What: Global supply chain system faces fundamental transformation as executives acknowledge traditional 'just-in-time' model no longer works in post-globalisation era marked by multiple disruptions.

Why it is important: This transformation highlights how retailers must evolve from cost-focused supply chains to more sophisticated systems that balance multiple competing priorities in an uncertain world.

The retail industry is confronting a fundamental shift in supply chain management as executives recognise that systems built for the globalisation era no longer function effectively. The traditional "just-in-time" approach, which thrived on making products in lowest-cost locations and predictable shipping, has been undermined by multiple disruptions including COVID-19, semiconductor shortages, inflation, extreme weather, and geopolitical tensions. In response, companies are reallocating capital from debt repayments and dividends to supply chain and technology investments, with nearly 40% of executives anticipating double-digit percentage increases in product input costs due to tariffs. Most companies are pursuing diversification of supply chains, supplier base expansion, and manufacturing hub relocation while considering price increases. However, the challenge extends beyond immediate tariff mitigation, as modern supply chains must balance resilience, sustainability, traceability, and circularity with cost-effectiveness, requiring strategic trade-offs and new capabilities.

IADS Notes: The fundamental transformation of retail supply chains reflects broader industry challenges and responses. According to Forbes' January 2025 analysis , retailers are moving beyond traditional operational frameworks, with successful AI implementations showing significant improvements in application development speed and administrative efficiency. Alix Partners' July 2024 report  highlighted how traditional "one-size-fits-all" supply chains are becoming insufficient, requiring segmented product flow strategies to improve inventory turns and reduce costs. McKinsey's April 2025 coverage revealed how retailers are implementing geopolitical nerve centers to coordinate everything from immediate tariff operations to long-term supplier diversification strategies. Forbes' March 2025 analysis showed how retailers are leveraging AI-powered analytics and predictive modeling to pinpoint high-risk SKUs and proactively adjust strategies, with 44% of US imports affected by new tariffs. This comprehensive transformation demonstrates how retailers are abandoning outdated "just-in-time" models in favor of more resilient, sustainable, and responsive supply chain strategies that can better navigate modern challenges.

Beyond tariffs: The supply chain reinvention imperative

What: Social engineering cyber attacks on major UK retailers expose critical vulnerabilities in human-centric security systems, leading to £300 million profit impact at M&S and industry-wide insurance premium increases.

Why it is important: The cascading effect of these attacks, from immediate operational disruptions to long-term insurance implications, signals a critical turning point in how retailers must approach cybersecurity, particularly in managing human factors within extended supply chains.

The Financial Times editorial board highlights how social engineering has evolved from broad societal manipulation to targeted cyber attacks that exploit human vulnerabilities in retail operations. The recent attack on Marks and Spencer exemplifies this trend, with criminals accessing systems through third-party supplier manipulation, resulting in a projected £300 million reduction in annual operating profits and £750 million in lost market value. The breach forced M&S to suspend online clothing sales and compromised customer data, though banking details remained secure. This incident is part of a broader pattern affecting major retailers including Harrods and Co-op, attributed to the Scattered Spider hacker group, which previously targeted MGM Resorts and Caesars Entertainment. The situation underscores how even well-prepared companies with substantial security investments remain vulnerable, particularly through their extended supply chains and third-party relationships. The editorial emphasises the need for enhanced security measures, including improved ID controls, staff training, and regular incident response planning, as ransomware attackers increasingly target commercial enterprises over traditional infrastructure targets.

IADS Notes: The recent cyber attack on M&S exemplifies a critical shift in retail sector vulnerabilities, particularly through social engineering tactics. In April 2025, the Scattered Spider group's sophisticated attack on M&S caused devastating financial impacts, disrupting £3.5 million in daily digital sales and wiping £700 million off their market value. This incident triggered a chain reaction across the UK retail sector, with both Harrods and Co-op suffering similar breaches by May 2025. The widespread impact has transformed the cyber insurance landscape, driving a 10% increase in premiums across the retail sector. This aligns with broader industry data from April 2025 showing that ransomware now accounts for 30% of retail security incidents, with average losses reaching £1.4 million per attack. The severity of these threats is further evidenced by M&S's unprecedented insurance claim of up to £100 million, marking one of the largest such payouts in UK retail history.

In cyber attacks, humans can be the weakest link

What: AI technology is rapidly transforming fashion's creative roles, pushing professionals to redefine their value proposition.

Why it is important: This development represents a critical turning point for retail creativity, as professionals must balance AI adoption with maintaining authentic human input.

The fashion industry is experiencing a fundamental shift as artificial intelligence increasingly takes on creative functions traditionally reserved for human professionals. This transformation extends beyond routine tasks to include sophisticated creative roles such as photography, styling, and PR strategy. Industry leaders like H&M are already implementing AI-generated visuals with digital twins of real models, while some brands explore the concept of "AI creative directors." However, successful adaptation requires professionals to leverage AI as a tool while emphasising distinctly human strengths such as emotional intelligence, cultural fluency, and authentic storytelling. The industry is developing best practices, including documentation requirements for creative processes to protect intellectual property and demonstrate original human input. This evolution is particularly evident in emerging brands like Zhai, where AI assists with marketing while human creativity drives strategic decisions and brand vision.

IADS Notes: Recent developments underscore this transformation in retail creativity. According to October 2024 data, 87% of retailers implementing AI reported revenue increases of 6% or more, while maintaining brand authenticity. By February 2025, the integration of AI in creative processes led to significant efficiency gains, with some retailers achieving 15-30% improvement in creative operations. However, March 2025 data reveals that successful scaling remains a challenge, with only 10% of retailers effectively implementing AI across creative functions. This suggests that while AI adoption is crucial, maintaining the balance between technological efficiency and human creativity remains essential for retail success.

AI is coming for fashion’s creative class

What: EY Future Consumer Index reveals 52% of Indian consumers are switching to private labels, with 70% recognising improved quality in store brands and 74% noting increased availability.

Why it is important: This significant shift in consumer behavior demonstrates how retailers' strategic investment in private label quality and visibility is reshaping brand dynamics, potentially transforming the future of retail competition.

The EY Future Consumer Index reveals a fundamental shift in Indian consumer behavior, with 52% of shoppers switching to private labels. This change is driven by evolving perceptions, as 70% of consumers now believe these brands provide better quality products that meet their needs as effectively as traditional branded options. Retailers have responded strategically, with 74% of consumers noticing increased private label options in stores and 70% observing their prominent placement at eye level. The economic impact is significant, with 69% of consumers reporting cost savings through store brands. While price sensitivity remains important, with 59% only purchasing branded products during sales, the study shows that 47% would return to branded products for superior quality or performance. The findings also indicate that 44% of consumers are willing to pay premiums for enhanced product performance, particularly in categories like clothing, beauty, and personal care.

IADS Notes: The EY Future Consumer Index findings on private labels reflect a transformative shift in retail dynamics. This trend aligns with broader industry developments, as evidenced by private brands reaching record highs in unit (23%) and dollar (20%) market shares by mid-2024. The evolution in consumer perception, with 70% viewing private labels as quality alternatives, mirrors successful strategies seen at major retailers, where Walmart launched its premium Bettergoods line while Target introduced the value-focused Dealworthy brand. The economic context is particularly significant, as retailers respond to changing consumer behavior by expanding private label offerings, with companies like Target generating over USD 30 billion in annual sales from nearly 50 private brands. This transformation extends beyond mere price competition, as demonstrated by the comprehensive approach to private label development, where retailers are investing in both premium and value segments to meet diverse consumer needs.

