    Curating versus reacting: do successful retailers shape customers’ preferences through their assortments – or do they merely address existing customer needs better than the competition?

•    Product, service or experience: what do retailers need to focus on when customer journeys become immersive experiences between physical and digital worlds?

•    Human versus machine: how does a human-centred approach focusing on customers’ and employees’ needs unlock the true potential of automation?

•    Way out of the crisis: which innovations truly help retailers thrive in the recession?*

Credits: IADS (Christine Montard)

Printable version here

Back in March 2021, Dr Christopher Knee shared his views on cultural goods, specifically books, in an IADS Exclusive. Two years later, the cultural goods footprint in retail is growing in renewed ways, justifying a new look at the topic.

Several reasons are underlying the cultural goods trend. On one hand, the cultural goods business at large is growing as explained by Bain & Company and Altagamma in their 2021 luxury report: with the reopening of art fairs, the art market recorded a post-Covid renewed interest in art with an increasing participation of new and younger consumers buying in the mid-priced segment. Besides investment and speculation purposes, this phenomenon is also sustained by the new pivotal role of home and the intertwining of living and working. On another hand, many luxury brands are morphing from high-quality product manufacturers to cultural actors, offering consumers ‘on steroids’ value proposition and raising the bar for other retailers.

This expanded value proposition is an additional way to answer new consumers’ expectations for more experiences beyond the traditional retail transactional relationship. From that perspective, increasing the retail’s cultural component and the cultural goods offerings represent an additional opportunity to drive traffic in stores and possibly generate additional turnover.

High-end art is a traffic and brand builder, but could art selling generate turnover?

Many department stores display art in their stores. For more than 30 years, Le Bon Marché in Paris has supported the contemporary art scene by acquiring paintings, sculptures and drawings as well as exceptional design pieces. Visible everywhere in the store and in parts of displays for some design pieces, the store is now giving its collections an additional experiential value by monetizing visits (for a EUR 20 fee).

Galeries Lafayette also ventures into exhibiting art: since 2016, they are showing a massive ‘Light Machine’ by French artist Xavier Veilhan in the Haussmann men’s store. More recently, and now that the famous cupola renovation is completed (a cultural attraction in itself), they brought an art installation called ‘Time to Breathe’ by the Korean artist Kimsooja, which offers a new vision of the cupola. By covering the inside historic dome with a film that diffracts the sun's rays, Kimsooja creates ephemeral luminous effects on the exterior surfaces and in the interior spaces of the dome. To create a new experience, visitors can even book a visit to the in-between dome.

Since 2020, South Korean major department stores such as Shinsegae, Lotte and Hyundai are venturing into the art market in 2 ways. Firstly, they jumped into the art market by collaborating with existing art fairs: for example, Hyundai and Lotte’s Busan branches are partnering with local art fairs. Secondly, they are incorporating art pieces in their stores to enhance the customers’ shopping journey (up to 250 pieces for Shinsegae). As for other Western countries, interest in art grew during Covid-19, particularly among the Millennial and Gen Z generations. Overall, the purpose of art displays in department stores is about enhancing company branding and not trying to make a profit out of selling art pieces.

But art also increasingly enters department stores in transactional ways. In May 2023, Lotte announced they would open a pop-up store showcasing 200 different kinds of merchandise from the National Museum of Korea (replicas, limited editions). Here, this museum ‘gift shop’ overlaps with national pride amid the Hallyu cultural wave. Similarly to Lotte, La Samaritaine opened a 5-month ‘gift shop’ run by the international art gallery Perrotin at the time of the store reopening in June 2021. The 200 sqm pop-up store offered cultural goods such as art books, artists’ limited editions, replicas, goodies and decorative objects. Besides product selling, offering cultural goods was a great way to make the offer dedicated to younger customers more dynamic and attractive.

Finally, in May 2023, Galeries Lafayette Nice Massena store hosted a performing 50 sqm pop-up store dedicated to controversial, yet very successful, French artist Richard Orlinsky. The space was selling limited editions of the artist’s famous gorilla sculpture and an exclusive highly commercial capsule collection including items priced under EUR 100 such as t-shirts, pens, puzzles, suitcases, iPhone and AirPod cases.

Selling cultural goods thanks to partnerships

As explained by Dr Christopher Knee, some department stores have not abandoned books but run this business in partnership with bookstore partners. Harrods in London partners with WHSmith to manage their lower-ground bookstore. De Bijenkorf in Amsterdam has handed its book department over to AKO, part of Audex. In 2021, Manor signed a partnership with FNAC (a legacy French retailer specialised in cultural goods) to open 27 shop-in-shops to provide books, audio, video and electronics. There are business limits to partnerships though: having limited brand awareness in the German-speaking part of Switzerland, FNAC and Manor recently decided to close 10 shop-in-shops.

As part of their turnaround strategy launched in March 2022, Printemps announced that cultural goods would be part of their revamped product offerings. Pursuing their existing partnership with the famous Parisian bookstore Gibert, they opened a 490 sqm bookstore located on the 7th floor of the Haussmann men’s building. The space offers more than 20,000 books including 20% of second-hand books and also a very large selection of Japanese manga books. This is a smart move as the category is highly praised by Gen Z who is massively buying manga (France is the second market for such books). Filled with natural light and offering a great view of Paris rooftops, the bookstore is coming along with appealing food and beverage offerings, making the entire space a relaxing and engaging place. Whether profitable or not, this type of offering can generate traffic when shrewdly targeted and create the kind of lifestyle experience and ecosystem that consumers are currently looking for.

Being part of the Zeitgeist: cultural prizes and sponsorship

Brands are increasingly embracing culture to be visible to additional groups of consumers and to be a player in the Zeitgeist. Supported by the Loewe Foundation, the brand created a Craft Prize to support international artisans who create objects using materials such as ceramics, metal, leather, textiles, glass, wood, etc. To emphasize its cultural impact, the latest edition of the Loewe Craft Prize award ceremony was held by Fran Lebowitz (a famous New Yorker intellectual leading figure) at the Noguchi Museum in New York at a time when the brand is willing to grow its footprint in the US.