52% of Indian consumers are switching to private labels

What: Series of coordinated cyber attacks on M&S, Harrods, and Co-op reveals retail sector's systemic weaknesses in data security and operational resilience.

Why it is important: These breaches demonstrate how cybersecurity has evolved from an IT issue to a core business risk, directly impacting market value, customer trust, and operational capabilities.

The UK retail sector faces an unprecedented cybersecurity crisis as major retailers grapple with sophisticated attacks. Marks & Spencer's systems were infiltrated in February, forcing the suspension of online orders and disrupting contactless payments. The breach resulted in a £700 million market value drop and affected hundreds of employees, particularly remote workers. Similar attacks on Harrods and Co-op underscore the industry's vulnerability, while global incidents at Latitude Financial in Australia and various US retailers highlight the international scope of the threat. The digitisation of retail operations, including loyalty schemes and retail media networks, has expanded the attack surface considerably. These breaches demonstrate how cybersecurity now affects every aspect of retail operations, from brand equity to customer trust. The incidents have prompted a fundamental shift in how retailers approach security, moving from viewing it as merely an IT function to recognising it as a critical business imperative.

IADS Notes: The recent wave of cyber attacks on UK retailers reflects a dramatic escalation in both frequency and sophistication of threats to the sector. As reported in April 2025, the Scattered Spider group's attack on M&S proved particularly devastating, wiping £700 million off their market value and disrupting £3.5 million in daily digital sales. This incident triggered a chain reaction, with both Harrods and Co-op suffering breaches by May 2025, the latter exposing data of up to 20 million customers. These attacks have transformed the cyber insurance landscape, driving a 10% increase in premiums across the UK retail sector. Industry research from April 2025 reveals that ransomware now accounts for 30% of retail security incidents, with average losses reaching £1.4 million per attack, while third-party breaches represent 41% of reported incidents.

Cybercrime in retail: Trust is now at risk but that creates an opportunity

What: HR Central conference highlights retail sector's shift toward value-driven employment practices, combining technological innovation with enhanced focus on employee well-being and safety.

Why it is important: This development illustrates retail's strategic response to changing workforce dynamics, where success depends on aligning organisational values with employee expectations while leveraging technological innovations.

At the recent HR Central conference in Birmingham, retail industry leaders highlighted the increasing importance of value alignment between employees and employers. Primark's store people & culture business partner, Zoe Broadway, emphasised how employees are more likely to evaluate companies based on shared values, leading to initiatives like assigning HR partners to junior leaders. Astrid & Miyu has integrated values into their recruitment process, prioritising cultural fit over skills and enabling video applications to better express candidate personalities. The industry is also addressing workplace safety concerns through technology, with body-worn cameras reducing aggressive behaviour by 75% in supermarkets. Sue Ryder's EDI networks have demonstrated success in creating belonging and respect among employees, while experts emphasise the continued importance of human interaction despite AI implementation. The discussion of AI's role focused on augmenting rather than replacing human capabilities, particularly in middle management where skills development and personal interaction remain crucial.

IADS Notes: The retail industry's approach to workplace values and AI integration reflects a fundamental transformation in employee engagement. According to Forbes' March 2025 coverage , leading retailers are achieving 4.5% annual productivity growth by redefining efficiency through AI integration while maintaining focus on human capabilities. Inside Retail's April 2025 analysis  revealed that while companies are investing heavily in AI, success depends more on cultural transformation and employee engagement than technological implementation, with only 10% of retailers successfully scaling their applications. Inside Retail's April 2025 report  highlighted the emergence of an "Empathy Paradox" where algorithmic precision in recruitment and management paradoxically leads to increased turnover and decreased satisfaction when human elements are overlooked. BCG's January 2025 coverage  showed that 67% of executives are considering autonomous AI systems, yet 76% acknowledge significant room for improvement in cybersecurity and employee data privacy. The industry's focus on values alignment, employee safety, and EDI initiatives demonstrates how retailers are balancing technological advancement with human-centric workplace practices.

Employees increasingly valuing values

What: Simon Property Group demonstrates resilience through strategic global expansion and effective asset management, achieving record occupancy rates while expanding its premium outlet portfolio in Asia.

Why it is important: The company's successful expansion in Asia, particularly in emerging markets, showcases how traditional mall operators can evolve while maintaining core market strength, providing a blueprint for retail property groups navigating between mature and developing markets.

Simon Property Group's first quarter results reflect a company successfully balancing domestic stability with international ambitions. Despite economic headwinds, the company achieved a 5.0% revenue increase to $1.47 billion, maintaining an impressive 95.9% US portfolio occupancy rate. The strategic expansion continues with the successful launch of a fully-leased premium outlet in Tangerang, Indonesia, featuring 150 brands including luxury names like Bally and Versace. This development, strategically located near Jakarta's international airport, serves a metropolitan area of 30 million people. While sales productivity has plateaued at $733 per square foot, the company's innovative approach to space utilisation, including plans to double rent through the subdivision of former Forever 21 locations, demonstrates its adaptive capabilities. CEO David Simon maintains a cautiously optimistic outlook, particularly regarding international markets, while taking a measured approach to development pipeline management.

IADS Notes: Recent developments underscore Simon Property's strategic evolution. In January 2025, the company strengthened its European presence by acquiring The Mall Luxury Outlets in Italy for €350 million. This followed strong performance in December 2024, with a 6.4% increase in mall traffic. The success of their "Meet Me @themall" campaign launched in October 2024 demonstrated their ability to attract younger consumers, while maintaining a 96.2% occupancy rate. The company's March 2025 introduction of new data capabilities further showcases its transformation from a traditional mall operator to a sophisticated retail media network provider.

Holding ground at home, betting on Asia: Inside Simon Property’s global strategy

What: Women CEOs excel in balancing polarities in leadership, combining purpose-driven vision with operational excellence to navigate today's complex retail landscape.

Why it is important: With only half of major retailers meeting the 40% women in leadership target despite strong board representation, understanding how successful women CEOs navigate leadership challenges provides vital insights for advancing gender diversity in retail executive roles.

The evolving retail landscape demands leaders who can effectively navigate opposing forces, and women CEOs are demonstrating remarkable success in this arena. These leaders excel at balancing confidence with humility, decisiveness with empowerment, and professional demands with authenticity. Their approach is characterised by a strong sense of purpose that drives bold vision-setting while maintaining genuine connections with teams and stakeholders. Research indicates that women tend to score highly in critical areas such as relational competencies, systems thinking, and purpose-driven leadership—precisely the attributes needed in today's complex retail environment. Despite these strengths, women remain underrepresented in CEO positions, with only 52 Fortune 500 companies having women at the helm. However, those who have reached the top demonstrate how to harness traditionally feminine leadership qualities without compromising on business outcomes. They achieve this by building strategic networks, thinking holistically about business challenges, and maintaining an integrated approach to work-life dynamics. Their success offers valuable insights for the retail industry's ongoing transformation, particularly in developing future leaders who can embrace both human-centric and technical aspects of leadership.

IADS Notes: The article's insights about women CEOs' leadership styles are powerfully validated by recent industry developments. In March 2025, while FTSE 350 retailers achieved 42% female board representation , the challenge of translating this into executive roles persists, making the article's discussion of leadership polarities particularly relevant. This is exemplified by El Palacio de Hierro's historic appointment of Eléonore de Boysson as its first female CEO in May 2025 , demonstrating how women leaders can successfully balance purpose-driven vision with operational excellence. Similarly, Printemps Group's February 2025 appointment of Maud Barrionuevo showcases how retailers are increasingly valuing leaders who can combine human-centric skills with digital transformation capabilities. This trend is further reinforced by Saks Global's January 2025 restructuring under Emily Essner , where relationship-building strengths are being successfully integrated with technology-driven approaches, validating the article's emphasis on embracing leadership polarities.

The inner game of women CEOs

What: A new strategic approach to corporate sustainability advocates using business value, stakeholder influence, science, and purpose to identify and prioritise ESG initiatives that truly matter.

Why it is important: With research showing that one-third of shoppers prioritise eco-friendliness and successful retailers achieving significant benefits through focused sustainability initiatives, this strategic approach helps companies navigate the complex landscape of ESG priorities.

Harvard Business Review's framework for corporate sustainability strategy addresses the critical challenge of companies spreading their efforts too thin across multiple ESG initiatives. The approach introduces four essential lenses: business value, stakeholder influence, science and technology, and purpose, designed to help companies identify truly material issues deserving strategic focus. This methodology balances external pressures with internal capabilities, emphasising the importance of data-driven decision-making while acknowledging stakeholder perceptions. The framework suggests that companies should invest most significantly in issues that appear at the intersection of all four lenses, ensuring both meaningful impact and efficient resource allocation. Using Keurig Dr Pepper as a case study, the article demonstrates how this focused approach can lead to innovative solutions and strategic clarity, ultimately helping companies move beyond scattered sustainability efforts to create lasting environmental and business value.

IADS Notes: Recent retail industry developments validate the importance of focused sustainability strategies. The EU's 2025 revised sustainability directives are compelling retailers to be more selective in their ESG initiatives, while Bain & Company's research reveals 60% of consumers showing increased concern about climate change. IKEA's successful transformation strategy demonstrates how focused sustainability initiatives can balance environmental responsibility with commercial viability. This strategic approach becomes increasingly critical as research shows nearly one-third of shoppers prioritising eco-friendliness, highlighting how companies that effectively narrow their sustainability focus can better meet evolving consumer demands while maintaining operational efficiency.

Getting strategic about sustainability

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CHECK OUT THE PHOTOS OF Jakarta's retail scene

Indonesia, the largest economy in Southeast Asia and the fourth most populous country globally, with 289 million inhabitants, consistently maintains robust GDP growth, often hovering around 5% annually in recent years. Economic indicators such as stable inflation, manageable public debt ratios, and growing foreign direct investment reflect a healthy macroeconomic environment. The country’s strength lies in its abundant natural resources, diverse manufacturing base, and rapidly expanding service and digital sectors, supported by a large, youthful population driving domestic consumption.

And yet, the retail market remains relatively unknown to foreigners. Retail contributed 10.7% of the national GDP and is expected to reach a total sales value of USD 242bn by 2024. E-commerce, which represented 11.5% of total retail sales in 2022, is expected to reach 21.8% by 2027, following the COVID-19 pandemic-induced acceleration. Thanks to an increasing omnichannel approach, retail is expected to grow at a 4.7% CAGR through 2030, opening many opportunities for national and international players. This IADS Exclusive is the first about Indonesia. It aims to provide a preliminary understanding of one of the leading national players, Metro Indonesia, following a one-day IADS market visit in June 2024.

A regional history: from Indonesia to Singapore, to Indonesia again

Metro’s roots date back to 1953, when Mr. Ong Tjoe Kim, an immigrant from Fujian (China), founded the very first Metro store in Surabaya, the second-largest city in Indonesia. He had learned the ropes at the Toko Dezon department store, where over 25 years he rose from a junior position to become the manager of seven branches. Passionate about Hollywood, he named his company after the MetroGoldwin-Mayer film studio.

Quickly realising the potential of the Singaporean rapidly modernising economy and eager to make the most of an emerging middle class keen to embrace new styles, he moved to the city-state and opened his first Singapore-based outlet in 1957 on a site that is now the Singapore Treasury Building. A new store was opened on the famous Orchard Road in 1965, at the Liat Towers, and was relocated in 1973 nearby on Scotts Road and renamed Metro Orchard. That same year, the company was listed on the Singaporean Stock Exchange and expanded into new areas.

The company entered real estate, construction and building, supermarkets, software and banking. On the retail side, new stores opened: the Metro Golden Mile store in 1974, the Metro Grand at Lucky Plaza in 1978 (the first luxury department store with branded shop-in-shops), and suburban locations: Tampines in 1996, Causeway Point and Woodlands in 1998, Sengkang in 2002. More central locations were opened at City Square in 2009 and Paragon in 2014. Since then, most of the stores have been closed (Tampines in 2007, Sengkang and City Square in 2015, and Centrepoint in 2019), and today, Metro only operates Paragon and Causeway Point in Singapore. Despite this downturn, Metro had established itself as a Singaporean household name over 60 years, recognised for its department stores that offer clothing, cosmetics, household goods, and accessories under one roof.

While overseas operations were also undertaken (Metrojaya in Malaysia in 1976 as a joint venture, with the stakes later sold, Metrocity in Beijing in 2007 after several real estate projects conducted in China), it is notable that the company re-entered Indonesia in the early 1990s, when the country was experiencing its own consumer surge. At the time, Indonesia’s economy was on an upswing under Suharto’s New Order government. Urbanisation and rising disposable incomes made major cities like Jakarta attractive destinations for international and regional brands. Although Indonesia had a tradition of local retail, the market was not yet saturated with foreign players, with room for an upscale department store chain that could introduce a curated range of international and local brands presented in a comfortable, contemporary environment.

In 1991, Metro took the leap and opened its first Indonesian store at Jakarta’s Pondok Indah Mall, a shopping centre that soon became a symbol of affluent suburban retail culture. Located in an affluent residential area of South Jakarta, the mall catered to a clientele ready to embrace international retail concepts. Rather than simply replicating the Singapore model, Metro localised its merchandise mix and ambience in a 93,000 sqm store focusing on offering quality apparel, cosmetics, homeware, and accessories that appealed to a growing Indonesian middle and upper-middle class.

This successful start encouraged Metro to expand further at Plaza Senayan, a landmark mall opened in 1996. Known for its high-end positioning, Plaza Senayan mirrored the upscale department store environment that Metro sought to cultivate. The synergy between Metro’s brand identity and these premium shopping complexes fostered a favourable retail ecosystem, where customers could expect attentive service, a broad selection of international brands, and a pleasant overall shopping experience.

As it expanded, the company diversified its product portfolio. Beyond high-quality apparel, the stores became known for their curated cosmetics and fragrance sections and home and living departments. This diversification was vital as it positioned Metro as a lifestyle destination, a one-stop shop for various categories of goods, appealing to a broad spectrum of customer preferences.

The late 1990s, however, brought challenges as the Asian Financial Crisis of 1997-1998 severely impacted Indonesia’s economy, weakening the rupiah and eroding consumer confidence. Although it targeted middle and upper markets severely affected by the crisis, Metro weathered the storm by focusing on careful inventory management and customer experience.