The world of department stores also participates in cultural prizes or acts as a sponsor. In the US, Neiman Marcus has 3 fashion awards which were given to Brunello Cucinelli, Loewe’s artistic director Jonathan Anderson and shoe designer Amina Muaddi. The department store will invest in merchandising, brand marketing and in-store experiences to promote these brands to its customer base. Closer to the IADS, the Manor Cultural Prize offers an opportunity to discover a wide range of emerging artists throughout Switzerland. For more than 40 years, the prize-winning artists have had exhibitions of their work throughout the country.

In terms of sponsorship, in 2022, Galeries Lafayette Group renewed its support for the international contemporary art scene by becoming a partner for emerging art galleries during the first-ever edition of Paris+ by Art Basel. The Group supported and boosted the visibility of 16 galleries and artists. Also, the group runs Lafayette Anticipations, a foundation supporting contemporary creation. The Foundation acts as a catalyser, providing artists with unique conditions to produce, experiment and exhibit their art.

Beyond retail: becoming a cultural ecosystem

Big luxury brands have always had privileged relationships with the art world in many ways, from product offerings (think Yves Saint Laurent’s Van Gogh sunflower jacket and Mondrian dress) to brands sponsoring art institutions (Chanel and Rolex being Paris Opera’s major sponsors) or art museums (Pinault Foundation in Venice and Paris and Louis Vuitton Foundation in Paris). Art and commerce have always been a great match and it’s only growing.

Since December 2022, the Louis Vuitton Dream exhibition is held in their Paris HQ, celebrating 160 years of creative exchanges with artists such as Jeff Koons and Yayoi Kusama. The exhibition includes a curated gift shop and a famous pastry chef restaurant offering logo-stamped cakes. Overall, Louis Vuitton is doing more than ‘only’ transforming into a luxury lifestyle brand: the value proposition is now to dress, eat, drink, sleep (they will open a hotel), and soon read and watch Louis Vuitton. It’s a complete mental ecosystem. And speaking of watching, Kering’s Saint Laurent launched a motion picture production company in 2023 with a first venture financing the latest Pedro Almodovar movie. Also, LVMH’s Loewe entered the world of high-end design with an exhibition held as part of the 2023 Salone del Mobile in Milano: building on their reputation for craftsmanship, they showed different weaving techniques in various materials to reinvent humble chairs. Chairs were sold out in minutes.

In the word of department stores, Flannels is currently rethinking the role of its London flagship store. They opened a new space dubbed Flannels X. Rather than a space designed to sell products, it is meant to become an ever-evolving cultural playground of pop-ups, gigs and exhibitions for cultural creators to exchange and broadcast ideas. On the occasion of Beyoncé’s tour coming to London at the end of May 2023, Flannels X had a pop-up store showing a big part of the Beyoncé x Balmain couture collection for the first time, and also selling merchandise from Beyonce’s Renaissance World Tour. This initiative positions the store at the intersection of luxury and pop culture to offer more experiences and reach younger audiences.

In Hong Kong, on top of their art village, art collection, art space and events, K11 malls launched its Art Foundation, a non-profit organisation dedicated to fostering the development of Chinese contemporary art. Committed to supporting artists and young curators through exhibitions, artist residencies, and educational programmes, the foundation also established partnerships with leading art and cultural institutions around the world, Centre Pompidou in Paris, and the Metropolitan Museum of Art in New York among others.

Since their inception, department stores have always been cultural stakeholders. Their remarkable architecture, the size of the stores, the unprecedented abundance of products and the revolution they initiated in buying and selling made them an essential part of the Zeitgeist.

They lost a bit of their grip over the past decades. While fashion usually is department stores’ main source of revenue, cultural goods and footprint can for sure contribute to improving the shoppers’ journey (if not generate turnover), not to mention how acting as a cultural player can contribute to creating the experiences consumers are looking for.

Credits: IADS (Christine Montard)

Printable version here

ChatGPT constantly made the headlines for the past 9 months and its adoption was massive (it reached 100m monthly active users in January 2023, 2 months after its launch. For comparison, it took 9 months for TikTok and 2,5 years for Instagram to reach the same amount of MAU). However, ChatGPT is just the tip of the iceberg, more precisely a ‘demo’ product showing to the general public the capabilities of Generative AI (a system able to answer queries, or ‘prompts’, after having been trained on large amounts of data, and therefore capable to bring answers which are going further than simply mimicking the data it learnt).

Generative AI has already started to disrupt many industries and retail is no exception. This is the reason why IADS invited Cyrille Vincey, Partner in Advanced Analytics at Bain & Company, to provide IADS member CEOs with more information and give a few examples of use cases in retail.

Cyrille Vincey has been in data science for 25 years in various industries, always obsessed with bridging business matters on one side, with technology and data science on the other.

After having started his career at a software publisher, applying operational research and graph theory approaches to supply chain optimization, he founded a data science startup, later acquired by an e-commerce player. He then took on a CDO role and shipped a large-scale audience-sharing platform used by 8,000 e-retailers.

As a consultant, Cyrille has been working primarily in the retail industry and assisted on most of the tech M&A deals in Europe, including ad tech, digital trust and enterprise software. At Bain, he fosters the next generation of data-enabled consultants and works closely with Open AI in the framework of the Bain x Open AI alliance.

He defines himself as a ‘data nerd’, a ‘tech guy’ who has been in tech entrepreneurship for 25 years and half-jokingly opened his presentation by mentioning that, now that AI is a commercially available product, people like him are not needed anymore, as businesses and organizations now only need software engineers to plug pipes and coordinate the new AI-powered tools available at hand.

Generative AI: landscape and perspectives

What are we talking about?

Generative AI, and large learning language models (LLMs), represent a new paradigm of artificial intelligence, which unlocks advanced capabilities to replicate human capabilities (perceive & understand, communicate & create, reason & plan, act & use tools). For instance, ChatGPT can complete a poem when fed with the beginning of it, based on the probability of the words’ occurrences.

The 2 root causes for this breakthrough are a 2017 research paper from Google describing a new architecture for deep learning models and the fact that IT costs for training this new type of model have been consistently falling for the past 3 years, by a factor of 100 (even though a training iteration for a large company would still cost EUR 20m today, that’s still a bargain when compared to the cost 3 years ago).

Vincey remarked that while OpenAI made a big splash with ChatGPT, the winners of this new arms race might be very well Google and Microsoft, who have the pipelines needed to integrate and scale this tech, make it available to the general public, and disrupt the way companies operate by providing them with new tools.

He also stressed the fact that ChatGPT is just a demo layer of a larger model, GPT, a text-to-text model. There are also other OpenAI products: Co-Pilot (text-to-code), Whisper (speech-to-text), Dall-E2 (text-to-image), Clip (image-to-text). This product portfolio will be questioned in Q4 2023 with the release of a general model proposing a multi-modal convergence (users will be able to use whatever form of input, text, image, speech or code, and to choose the form of the output they want as well). Vincey is convinced that this first general model will encourage the appearance of new applications still unheard of today. For instance, an entire PDF can be analyzed by this new model, and relevant parts can be extracted for use in a specific given context.

An impactful breakthrough in all industries

These new-gen AI-powered tools are fundamentally built with a general purpose in mind, while the previous models (IBM Watson, Einstein…) were built with a specific purpose. Generative AI models can be used out of the box by companies and applied to every internal use case. Therefore, AI innovation projects within organizations now take weeks, if not days, and not 6 months anymore like they used to. This allows industrializing innovation and experimentation with very limited time and costs. Companies who are late in AI-powered decision-making process investments, use Gen AI to leapfrog and do quite advanced things.

Generative AI does not, however, replace the existing quantitative AI-based decision models relying on machine learning and operation research, as it is not, by no means, a one-size-fits-all solution. Instead, it completes them by providing the possibility to bridge the decision taken thanks to the quantitative model, to stakeholders (partners, suppliers, clients, employees…), with adapted context. Gen AI is the ‘last mile’ of the decision-making process. For instance, if a company has invested in a quantitative AI tool to monitor prices and define the best price to be offered, Gen AI will generate ready-to-use pitches for negotiation with suppliers supporting the commercial team in charge.

How does it change business?

The shifts created by the rise of Gen AI have impacted all aspects of businesses and organizations. From a tech perspective, there are no more barriers. Now that AI is a commercial product, in-house development

does not make sense anymore and is not a strategic advantage. The focus now is on the use case play, rather than ensuring that the use cases can be powered. Companies are rushing to find applications for this new capability.

From a general business perspective, all industries are impacted. AI is a mature and business-ready tech, and finding the right way to use it is a competitive advantage, especially in low-margin sectors such are retail. Vincey mentioned that only 1/3 of the use cases developed at Bain are customer-facing solutions, while the remaining 2/3 are backstage efforts on productivity.

Now that tech is just a product that can be bought off the shelf, companies have only one strategic asset: their proprietary data. The urgency is to define the best opportunity how to combine AI products with company data. In that game, companies can either decide to be the first mover or the fast follower. All options are valid.

The impacts in terms of new needed mindset, capability to test, risk and encourage innovation within organizations, are heavily felt and visible. This is why phasing is key:

• The first phase is to develop and deploy Gen AI tools in employee assistance, to save time, limit errors and increase productivity (for instance, to help employees better recommend products to their customers),
• The second phase is to see AI as a co-pilot, proactively making propositions. For instance, AI can manage real-time customer engagement.
• The third phase is to consider full automation. Carrefour’s new chatbot takes over the relationship between the e-commerce website and the customer.

A tectonic shift in retail and for department stores

There are 4 current archetypes across industries on how Gen AI is used:

• Content generation, including images and assets. Coca-Cola now uses a platform based on GPT-4 and DALL-E to create artwork based on company archives and A/B test them at scale (millions of copies are created and tested automatically, vs. 2 in the past, which were developed by a third party). Carrefour uses Gen AI to deal with product data management (product descriptions).
• Advanced analytics, such as a predictive NPS based on conversations. Morgan Stanley has developed a model to help their advisors with AI ‘listening’ to their conversations and making product suggestions in real-time.
• Personalized chatbots, such as Carrefour which has developed a conversational grocery shopping chatbot, are able to make recipe proposals according to customers’ needs, adjust them and propose a full cart of

products needed to make such meals.

• Information retrieval, where syntheses are generated from unstructured data. Salesforce is developing a tool which generates AI-powered content for CRM across the data available in all Salesforce clouds. The Carrefour case perfectly illustrates the capability offered by Gen AI to leapfrog and quickly implement new services and usages: the chatbot, addressing a website with 15m MAUs, has been developed in 6 weeks between kickoff and going live. It can propose a list of menus according to the dietary requirements of the customer, adjust them, and suggest a shopping cart with the right quantity of ingredients needed, in a given budget. Only 10% of the whole development needed specific information from Carrefour, the rest came from the learning capabilities of GPT.

Where in the value chain Gen AI can impact retail?

The answer is simple: everywhere, both in customer-facing operations and backstage.

• In the outreach part, marketing is enhanced with tailor-made propositions customized at scale, which in turn provide the company with a smart view of the customer (for instance, Carrefour has now access to the

customer’s decision-making process easily as it can monitor it in real-time thanks to the client’s interactions with the chatbot), while, in terms of internal processes, Gen AI can help in RFP creation, vendors communications and negotiations, as well as category recommendations.

• In the “decide & buy” part, Gen AI impacts personalized targeting, product information (which is dynamically managed), checkout & payment, and customer service. It also impacts operations (employee enablement,

report generation, product design…) and HR.

• In the “receive & return” part, AI can help with the delivery scheduling and tracking, and provide help with returns, which are also more easily processed internally.
• Finally, in the” use” part, AI impacts customer connectivity and loyalty, and efficiency.

For Vincey, the impact of Gen AI is virtually unlimited. Some tests have been made on the supply part of Carrefour’s business, and GPT proved able to analyze and score RFPs on a quantitative and qualitative basis and recommend modifications that proved correct to buyers.

Bain noted from their own experiences with their customers that the productivity gain is on average +30% in the back office with the use of Gen AI.