By the early 2000s, Indonesia’s economy began to recover. The middle class regained purchasing power, and shopping malls proliferated across Jakarta and other major cities like Surabaya, Bandung, and Makassar. Metro seized this renewed momentum by partnering with reputable mall developers and opening new stores: Bandung Supermal (2001) and Mal Taman Anggrek (2002).

To further support development, Metro Holdings, based in Singapore and licensing its name to its Indonesian subsidiary (Metro Indonesia), signed a franchise agreement with CT Corp, an Indonesian company originally rooted in finance and banking. In 2010, CT Corp also signed a deal with Carrefour, acquiring 40% of Carrefour Indonesia operations (fully acquired by 2013). Revenue from hypermarket activities allowed CT Corp to open new stores: Makassar (2010), Ciputra World (2011), Gandaria City in Jakarta (2012), and Solo (2013), solidifying Metro’s status as a national Indonesian retail name.

In 2019, Metro Holdings divested Metro Indonesia for € 17.7 m and licensed the name to CT Corp, which acquired all stores. The company overcame COVID-19 hurdles by launching an online shopping platform based on WhatsApp, “METRO Easy Shop.” The CEO of CT Corp continued investing, seeking to capitalise on the crisis by acquiring locations of failed competitors, such as Parkson Centro department stores, which were liquidated in 2021.

Today, Metro Indonesia operates 15 stores, six of which opened between 2021 and 2022. The target is to reach 24 stores in the mid-term to gain scale. Retail represents 15% of CT Corp’s total business; within this category, Carrefour-related activities represent 95% of the revenue. The privately owned company’s total turnover remains confidential.

While it is easy to confuse Metro Indonesia with its Singapore counterpart, a similar confusion arises with the Philippines, where the Metro Retail Stores Group is entirely unrelated.

Department store competition in Indonesia includes SOGO, Seibu, and Central (all strong in houseware and cosmetics, where Metro also excels). Specialty retailers (often mistakenly considered department stores) include Matahari (which sells shoes and fashion but not home or cosmetics, achieving 35% of its turnover through private labels) and Ramanaya, which is more mass-oriented than Matahari.

Navigating Jakarta

Jakarta is a sprawling metropolis (some even say overwhelming) composed of distinct districts that reflect varied social, economic, and cultural dimensions. The city is structured around business hubs, upscale neighbourhoods, and emerging lifestyle centres. Each area attracts a particular demographic, influenced by proximity to workplaces, residential zones, and transportation links. While it is difficult to explain in a few words how the retail scene is structured, there are a few malls which are worth knowing:

• Plaza Indonesia is one of Jakarta’s most prestigious and well-established shopping centres in the heart of the city’s central business district. Adjacent to iconic landmarks and five-star hotels, it enjoys a strategic spot at the famous Bundaran HI (Hotel Indonesia Roundabout), an area long regarded as a symbol of Jakarta’s sophistication and modern development. This prime location draws a clientele of high-ranking executives, visiting diplomats, expatriates, and affluent local professionals looking for luxury designer boutiques, premium jewellery stores, and exclusive fashion houses. Metro does not operate any department store in this mall.
• Plaza Senayan, which is not far from Plaza Indonesia. Catering to a similar executive-oriented and cosmopolitan crowd, this mall features high-end fashion boutiques, gourmet restaurants, and premium lifestyle services. It attracts well-heeled professionals, expatriates, and styleconscious consumers, and overall, the mall is becoming increasingly luxurious and competitive with Plaza Indonesia. Metro operates its third-best store there, just in front of SOGO, its competitor.
• Pondok Indah Mall, located in an affluent residential district of South Jakarta, is known for its family-friendly environment. Upper-middle-class families enjoy a curated mix of international and local brands, comfortable dining options, and leisure facilities suitable for all ages. The atmosphere is relaxed. Metro operates its oldest and most successful flagship there.
• Gandaria City Mall, also in South Jakarta, occupies a middle ground. It caters to the upper class but isn't considered luxurious due to its location. It combines contemporary retail outlets with entertainment, dining, and community events, appealing to young professionals, trendsetters, and urban families seeking diverse leisure options.

Visiting Plaza Senayan

Located a mere 8 km away from Plaza Indonesia, the most exclusive mall in the country (catering to the country’s ‘old money’), Plaza Senayan is the second most luxurious mall in the country. It tends to eat market shares by attracting new brands (Kering Group labels) and a younger clientele. It comprises two department store anchors, SOGO on five floors and Metro on two floors (which used to have four floors, but the store size was reduced in 2019 to 7,900 sqm), which makes it harder for Metro to compete on variety and depth of offer. Finally, a direct connection to the Fairmont Hotel guarantees retailers access to the affluent tourists visiting Jakarta.

Due to the store size and the fact that clients went to SOGO during the closure for the renovation period, the business for Metro is complex, which explains that this store is only third in terms of performance in the whole chain, despite its high-end positioning and location. Metro focuses on ladies' designers in a highly positioned store environment to differentiate from SOGO.

The store is organised on two floors, with the ground floor dedicated to women’s fashion and cosmetics (a category where SOGO is highly competitive, even though Metro is the national leader in cosmetics) and the first floor to men’s, lingerie, and home. The kid’s category has been sacrificed due to a lack of space.

Interestingly, a rather large section of the store is dedicated to Indonesian designers, including items with a high price tag, to position the store and make the most of the international clientele. The store layout and concept are also striking, with brass-plated hangers and decor and carpets with a bold motif. Consequently, the feeling is mixed, as it evokes a slightly old-fashioned luxury store, with a profusion of glitzy elements sometimes stealing the eyes from the products. This starkly contrasts with the SOGO store, which is more aligned with current retail display trends.

The SOGO store is relatively large, with 20,000 sqm on five floors, including the ground floor dedicated to cosmetics. Their strategy includes purchasing the rights from foreign labels, such as Marks & Spencer and Sports Direct, but also Mango, Lacoste, and Ted Baker, and displaying them directly in their stores as shop-in-shops rather than free-standing stores in malls. Consequently, the feeling is rich and modern in terms of brand presence. The group that owns SOGO rights operates 17 SOGO stores, 2 Seibu stores and 1 Galeries Lafayette (in the Pacific Place mall) in Indonesia. This explains why Metro is currently in a frenzy of store openings, to compete in terms of store fleet size and, therefore, to strike more deals with brands.

Visiting Gandaria City

The Gandaria City Mall is located in an affluent zone of Jakarta, albeit less rich than Plaza Indonesia’s surroundings. As a consequence, the mall tries to differentiate through a pop-up approach allowing to display new brands, experiences, and F&B (RR Chocolates, Robbin’s Café…), international labels (H&M, Mango, Uniqlo), and a strong focus on contemporary art, with pieces of art from Yayoi Kusama, for instance, coming directly from the mall owner’s private collection.

The 10,000 sqm Metro store is organised on two floors (all Metro stores have this configuration now), with women’s on the ground floor and men’s, home and kids on the first floor (home being the best category in this store, thanks to the mall location). An interesting aspect of this store is that it offers no private labels. The whole selection of brands (national and international) is presented in a 100% consignment model (Metro perceives the payment, takes the margin and gives the remainder to the brand, which contributes only to product launches, while Metro takes care of marketing).

Being 10 years old, the store is planned for refurbishment in 2025, as it looks rather “bland”, with white flooring, high ceilings, and product zones materialised by carpets, but no specific element that allows it to give a differentiated feeling, contrary to the Plaza Senayan store. However, the Gandaria City store is known for its ability to create buzz, thanks to a mall-facing pop-up zone directly connected to the store. During the visit (June 2024), a pop-up dedicated to Korean band BTS was extraordinarily successful and cleverly channelled customers of the pop-up directly to the store as the cash desks and exit were opening directly into the store.

What about omnichannel?

Metro recognised the importance of blending offline and online retail experiences quite early. While physical stores remained central to the brand’s identity—offering a tactile and social dimension—Metro began exploring e-commerce solutions in the second half of the 2010s. By the late 2010s, many of Metro’s loyal customers appreciated the convenience of browsing merchandise online before making in-store purchases, even though it was not satisfying from a business perspective.

The COVID-19 pandemic in 2020 further accelerated the need for digital presence and operational flexibility. Like all retailers, Metro had to navigate lockdowns, shifting consumer priorities, and concerns over health and safety. Consequently, it relaunched a digital sales channel through WhatsApp, which proved nimbler and productive than the previous e-commerce website, which the new management today considers a failurei.

The visit, unfortunately, did not allow enough time to check and evaluate the processes and results achieved by Metro since the launch of this new channel.

Conclusion: the rebirth of a giant

What was striking during the visit was the clear will of the owner, CT Corp, to develop and deploy new department store units to reach scale. In the department store world, such a trend is reversed to the rest of the planet, especially in the magnitude of new store projects (from 15 to 24 at a sustained pace).

It was also interesting to visit Plaza Senayan and Gandaria City stores in the sense that they are so different that it also gives a good idea of the challenges that Metro has to face: defining a business model that truly allows producing scale economies on a national basis (a focus on private labels, international designers or entry price point international brands?), a single store concept that makes sense (which is neither the case at Plaza Senayan or Gandaria City, for different reasons), and achieve a truly omnichannel business that does not only rely on a strategic dependence towards a third-party channel such as WhatsApp in a world (and a country) where geopolitics can define the available techs from one day to another (Indonesia has recently banned TikTok e-commerce new venture and has gone into a fight with Apple and its iPhone 16, for instance).

In any case, Metro is a very dynamic company in a very dynamic country, and it will be extremely interesting to see how the business grows in the future. We are convinced that such retailers in new markets, like SM in the Philippines, are also bringing a lot of innovation in how business is conducted and customers are approached.

i: This reminds the situation in Philippines, with SM being more successful with its digital channels blending sales and social media, than its e-commerce “official” website.

Credits: IADS (Selvane Mohandas du Ménil)

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Every IADS event is designed to allow the Association members to learn from each other or from inspiring leaders. In early 2025, IADS CEOs gathered to exchange with Javier Goyeneche, the founder and CEO of ECOALF, one of the first genuinely sustainable fashion brands in history. The purpose was to explore the brand's specificities, the company behind it, and what it takes to “be sustainable” in periods of uncertainty, which 2025 certainly is.

Born in Madrid, Javier Goyeneche founded Fun & Basics after graduating in 1995, specialising in contemporary fashion handbags and accessories. Within 10 years, the business grew to 350 points of sale and 70 retail stores, and he was awarded Best Young Entrepreneur of Madrid in 2005.

However, he gradually grew frustrated with the amount of waste produced by the fashion industry, so he embarked on a mission to create a concept combining design, an understanding of the fashion consumer, and the latest recycled materials. This led to the launch of ECOALF in 2013.

The company now produces a fully sustainable lifestyle collection of outerwear, swimwear, casual apparel, yoga, footwear, and accessories. Brand distribution has strategically expanded to include prestigious department stores, speciality retailers (with over 1,800 points of sale), and a worldwide roster of retail stores.

Introduction: addressing the waste problem

At the beginning of 2025, Siemens Chairman Jim Hagemann Snabe published a paper in the World Economic Forum about the disappointing state of sustainability worldwide. Reviewing 2024, he advocated for radical efforts in sustainability despite the challenging context of geopolitics, macroeconomics, and inefficiencies in the global system. The most striking aspect of his stance is that incremental change was not enough for him to address the scale of challenges ahead.

However, the harsh reality for retail businesses is that they cannot pause all activities to reinvent themselves. In addition, it is now well documented that even the most vocal customers asking for more sustainable products are not always consistent with what they buy. Combined with the challenging 2025 environment, this context can encourage retailers to consider sustainability “a long-term topic to be addressed only when the skies are bluer”.

ECOALF positions itself precisely opposite to this view. The brand DNA is all about addressing the most immediate problems by providing a solution embedded in the company's business model. In 2013, Goyeneche identified that oceans were in danger due to massive pollution. With the world population projected to grow by two billion by 2050, the strain on resources will only intensify. Every year, 500 billion plastic bags and 650,000 tonnes of abandoned fishing nets pollute the oceans. While nets pose a significant threat to marine life and ecosystems, the massive use of plastic leads to a massive pollution of the seas. Plastic debris ends up in one of the seven oceanic “plastic gyres”, which are substantial oceanic zones with an abnormal plastic density (such as the “Great Pacific Garbage Patch”). The Ellen McArthur Foundation considers that by 2050, there will be more plastic than fish in the oceans, and it is calculated that there is the equivalent of a 16-tonne truck worth of waste thrown in the oceans every minute.

The problem is that 75% of this pollution is submerged and largely invisible, making it challenging to mediatise.

In parallel, the fashion business has grown out of control, with over 140 billion pieces produced yearly and 92 million tonnes of textiles wasted annually. Goyeneche’s initial take was that he could address both problems by using ocean waste to create fashion. This is how ECOALF was founded on the premise of innovation, sustainability, and design.

An iterative R&D process, from upcycling to recycling

Back in 2009, recycled fabrics were not attractive nor suitable enough for a brand that wanted to be more than “pragmatically sustainable”. This is why ECOALF started its research to develop new fabrics over three years, until 2013, with a tiny collection. The vision was simple: “the design should be sustainable”, and “sustainability without appealing design is meaningless to customers”. As such, the brand is based on three pillars: sustainability, innovation and design.

Based on that premise, ECOALF has developed over 683 different materials since 2013, of which 80% are 100% recycled (for instance, textiles produced out of plastic bottles). But the purpose is now to go beyond upcycling and being truly circular: when other brands collect unused garments, 90% of them usually end up in landfills because they are composed of different materials that are either too expensive or impossible to separate and recycle. Consequently, such products are downcycled into fibres used in construction, which does not address the fashion recycling problem.

To achieve such a vision, the brand adopts a “fibre to fibre” design process (i.e. developing mono-material pieces that can be easily recycled), a challenge for design teams as it bans the use of specific types of components (for instance, the very popular Elastane is not recyclable). ECOALF recycles cotton, wool, cashmere, and nylon from fishing nets collected in the ocean. 70% of the collection shown at Pitti Uomo is now mono-material.

This demanding approach goes well beyond clothing, as other categories are also developed with the same vision:

• Flip-flops are made from tyres and assembled without glue nor other components,
• Coffee leftovers are collected, dried and mixed with polymers from plastic bottles to be converted in high-tech material with specific properties (odour control, UV protection, etc.),
• Cosmetics are developed in powder to limit water consumption.

As of today, 92% of the fabrics used by ECOALF are recycled (including cotton, which is now 60% recycled), and the 8% that are non-recycled come from sustainable productions (example: leather made out of pineapple leaves, as well as an Indian fruit, kapok,  used as a substitute for water-consuming cotton).