Reimagining product categories and customer experiences

For department stores interested in beauty and fashion, he mentioned that Gen AI was specially adapted to 5 main use cases:

• Marketing campaign booster,
• Website content optimization,
• Community management,
• In-app beauty coaching,
• In-store beauty advisor personal assistant for salespersons

When it comes to customer experience exemplifications, Vincey showed a few demos of actual use cases:

• The US-based insurance company USAA uses a combination of GPT and DALL-E to create dozens of personalized ad copies according to a specific customer profile and a problematic, and A/B test them at scale,
• Adidas uses GPT in social media, where Gen AI makes proposals of answers to be sent to customer comments, in order to generate interaction,
• USAA uses GPT in up-sale and cross-sale with the analysis of credit card history, it can make mass-personalized emails (that can be also tweaked with external information) to be sent to customers.

*How can retailers move forward?

As of now, there are three ways for companies to address the challenges and opportunities created by Gen AI:

• Some decide to go into a full 360° transformation journey, based on a leap of faith, and the purpose is to go fast in the transformation in order to reap market share and reduce the cost of operations. This is the case with Coca-Cola or Carrefour.
• Some see Gen AI as a use case acceleration and adopt a test & learn approach with 1 to 2 use cases, which are developed and implemented quickly, to prove out the opportunity and identify the requirements for scale. This bottom-up strategy allows them to act and then strategize.
• Finally, some companies are voluntarily slower in their approach and decide to identify the value at stake by looking at their most critical use cases opportunities compared to their business strategy, and then implement those projects with a top-down approach.*

Whatever the option is chosen, no retailer has the choice to ignore what is going on now with AI, as the risk would be to be left on the side of the road. The change is equivalent to the 1990s when PCs and Internet invaded office spaces, with the difference that this change took place in 10 years, whereas now the timeframe for adaptation is much more reduced. For instance, at Bain, the technology component of the organization involves 1,500 technologists, including 400 data scientists, of which 150 specialized in text mining and analytics. In the course of only one year, these 150 people got rid of their in-house toolbox of natural language processing techniques, and now exclusively use GPT. The disruption in the consulting field is huge, and retail should expect a similar shift.

Vincey also reminded the audience that Gen AI is a great way to catch up with big tech as the leverage effect can be huge, not only in terms of business approach or organizational processes but also in terms of company mindset. It is all about granting the right to the teams to innovate, test and learn, sometimes at the risk of making mistakes.

For that reason, change can only happen if CEOs show the way and encourage such behaviour, if these tests do not take place in the mission-critical part of the business.

Credits: IADS (Selvane Mohandas du Ménil)

Printable version here

Europe is on a mission to become the world’s first climate-neutral continent by 2050, but this is not a small feat. To achieve such a status, the EU is having to crack down on the way businesses are run and how people conduct their everyday lives in Europe. As a way to reduce the environmental impact caused by retailers, the European Union has started to define and impose new regulations that retailers must comply with. These directives are coming in waves and impacting certain players differently than others, thus raising questions and needing clarification. There are many of these sustainability regulations already in effect, but they are continuing to develop and become more stringent as the EU strives to become more sustainable and environmentally conscious, especially as it seeks to lead the world on the road to a more sustainable future.

Rules, regulations, and directives...the next wave of change

The number of directives, regulations, and reporting standards are multiplying faster than businesses and retailers can keep up. All of these codes are being set up to tackle ways to reverse the damage done by businesses with large value chains that touch various corners of the world. Overall, the objective is to ensure that there is visibility of their operational impacts and measurable metrics that can be used to benchmark and improve. While the number of regulations are many, and often they are being continuously rewritten and replaced as things evolve, IADS members have shared a few key ones that are already impacting their decision-making and investment processes.

The Corporate Sustainability Reporting Directive (CSRD) forces companies to publicly disclose detailed and transparent information on how sustainability issues affect their own business (covering Scope 1 and 2 emissions) and what impacts a business has on people and the environment (covering Scope 3 emissions). To achieve the latter, CSRD will soon require a double materiality assessment which identifies all potential negative and positive impacts connected with the company’s operations and value chain. CSRD aims to create a standard framework for companies to report on their sustainability efforts, thus enabling investors and stakeholders to make informed decisions about investing in sustainable businesses. The CSRD encourages companies to reduce their environmental footprint and contribute to the EU’s green economy.

The EU Deforestation-Free Regulation (EURD) was adopted to ensure that companies curb the impact their operations have on deforestation as well as protect indigenous people’s rights. This regulation mandates extensive due diligence on the value chain for all operators and traders dealing with products derived from cattle, cocoa, coffee, palm oil, rubber, soy, and wood. Risk assessments will have to include a broad view of whether the goods were produced in compliance with relevant local laws and with the informed consent of indigenous people. As the EURD requires a lot of communication and collaboration around the world with remote communities, it will be challenging to achieve compliance without the proper traceability tools (which are not mature yet).

The EU Green Claims Directive aims to set rules on how companies can market their environmental impacts and performance in order to eliminate misleading environmental messaging. As department stores pull together various brands and labels in one marketplace, it is very difficult for them to ensure there are zero misleading claims on the products across all their categories. This directive might eventually require retailers to educate and set their own guidelines for the brands in their stores.

The silver lining: sustainability regulations also present opportunities

Despite the uneasiness that new regulations can bring thanks to the many unknowns and new boundaries set, there are still many ways that businesses can play these new standards to their advantage. There are three main areas of opportunity with the upcoming sustainability regulations that are going into effect: innovation, collaboration, and financial opportunities.

First of all, in order to meet the new guidelines and reporting standards that require traceability and tracking of Scope 3 GHG emissions for benchmarking, there will need to be a lot of innovation. Retail supply chains are disjointed and will require a complete overhaul in order to be able to achieve what these new regulations set out to control.  Unfortunately, this means that the number of solutions and ‘quick fixes’ are multiplying, making it difficult for impacted businesses such as retailers to sift through the noise to understand which tools to adopt and which processes to invest in. While this may seem unclear at the moment, there will be a time when a winning solution will emerge, and it will probably be thanks to a successful use case from a player such as a mega-retailer.