How ECOALF has adapted its business model

While the company’s purpose is noble, it also induces much competitive distortion compared to other players who might not go through the same hardships to make their collections: pioneering sustainable fashion is economically challenging. ECOALF initially invested up to 40% of its turnover in innovation.

This significant investment was necessary to develop new, sustainable fabrics and processes. ECOALF also had to fight perception challenges in its early days, where sustainable products were often associated with poor design and quality.

This is why the company had to adapt its model to make sure its business model would not only avoid losses but also be profitable. This translated into concrete actions:

• Starting in 2013, ECOALF launched its “Upcycling the Oceans” initiative. This initiative involves collaborating with nearly 6,000 fishermen across various countries, including Spain, Italy, Greece, France, Thailand, and Egypt. The project has successfully extracted over 1,700 tonnes of ocean waste, converting 68% back into the system (and being locally transformed into products). Fishermen often collect vast amounts of waste alongside fish.

• In 2023, the company invested in its regenerative agriculture project in India to grow water net-positive cotton while at the same time regenerating soils,

Regarding traceability and transparency, ECOALF became a B Corp company, meaning that the whole supply chain was re-examined, and the company had to stop collaborating with non-compliant suppliers. Goyeneche was very clear that being fully sustainable also comes with drawbacks. For instance, a seasonal collection was once 40 days late because the company only ships products via boat, not plane. This led some wholesale customers to cancel their orders. However, he was also very clear that he did not want to change his vision and strategy and preferred to lose a handful of customers who did not share his views and values.

Today, ECOALF collaborates with 1,300 multi-brand stores (mainly in Europe) and operates 11 flagship stores worldwide. Interestingly, all the retail stores have been developed with recycled materials, meaning they have net-zero emissions.

This vision, combined with a constant will to communicate and educate the public about pollution and the results of our behaviours, has generated a robust and loyal following among customers, especially the younger generation.

Sustainability is a slippery concept: it is desirable, as customers are asking for it, but going full speed into it does not guarantee success, as the same customers might object to the price distortion induced by sustainable production practices. In fact, ECOALF has found that it cannot cater to the needs of all types of customers. Some customers, who can be vocal about sustainability but buy fast fashion products at low prices, are out of reach for the brand. Despite this, special attention is given to the price point to ensure ECOALF’s products remain within the limits of the market (for instance, a T-shirt retails at 39 EUR in Europe).

Despite this fundamental difficulty, the brand is getting traction from customers and the industrial ecosystem. While material innovation was initially led only by the company, factories now co-invest with ECOALF as they believe this can lead to more efficient and virtuous output. This also translates to scale economies and increased desirability for their products. This has created a virtuous circle: ECOALF does not work with non-sustainable suppliers or resellers who do not try to achieve a similar trajectory.

ECOALF is also known as a market player that remains true to its beliefs: for instance, the brand does not participate in promotions such as Black Friday or other equivalent high-stake customer events. Goyeneche believes that standing firm in his boots builds the brand’s credibility. This is why some may wonder if such a brand might be adapted to modern retail and competitive times. But what if this is the wrong question? What if department stores changed the narrative by increasing the proportion of virtuous brands in their product offering, supporting their sustainability claims while keeping margins high? The advent of Gen Alpha, combined with changes in consumption from “conscious clients” as identified by another IADS guest speakers, Sucharita Kodali in 2023, might answer this impossible question in the coming future.

Credits: IADS (Selvane Mohandas du Ménil)

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check out the photos of INNO - Rue Neuve here

check out the photos of INNO - Ave Louise here

In November 2024, the IADS had the opportunity to visit Belgian department store chain INNO in Brussels. Founded in 1897, and having changed hands many times over the years, ‘A l’innovation’ was a founding member of the IADS in 1928.

INNO moved its headquarters earlier this year from the iconic Rue Neuve location to its newer Avenue Louise space. IADS’ last visit in 2022 (reported here), soon after CEO Armin Devender took over, set expectations for INNO’s revamping across the digital and physical verticals. Two years hence, the IADS conducted a second visit to both locations in Brussels, the original Rue Neuve and the posh Avenue Louise, to gauge the headway made by the Belgian department store.

The strategic transformation plan, which aimed to renew the store’s image and increase sales, seems to have garnered positive results. With fresh branding, physical store makeovers, and a new online marketplace, INNO has revitalised not just its storytelling but also its connection with various groups of consumers. This is visible in younger shoppers crowding the dedicated giftable sections and

INNO Rue Neuve: A lesson in leveraging giftables

Located in Brussels's original shopping street, INNO Rue Neuve stands out among its surroundings. A four-story structure with renewed branding visible from all directions, it is hard to miss. MediaMarkt operates the last floor, whose branding is equally prominent.

The ground floor has four entrances of which the main one opens into the beauty section followed by jewellery and watches. Holiday decor and showpieces are visible from the outside. There is an art installation by Dior for its holiday collection in the middle of the luxury area. The café BON is at the second entrance. Even on a Thursday afternoon, this area was busy with shoppers coming in from the cold as well as taking a break mid-shopping. The last two entrances are inconspicuous, opening into the luggage and leather goods section. This section seemed slightly haphazard with brands such as Samsonite and Eastpak placed next to Coach and Furla. There were a significant number of salespeople present however they did not approach anyone.

The expansive gifting section, including beauty and organisation products among others, had pre-prepared boxes across brands and categories. These appear to be some of the most popular products.  An interesting observation was that this is the area that seemed to pull most of the younger crowd in. The gift boxes were available in various price brackets and included trendier offers like Ariana Grande’s line of perfumes. There were also other cheaper giftables such as notebooks and vanity cases placed in proximity to this section, all of which is near the cash desk on this floor. Dedicating space to gifting on the ground floor is not common practice but undertaken by some innovative retailers. For example, in Paris, the Printemps Haussmann’s permanent gift shop ‘Le Joli Cadeau’ is also located at its ground floor entrance and is one of the most crowded areas in the store.

The basement contained homeware, kitchenware and organisation with a smaller, emptier cash desk. The first floor was dedicated to womenswear with accessories and sportswear on one end and lingerie on the other. The signage mentions sports offerings; however, it is slightly misleading as there is only Adidas and Superdry lifestyle wear. There is also a street entrance on the first floor. Probably operating under concession, local partner Beauty Bar offers nails, hairdressing and lash salon services, on the first floor with reservations and walk-in appointments (they have two other locations around town). The salesperson here was the only one who proactively approached customers.

The second floor was dedicated to menswear. Notably, it had a wide range of offerings for socks that included all prices ranges and several brands. Similar to the women’s section, they did not have many sports products and brands. The third floor was dedicated to the kids’ section including clothing and toys. This included a specific kids’ outlet section as well. The restaurant on this floor was affordable and crowded around lunch time. The client service section for loyalty and gift cards is also placed here. Finally, MediaMarkt on the last floor was one of the busiest areas. It has a variety of services of its own including click-and-collect, a waiting room and so on that is separated from the rest of INNO.

Each floor has two escalators each as well as a cash desk that differs in size, style, and affluence.  Signage on every floor seems insufficient and customers can easily get lost; there is only one index on each floor near the escalator and the overhead signage points out the exits and toilets but no categories.