Secondly, department stores and other types of legacy businesses will need to rely on communication and learning from each other's successes and failures in order for the industry to make advancements in these uncharted waters. Collaboration is the next key opportunity to help the industry grow and develop. With the current regulatory landscape, compliance is not simply black and white. Therefore, all businesses need to come together to work towards a common standard which can hold retail adjacent stakeholders accountable for their business practices to ensure everyone is on an even playing field in the journey to advancement. The road to achieving such a standard seems daunting, but there are coalitions and associations such as the Sustainable Apparel Coalition and Amfori that are leading the way in how such benchmarking can be achieved. It is not perfect, but it is an important first step in regard to setting the foundation for collaboration among all players in the retail value chain.

The third major opportunity that retailers should jump on is financial opportunities thanks to low-interest government loans that are being issued to help businesses make their operations more efficient which in turn makes them more sustainable. This kind of financing can allow retailers to significantly reduce energy consumption, leading to lower utility bills and an improved property value. Such investment plans are also key to innovation as technology plays a large role in operation efficiency, therefore the loan can also support digital transformation milestones.  Some IADS members have already taken advantage of such opportunities and found that it is a great way to get the C-Suite on board as it is an opportunity to invest in the business while also meeting regulatory requirements.

As new opportunities emerge, it is important to act now

Overall, the problem that retailers are facing is that regulation is moving faster than technology at this point. This means retailers are having to scramble and rely on piecing together data from various sources and tools in order to come up with the right information to put on their non-financial sustainability reports. Since the regulatory landscape is moving at such a fast pace, it is important for retailers to stay on track, or even better, get ahead of the curve.

A number of IADS members have found that addressing regulatory requirements before they go into effect has been a great strategy to ease the process. For example, CSRD does not require double materiality assessments until 2024, but some IADS members have already started to conduct this evaluation to be sure that the business runs smoothly in the coming year. Acting in advance has also helped ease their minds as the process was much easier than anticipated and they can now focus on ’business as usual’ projects rather than chasing after being compliant.

It is no secret that keeping up with and complying with regulations is extremely complex, but some members have noted that it is especially helpful to build a relationship with EuroCommerce, a retail and wholesale association that informs their members about EU policy and legislation, among other things. This highlights yet again the importance and need for collaboration across industry players.

Conclusion: there is a such thing as first-mover advantage

What is the lesson learned? We continue to echo our latest White Paper ‘Reinventing department stores through sustainability’ in saying that the most important step is to get started and get started now. It is important to recognize that there is no clear path to take, but the longer businesses wait to tackle the new regulations, the harder and more expensive it will be to transition the business.

*Department stores should use these sustainability regulations as ways to make their core business more efficient while taking advantage of government handouts such as low-interest loans, especially while there is still a bit of flexibility in how activities are regulated. It is also key to start building collaborative relationships with all players to not get left out of the important conversations and decisions as to where the industry goes next.

In the retail sustainability landscape, it pays to be a first mover.*

Credits: IADS (Mary Jane Shea)

What:  A piece from the FT on how dynamic pricing is going to be used in more retail verticals in the future.

Why it is important: Retailers need to be technically fit to apply dynamic pricing, but also able to communicate what they do in an acceptable manner to their customers.

Stonegate, the largest pub company in the UK, has introduced a "dynamic pricing" policy a, raising beer prices by 20p on busy evenings and weekends. This move has been met with dissatisfaction by some regular patrons. Dynamic or "surge" pricing, where prices change based on supply and demand, is common in industries like air travel and has been powered in recent years by AI and algorithms. As technology advances and inflation affects profits, more industries are considering its implementation. Critics argue that this pricing strategy can be exploitative and unethical. In some cases, such as after the London Bridge terror attack in 2017, Uber faced backlash and had to refund users due to surge pricing. Another example is the frustration from fans over fluctuating concert ticket prices on platforms like Ticketmaster. Although some businesses defend the strategy for boosting revenues and offsetting costs, others believe it could lead to a loss of trust among consumers if implemented widely in different sectors.

Are you ready for dynamic pricing?

What: A 122-page-long report on the reasons why LATAM is on the rise;

Why it is important: Still seen as a struggling continent, things have moved fast in Central and South America, two regions which enjoy competitive advantages in a polarizing world.

The current transformative changes in Latin America are compared to tectonic shifts, reflecting both challenges and opportunities. This transformation is driven by forces such as the region's potential as an engine of global growth due to its rich resources, a young population, and green energy initiatives. Lessons from economic battles have led to wisdom in managing inflation and interest rates. The region's neutrality benefits from the U.S.-China rivalry, with increased trade and investment. Digital democratization has led to greater internet access, despite data accessibility issues for some. Entrepreneurial spirit is being renewed with improved access to financial and human capital, and significant growth is anticipated in technology value-creation. Brazil serves as a model for digitalizing money, formalizing the economy, and enhancing financial inclusion. Artificial intelligence holds potential for accelerated growth, if managed wisely. However, persistent problems like poverty, education, and healthcare disparities remain, and technology's true power lies in transforming lives for the better.

Is South and Central America the future of worldwide growth?

What: How fashion companies and consumers in export markets might be affected by China’s weakening markets and possible deflation.

Why it is important: China’s weakening economy can have a significant impact on global markets and businesses.

China's economy is showing warning signs, with a slump in manufacturing output, a real estate crisis, and youth unemployment. The decline in the consumer price index (CPI) in July raised concerns about potential deflation and reduced spending and investment. Weak domestic consumer demand and conservative sentiment persist, with more people increasing savings instead of spending. Pent-up travel demand and inflated travel costs contribute to weakness in spending categories.

The target GDP expansion of 5% is considered sustainable compared to previous debt-fueled growth. Risks include contracted manufacturing activity, a potential default by Country Garden, high levels of provincial debt, and growing concerns in corporate boardrooms. Falling prices in China could impact fashion companies and consumers in export markets.

How worried should fashion be about China’s weakened economy? 

What: A piece about tourism and how expectations from international customers have changed.

Why it is important: 2024 tourism will hit 2019 numbers, but with different needs. Retailers need to be prepared.