Overall, INNO Rue Neuve remains a classic shopping destination. Teeming with visitors in the middle of the day, the gifting section seems to be the main driver for shoppers. While there is space for improvement regarding the signage and floor navigation, and more engaged salespeople, the refurbishment of the store in this popular area of Brussels has helped attract newer and younger groups of customers. Compared to the last IADS visit, this location has maintained its vibrancy and welcoming atmosphere following the completion of the makeover that was underway in 2022.

INNO Louise: A mismatched ambition

INNO’s location at Avenue Louise is noticeably smaller than Rue Neuve. Despite being the new focal point for the department store chain, this store looks less festive, warm and welcoming than the original. Less crowded in general, there were also fewer younger shoppers around at the time of visit, possibly driven by the generally more limited gifting section. Promotions and sales also seem to be lesser and not as heavily advertised here.

The ground floor is dedicated to beauty, skincare, and perfumery. There is also a hair salon for men. Similar to the other location, the gifting section is located here but the range of product offerings is more limited. The basement contains women’s loungewear with ample seating areas, which were not present at Rue Neuve. There were fewer salespeople here and did not proactively approach customers either.

There is also a Café BON in the Louise store, here located on the first floor; even though it is not placed at an entrance, it is almost as busy as its location at INNO Rue Neuve. The rest of the floor is dedicated to luggage, leather goods, and accessories. The brands available are mid-range to premium (Liu Jo, Lancaster) versus premium to high end (Coach, Kurt Geiger, and the like) in the other store. The second floor is designated for women’s fashion.

Men’s and kids’ fashion along with the client service was on the third floor. Putting both offerings together made this floor quite cramped and combined with the low ceiling, the atmosphere here seemed a bit outdated and uninviting. Homeware did not have a designated section and was scattered on each floor close to the escalators. Like INNO Rue Neuve, the signage on each floor felt insufficient for floor navigation.

INNO Louise was recently refurbished in 2023 but does not seem to have captured customers’ interest like the Rue Neuve location. Given that both stores have been upgraded as part of the same transformation strategy, it is a surprise then that INNO Louise cannot capture the sense of customer engagement that fills the air in Rue Neuve. Despite IADS’ last visit occurring before the store’s revamping, the general sense of dullness detailed in that exclusive prevails.

Online presence and loyalty building

INNO’s transformation strategy included rebuilding its online presence to launch a marketplace as its ‘17th department store’. It also restructured its loyalty programme to include more benefits such as birthday presents, personalised promotions, gifts, exclusive events, and unique services. This comprehensive online strategy is a step in the direction to become truly omnichannel.

It offers several online services including buy now, pay later with Klarna. However, most of these services seem to revolve around gift and loyalty cards. The dedicated gifting section online (“Noël Guide Cadeaux”, Christmas shopping guide) is also differentiated clearly on the homepage following the example in-store which provides fluidity and convenience. Including more services such as click-and-collect and personalisation could add to the already advanced online ecosystem. /nbsp]

Conclusion: A hit and a miss

The focus on providing a comprehensive gifting section complete with offers and promotions, as well as a wide array of brands in all price ranges seems to have garnered the most attention. It has served as an effective strategy to invite younger consumers in and offer products aligned with ongoing trends and various price points. It would not be surprising to see younger repeat visitors after a first experience helmed by gift giving during the holiday season. The online gifting guide completes this process given that most young customers start their decision journey online by checking out products before going to the store.

INNO’s transformation strategy seems to be a hit at Rue Neuve and a miss at Avenue Louise. This might be an unexpected development given that the new headquarters at INNO Louise highlights the importance of this location.

While the popularity of Rue Neuve as a shopping location (43,000 visitors per day on average) contributes to customer traffic, it is not the only factor paying off. A symbol of luxury shopping in Brussels, at Avenue Louise the disconnect may lie between the poshness of the area and a disappointing customer experience. INNO’s online presence seems to be leading the way forward in terms of its priorities and transformation. The combination of in-store and online evolution has allowed INNO to expand beyond its original patronage and into newer target groups. It would do well to bring its spirit of innovation to continue adapting with fresh customers and offerings.

Credits: IADS (Anchita Ranka)

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Over the past decade, the retail market has undergone a profound transformation fueled by technological innovation, evolving consumer habits, and shifting employee expectations. While many analysts predicted that the rise of e-commerce and omnichannel strategies would mean the death of brick-and-mortar stores and department stores alike, the opposite happened past the closures accelerated by the pandemic. Nowadays, physical retail tends to thrive, with a renewed demand for immersive in-store experiences (this has been recently exemplified by the many customers queuing to enter Louis Vuitton x Murakami pop-up stores in January 2025).

Beyond store concept spectacles, the true differentiation from one brand to another lies in the quality of the sales staff in delivering exceptional service, especially with the growing importance of VICs. According to [BoF](https://www.iads.org/web/iads/9628-bofs-state-of-fashion-on-luxury.php), 75% of shoppers are likely to spend more after receiving high-quality service from store personnel. This is truly important for luxury brands as top-spending luxury customers are expected to create 65 to 80% of global market growth by 2027, as mentioned by BoF. Sure, this evolution can create tremendous business opportunities for those brands. However, it also comes with significant challenges in understanding how to upgrade the customer experience and redefine the profile, role and tools of retail teams, as well as the strategies to attract and retain top-tier talent.

Customer pain points: the roadblocks to luxury shopping

With the rise of e-commerce, in-store customer experience should bring actual added value to customers to remain relevant. Otherwise, what’s the point of shopping in-store rather than online? However, some customers are vocal about pain points that could damage their relationship with brands. What’s more, these pain points are actually on the rise. According to BoF in January 2025, 36% of the customers surveyed think the in-store luxury experience has worsened, while only 21% think it has improved over the last few years. Also, it is estimated that more than 20% of missed in-store sales are related to issues with store staff, such as poor engagement or unavailability. Moreover, the in-store experience is significant to older shoppers aged 55 and above, who often need inspiration and advice and prefer shopping in-store rather than online. Even though brands chase the younger generation, these Boomer customers are the ones with deep pockets. As such, they should (and expect to) be pampered by brands and retailers. Whatever their age, customers surveyed in the BoF report cite the following issues:

• “Impersonal, non-personalised and generic services and communication,
• Inadequate attention to detail,
• Inconsistent attention given to customers, lower quality service compared to other luxury sectors, especially travel and F&B,
• Insufficient expert guidance and product knowledge,
• Unsatisfactory post-purchase and aftersales experience,
• Long queues,
• Uninspiring environments,
• Painful checkout processes.”

These pain points underscore the urge for brands to improve the in-store customer experience. At the centre of the necessary improvements lies the brand ambassador.

Brand ambassadors: solving challenges, creating connections

Sales staff act as the face of the brand and should deliver a luxury experience that aligns with the brand's ethos. Their ability to convey the brand's storytelling helps build memorable interactions and lasting relationships. With the rise of e-commerce, sales associates are supposed to provide what customers cannot find online: experience and expertise. As such, customers want enhanced sales associates: brand ambassadors CXG defines as “client advisors” in their recent report. The report perfectly defines this new breed role: “Expectations have expanded the advisor’s role far beyond traditional boundaries. Today’s luxury advisors are expected to be omnichannel experts, equally adept at engaging clients in-store, online, and through various digital platforms. They must seamlessly blend the art of personal service with the science of data-driven insights, offering tailored recommendations based on a comprehensive understanding of each client’s preferences and purchase history.”