The Covid-19 pandemic significantly impacted the retail industry, leading to a swift pivot towards e-commerce and new marketing platforms like TikTok. Particularly hard-hit was the travel retail sector, which saw a drastic drop in sales. However, with borders reopening, the global travel retail market, which includes sales at airports, train stations, and other transit hubs, has surged. It grew from US$68.91 billion in 2022 to US$79.05 billion in 2023, with projections reaching US$126.48 billion by 2027. After a drop from US$74.31 billion in 2019 to US$19.7 billion in 2020 due to the pandemic, 2022 saw a recovery to US$55.74 billion.

Nadine Heubel from Reklaim offers three retail tips: prioritize universal operational excellence, utilize sophisticated data collaboration with airlines, and engage passengers throughout their journey. Beauty and fragrance are the leading segments in travel retail, with a growing interest in local and sustainable products, and younger consumers are increasingly drawn to niche beauty brands.

Looking at the recent travel retail evolution

What: Forbes goes in-depth with the example of Petco, which has drastically cut staff while at the same time increasing profit and sales expectations.

Why it is important: There is so much that can be done when cutting on staff, and if objectives are not aligned, it can lead to strategic dead ends like the one Petco seems to be in.

Petco, aiming to differentiate itself from online competitors like Amazon and Chewy, emphasizes its brick-and-mortar presence and in-store services such as grooming, training, and veterinary care. However, since going public in 2021, many of its 1,500 U.S. stores have drastically cut staff, leading to decreased store cleanliness, improper animal care, and longer wait times. These staff cuts undermine Petco's store-centric strategy. Moreover, while the company has invested in in-person services and opened several vet hospitals in stores, it recently lowered its profitability expectations due to reduced discretionary spending by shoppers. Critics argue that while Petco claims its advantage is its physical stores, its actions of reducing staff contradict this. Petco's financial challenges also include managing a $1.5 billion debt, facing increased interest rates, slowing investment, and undergoing stock price declines. Allegations of improper animal care have emerged, with inspections revealing inadequate conditions in various stores. The company has been historically embroiled in controversies over animal care, facing lawsuits and settlements in the past. While Petco is pushing its paid membership program, Vital Care Premier, staff report that there's immense pressure to secure sign-ups, even with declining benefits. Amidst these challenges, the overall sentiment is that Petco's customer service and care for animals have deteriorated due to the staff cuts.

When staff cuts leads to strategic disalignment: the example of Petco

What: An opinion piece on what is missing in the US retail panorama these days that retailers do not see.

Why it is important: Once again, a US media takes for granted that the department store format is doomed, without realizing that the world of department stores is not limited to the US market, and many innovations are now coming from outside.

The Bass Pro Shops location in downtown Memphis, Tennessee, housed in a massive 32-story metal pyramid, is not just a store; it's an experience. With 535,000 square feet of retail space, it's almost five times the size of the average Walmart. The store features man-made streams, faux cypress trees, and a "lost wilderness" motif that harks back to the old-school department store experience.

This store's grandeur and success highlight a broader trend in retail. While many traditional department stores have struggled and disappeared, there's still a strong demand for well-designed, well-staffed physical stores that offer a unique and pleasant shopping experience. Some recent data points support this:

1. Retail leases are in demand, with more brick-and-mortar stores opening than closing, even in the face of online competition.

1. New stores are often opening in modern or high-end malls in higher-income areas, where customers are less price-sensitive and more willing to pay for quality and a pleasant shopping environment.

1. Some direct-to-consumer brands that initially focused on online sales, such as Warby Parker and Parachute, have accelerated their plans to open physical stores.

1. The Bass Pro Shops example demonstrates that even in a seemingly niche market like outdoor gear, creating an exceptional in-store experience can be a winning strategy.

While online shopping is convenient, it can't fully replace the appeal of in-person shopping. To succeed, retailers need to entice customers into their physical stores by offering something special, whether it's a unique shopping environment, excellent customer service, or exclusive products. The key is to adapt and invest in creating a great in-store experience, catering to the fact that more than 80% of retail purchases in the U.S. are still made in person.

What America needs when it comes to retail: true experience

What: A long and detailed piece from The Atlantic about the questions raided by the degree of data gathered by retailers.

Why it is important: It is important to undertand the general public’s reservations in order to adress them, or to change what is being done.

A Minneapolis teen received Target coupons for baby products before she had even told her father she was pregnant. This alarming accuracy was due to Target's refined marketing algorithms. While it felt like a prediction, Target simply utilized extensive consumer data to offer personalized ads. Retailers collect vast amounts of customer data from online browsing, physical store visits, and smartphone apps. This data helps tailor marketing messages to individuals, potentially altering their buying habits. While this might seem beneficial, it gives companies power to subtly manipulate consumers' desires. Historical buying practices were more egalitarian, with fixed pricing regardless of the buyer's identity. However, with the introduction of barcodes and the internet, personalized pricing and offers based on data became the norm. Modern retailing merges offline and online data, intertwining with tech giants like Google and Facebook. While some view this as empowering, others see it as a breach of privacy that skews democratic ideals. Whether perceived as a violation or a convenience, surrendering personal data seems to be the contemporary price of shopping.

Worries about the customer data gathered by retailers are growing

What: Visibility on the US retail market goes increasingly blurred.

Why it is important: food prices go up, covid-19 comes back and makes customers afraid of public places such as malls, leading to a bonus for online players.

In August, several retailers experienced a decline in food shopper penetration, with varying trends in non-food spending. Walmart saw a rise in consumers buying non-food products, while Amazon experienced a decline. The proportion of consumers purchasing food or beverages in-store also decreased. Shopping mall visits declined significantly, both week over week and compared to four weeks prior. Additionally, there has been a slight increase in the proportion of consumers avoiding public places due to rising Covid-19 cases in some areas. The changing seasons may impact shopping behaviours, with online retail gaining attractiveness during the winter months. Retailers need to consider how pandemic-related concerns and changing public health situations affect consumer behaviour and precautions.

Inflation, Covid: the state of US retail

What: Coresight analyses the Temu phenomenon

Why it is important: Is Temu the new Shein?

Temu is a fast-growing cross-border e-commerce marketplace launched in the US in September 2022 by Chinese company PDD Holdings. It offers ultra-low prices on a wide assortment of merchandise sourced mainly from China.

Temu has seen rapid growth in active users, reaching over 100 million by May 2023, aided by aggressive marketing campaigns. Brand awareness of Temu among US consumers jumped from 48% in February 2023 to 69% in August 2023.

Top ways US consumers discover Temu are social media, online ads, and word of mouth. But the percent of US consumers who say they would purchase from Temu has dropped, despite the low prices.

Top concerns about Temu are lack of supply chain transparency, data privacy, and its Chinese ownership.

Its growth poses a challenge to retailers like Amazon, Shein, Five Below that rely on low prices and young consumers but Temu has reputational issues to overcome related to product quality, data protection, and social responsibility.

Temu growth and challenges in the US, 6 months after

What: An article from HBR about the steps to follow in case holidays were not as relaxing as planned.

Why it is important: The need to be able to answer any potential crisis makes it difficult to fully disconnect even though all CEOs know it is important.

Vacations are meant to be rejuvenating, but they don't always go as planned, and returning to work can be more exhausting than expected. To refresh upon returning from vacation:

1. Take inventory of your health and energy: Assess your energy levels in various domains such as sleep, movement, connection, time outdoors, relaxation, and meaningful engagement. Identify areas that need improvement and take action to reinforce healthier habits.

1. Ease back into work: Transition gradually by setting a day for recovery and transition before diving into full work mode. Consider extending your out-of-office (OOO) message if necessary. Prioritize essential tasks and allocate time for catching up on emails and updates.

1. Reflect on positives and learn from negatives: Savor positive vacation experiences and capture them to share with your team. Reflect on lessons and insights gained from any challenges or disappointments.

1. Use the fresh start effect: Leverage your return to work as an opportunity to establish new, energy-enhancing habits and routines. Focus on sustainable practices that align with your daily life and enhance productivity.

1. Clarify future vacation needs: Learn from your recent vacation experience to plan more rejuvenating future vacations. Consider factors like the level of structure, travel distance, communication needs, and who you want to spend time with to create more fulfilling vacations.

What to do if vacation was not relaxing

What: The Robin Report draws a comparative examination of the 3 main shopping capitals in Europe.

Why it is important: While London is lagging behind, no-one can tell if Paris or Milan are still fit for the expectations of new-gen Asian customers, especially Chinese, after 3 years of pandemic and self-pampering at home.

The retail tourism industry in major European cities, particularly London, Paris, and Milan, faces challenges but also sees potential renewal.

1. Retail Tourism and Asian Shoppers: These cities have relied heavily on Asian shopping tourists, especially from China, to bolster their economies.

1. UK Retail Complexities: UK landlords often lease to shell companies to avoid empty building charges. However, when tax season comes around, these storefronts frequently disappear. London's VAT rebate discontinuation for foreign travelers, post-Brexit, has created economic challenges. Further, London's exclusion from the Schengen visa agreement puts it at a disadvantage compared to Paris and Milan.

1. London's Oxford Street: A prime shopping location, Oxford Street has a mix of luxury stores, major brands, and questionable establishments, like a surge of American candy shops that appeared during the 2020 lockdown, suspected of dubious financial activities.

1. Revitalization Efforts: Local London authorities are aiming to rejuvenate Oxford Street, with widened sidewalks, more plants, public seating, and a new underground line. Efforts also include providing free pop-up spaces to attract innovative retailers.

1. Paris Challenges and Redevelopment: Paris has faced its own set of issues, including protests, political disputes, and high-profile store robberies. However, a major revamp is in progress, with plans to transform the iconic Champs-Elysées into a green corridor by 2030, aiming to prioritize pedestrians over cars.

1. Milan’s Ambitious Plans: Milan is set to undergo an extensive urban rebuild with a 110-hectare mixed-use development and 800,000+ square feet of new stores, readying the city for the 2026 Winter Olympics.

1. Asian Travel Outlook: With delayed passport renewals and visa issuances in China, the expected flood of Asian tourists to Europe has been postponed. However, a surge is anticipated next year.

1. Comparative Analysis: Paris and Milan's grand redevelopment visions for their city centers contrast sharply with London's more modest efforts. London's decision to end tax-free shopping for foreign travelers might push high-net-worth tourists to shop in Paris and Milan instead, although they might still choose to stay in London.

Overall, the future of retail tourism in these cities will be influenced by their respective infrastructural developments, policy decisions, and global travel trends.

A look at London, Paris and Milan as global shopping hubs

What: Brands, regulators and investors aren’t planning for climate change risks that could cost the industry billions of dollars in lost revenue, according to a new report by Cornell University’s Global Labour Institute and investment firm Schroders.

Why it is important: Failure to adapt supply chains to manage rising temperatures and intensifying flooding could lower export earnings from four key manufacturing hubs by $65 billion by 2030 and significantly dent operating profits at exposed brands, the report found.

The fashion industry is inadequately prepared for climate change risks, which could cost billions in lost revenue, according to a report by Cornell University’s Global Labour Institute and investment firm Schroders. Rising temperatures and increased flooding could decrease export earnings from major manufacturing hubs by $65 billion by 2030. This could also prevent the creation of nearly a million new jobs.

Despite the increasing frequency of extreme weather events, many brands, regulators, and investors are not incorporating climate change impacts into their strategies. The report emphasizes that by 2050, the cost of inaction could reduce export earnings in key countries by nearly 70%, or $1.4 trillion. The industry's current approach to supply chain disruptions is to shift sourcing locations, but many of these locations are also vulnerable to climate change. The report suggests that better regulation, binding standards, and adaptation measures, such as energy-efficient lighting and improved working conditions, could mitigate these risks.

How much will climate change cost fashion?

What: Venture fund Andreessen Horowitz takes stock of how customers use AI, 9 months after the launch of ChatGPT to the general public.

Why it is important: ChatGPT is the first entrant but will not be the future, and many opportunities still remain available.

Generative AI (GenAI) has ushered in a new era with ChatGPT leading the charge. Here are key insights on the GenAI landscape:

1. Rise of New Products: Most leading GenAI products (80%) are new. Big tech involvement is limited, with 48% of new platforms bootstrapped.

1. ChatGPT's Dominance: ChatGPT has 60% of the traffic among top 50 GenAI platforms and is the 24th most visited website globally.

1. Categories of GenAI: Chatbots dominate, but AI companions and content generation tools are gaining traction.

1. Competition: No clear leader in many categories, meaning market leadership is still up for grabs.

1. Organic Growth and Monetization: GenAI products are majorly organically discovered and monetized through subscriptions, with users willing to pay higher prices.

1. Mobile vs. Web: GenAI products have primarily started as web platforms, with mobile apps emerging slowly.

In essence, GenAI is changing the digital landscape, bringing new products, offering innovative solutions, and redefining how users interact with technology.

How are consumer using AI: 6 key learnings

What: The situation of the US market is highly volatile.

Why it is important: US consumers have fuelled retail growth in many parts of the world this summer, but this might end soon.

US Consumer confidence, which had seen a rise in June and July, declined significantly in August due to factors like higher gas prices, lower stock prices, and concerns about the labour market and overall business conditions. The Conference Board Consumer Confidence Index fell by almost 8 points to 106.1. Future expectations regarding economic conditions approached the "recession danger zone," dropping close to a reading of 80. The current situation assessment also weakened, with concerns about the labour market and business conditions. Although fears of a recession have decreased slightly, 69% of consumers still view it as likely within the next year. This apprehension is further fuelled by persistent inflation concerns and uncertainties about their future financial situation.

US consumers confidence wanes in August

PRINTABLE VERSION HERE

IADS recently held a meeting all about the Women's Fashion brands to look out for in 2023. Based on market research, IADS and NellyRodi presented a curated selection of 15 brands that are trending right now.

Check out our selection of these brands, and the pictures, by clicking the button below!

Explore The brands and pictures here

OUTDOOR

ECOALF

Ecoalf is a new-era brand the is pioneering ethical fashion by producing clothes made from plastic waste found in the ocean. Their clothes are made for surfing, yoga, pilates, running, cycling and post-workout.

Check out the ECOALF website here

CHECK OUT THE ECOALF INSTAGRAM

ROA HIKING

ROA employs crossover, experimental techniques to shape a product that reflects a hybrid attitude towards the landscapes. ROA takes the sportswear attitude and applies it to outdoor footwear. The brand exalts the

values of functionality through the use of avant-garde materials and construction techniques of performance derivation.

Check out the ROA HIKING website here

check out the ROA HIKING instagram here

ALK PHENIX

A new era of functional fashion. The brand produces Japanese minimalist style products that combine functional materials to create its own technical materials. Innovation and an adventurous philosophy are at the centre of the brand.

Check out the Alk Phenix website here

check out the Alk Phenix instagram here

MATEK

With an atypical aesthetic and style, Matek creates clothes for skiing and snowboarding. The brand has a unique combination of fashion-forward designs and functional performance. Products ensure protection, comfort and mobility even in harsh weather conditions.

Check out thematek website here

Check out the matek instagram here

ACTIVEWEAR

RAPHA

Renowned for its stylish and refined designs that combine style and functionality in its cycling apparel and accessories. Technical innovations are embedded into its products, such as breathable fabrics, ergonomic cuts and reflective detail to enhance comfort and cyclist safety.

Check out the RAPHA Website Here 

check out the rapha instagram here

GIRLFRIEND COLLECTIVE

Known for its body and sporty positive brand attitude. Each pair of leggings are made from approximately 25 recycled plastic bottles. The brand prioritises transparency regarding its supply chain and offers inclusive sizing options promoting body positivity and inclusivity.

check out the GIRLFRIEND COLLECTIVE website here 

check out the GIRLFRIEND COLLECTIVE instagram here

UNRUN

Activewear made by Olympic champions. Effortlessly cool, versatile and edgy products available in a full range of colours. Unrun also has curated a strong community of feminine athletes.

check out the unrun website here 

check out the unrun instagram here

CARDO PARIS

Luxury and premium poolwear brand. Products are an extension of the poolwear style territory into more fashionable and casual products: sophisticated skirts.

check out the cardo paris website here

check out the cardo paris instagram here

ATHLEISURE

VAARA

Contemporary wardrobe tailored to the active body that exudes comfort and elegance. Products are versatile and made with fine materials that are soft and recycled.

Check out the vaara website here

Check out the vaara instagram here

NINEPINE

Swedish brand that produces minimal, aesthetic and technical activewear made out of organic cotton. Clothes are versatile and can be worn both to do sport or relax in the city for any occasion.

Check out the ninepine website here 

CHECK OUT THE ninepine instagram here

7 DAYS ACTIVE

Versatile athletic clothing made of organic cotton. Product design is technical and stylish with bold colours and cuts, graphic prints and retro aesthetics. The brand motto is to inspire individual stories of motion.

CHECK OUT THE 7 days active WEBSITE HERE

CHECK OUT 7 days active INSTAGRAM HERE

COLORFUL STANDARD

Products made in Portugal out of organic cotton and merino wool. The brand embraces an eco-responsible approach to creating sportswear essentials with neat cuts and a wide range of colours.

check out the colorful standard website here

Check out the colorful standard instagram here

TECH-IPMENTS

STARCK X BALISTON

Baliston by Starck is the first collection of AI-augmented shoes to capture biometric data straight from your feet. It is made with just five materials: castor bean yarn, sugarcane, organic cotton, natural rubber and recycled plastic.

Check out the STARCK X BALISTON website here

check out the STARCK X BALISTON instagram here

SUNNTO

World renowned sports watches that are high quality with advanced featured, making them popular among outdoor enthusiasts and professional athletes. The watches are equipped with GPS navigation, heart rate monitoring and activity tracking.

check out the sunnto website here

check out the sunnto instagram here

COWBOY

An electric bike made for urban riders with a sleek design and connectivity capabilities. Each bike is outfitted with its electric motor enabling riders to travel longer distances or tougher terrain with minimal effort.

check out the cowboy website here

check out the cowboy instagram here