Brand ambassadors embody the brand values and foster direct connections with customers. Unlike other luxury brands such as Hermès, Chanel masters at connecting with customers, even the least important ones. Customers cannot enter a store unless a salesperson is available. Whatever their job titles, they act as brand ambassadors, asking questions about customer needs and preferences and guiding them through the store. Once the contact is established and the customer expectation is understood, the sales staff grants customers the privilege to download the brand app. On the flip side, this practice very often generates lines.

Talented brand ambassadors master knowing and analysing customer preferences at a granular level through data-driven insights. Their role can also take them outside the store, as they can be asked to join customers in various activities. According to BoF, a truly personalised and knowledgeable approach by sales staff significantly impacts customer satisfaction.

Personalisation at the heart of the customer relationship

Brand ambassadors who take the time to understand their clients' preferences and needs significantly enhance the shopping experience and develop their sales. A personal touch fosters loyalty, translating into repeat business. Brands with empowered and well-trained ambassadors see measurable increases in average transaction value and overall sales revenue. Ambassadors who use clienteling tools and techniques consistently outperform those relying on traditional sales methods. This is why brands and retailers are heavily investing in clienteling tools. It comes with hurdles as the investment is significant, and the of-the-shelves solutions often lack customisation options to truly fit their needs, especially in complex businesses such as department stores.

Using clienteling tools, brands and retailers work with macro segments such as demographics, sales and product data, cross-brand and cross-channel shopping data, beacon data, personal shopping data, and sometimes third-party data. More than a hundred micro attributes can be defined for each unique customer to personalise relationships. For example, Kering’s clienteling app, Luce, provides store associates with personalised product recommendations based on detailed customer information, boosting the average order value by between 15 and 20%.

While clienteling tools can suggest actions to reach customers, extensive training is required to empower brand ambassadors and make the most of these tools. They should understand their lifestyles, preferences, and aspirations. Additional services help nurture relationships, such as personal styling, restaurant bookings and events. Breuninger excels in personalisation and offering more to customers. To that end, they organise special events. For example, they hire a singer, rent a venue, hire a catering company, and organise the whole event. Only top customers in the loyalty programme are informed and can access those events. After-sales follow-ups, repairs, alterations, and product maintenance are increasingly essential to maintain the relationship and show how the brand cares.

The perfect brand ambassador: skills, passion, and technology

According to Vogue Business, suitable candidates for a sales position at Louis Vuitton must be “proactive,” “develop long-term relationships with customers, using the various clienteling tools,” and “learn to master the brand.” At The Webster's luxury multi-brand store, sales reps must align with the retailer’s DNA values, including “unequivocal imagination” and “unbridled hospitality.”

These examples demonstrate brand ambassador profiles comprise a multifaceted role that combines technical, emotional, and interpersonal skills. Today’s key attributes pile up and include:

• Retail skills have tremendously changed. While they used to be focused on the ability to sell, they are now including much more. Digital ease is paramount to master clienteling tools, CRM systems and social media platforms. This also comes with the ability to switch seamlessly between in-store and online customer interactions. Cultural awareness has gained importance in dealing with a diverse global clientele. At a time when luxury brand product quality and price are challenged, storytelling abilities to narrate product and brand heritage are critical.
• While already important in the past, soft skills’ importance is growing. Active listening, patience, discretion and resilience are still on the menu. However, as mentioned in the IADS 2024 White Paper about middle management, emotional intelligence and empathy (among others) have become a staple to understanding non-verbal hints, adapting communication styles and managing personal emotions. In that area, some retailers train sales staff to master “small talk”. It includes complimenting customers on their looks, as is frequently the case in the US. It tends to become a common practice even in countries such as France, but this kind of behaviour doesn’t translate well into all cultures.
• Brands also expect a perfect cultural fit, as ambassadors should be aligned with the brand’s values and culture. As such, passion for the brand's heritage and products is a given.

Training on product knowledge and brand heritage has always been key to the sales staff’s success. However, technology-related training is now necessary to empower client advisors using clienteling tools and CRM systems. Furthermore, they should be at ease with AI-driven tools for customer insights. AI might also help automate administrative tasks to give ambassadors more time for customer-centric tasks. Providing continuous training and development in technical skills and leadership capabilities ensures retail teams can adapt to rapidly evolving technologies and shifting consumer expectations.

Strategies to luring the best people

There are well-known ways to attract and secure top-tier talent. For example, participating in job fairs and partnering with luxury fashion schools are common standard practices. Brands and retailers extend their leads to F&B and hospitality these days, as those sectors are recognised for highly skilled individuals. Recruiting from other non-traditional industries can work, too: automotive, real estate and financial sectors are currently considered. Finally, hiring from mass-market retailers can be valuable for brands to engage with younger Gen Z clients better.

Other nontraditional ways to attract postgraduate candidates exist. Besides offering internships, the CXG report suggests that brands host guest lectures or workshops to introduce students to the brand. Sponsoring scholarships or competitions to identify top talent early on also provides interesting results.

Brands usually run social media recruitment campaigns on LinkedIn, but they should extend them to Instagram, TikTok, and even Facebook for targeted recruitment. Sharing engaging content that highlights the brand’s culture and featuring employee testimonials are successful practices. Hosting live Q&A sessions for potential applicants can complete a comprehensive social media strategy. Using influence should not be limited to social media campaigns, as influence can become a recruitment asset. Collaborating with fashion and lifestyle influencers to promote career opportunities should be considered to reach younger audiences. Also, brands can showcase successful client advisors as micro-influencers: it can help get a younger audience and act as a reward mechanism. Also, sponsoring influencer-led workshops or masterclasses on luxury retail careers is to be considered.

Finally, companies usually encourage employees to refer potential candidates. They are usually offered financial rewards such as bonuses and gift vouchers for successful referrals. Still, non-monetary rewards, such as extra vacation days or invitations to special events, work. Also, training store managers to develop an eye for identifying and selecting suitable talent is an integral part of this strategy.

By combining traditional recruitment methods with innovative and targeted strategies, luxury brands aim to attract candidates who align with their evolving requirements and maintain a strong talent pipeline. Luxury brands such as The Ritz-Carlton also emphasise the importance of "observable skills" over "declared skills" and focus on hiring individuals who spontaneously demonstrate charisma, empathy, adaptability and passion.

Keeping the bests: how employee engagement drives retention

The growing demand for digital expertise among sales staff is a standout shift in the luxury retail landscape. With brands embracing omnichannel strategies, ambassadors are now expected to master sophisticated clienteling apps and connect with customers via social media. Luxury brands are now competing within retail and against tech companies and startups, which often lure candidates with more attractive salaries and benefits.

In response, some brands have boosted base salaries and revamped commission structures to stay competitive. From that perspective, incentives should reward the sales staff's impact on the customer's lifetime value and not only the sales volume. Recognition programmes with structured systems to reward performance, whether through bonuses, public recognition, or career advancement opportunities, and feedback mechanisms with established channels for regular feedback allow advisors to share concerns and ideas and to develop a strong sense of empowerment. Ambassadors’ success hinges significantly on their engagement and satisfaction in the workplace. Engaged employees are more motivated, perform better, and contribute to a positive workplace culture, directly impacting customer experience and employee retention. The CXG report underscores that high turnover rates in retail often stem from a lack of growth opportunities and inadequate recognition. Engaged ambassadors are 2.5 times more likely to stay with their organisation. Finally, brands should foster a culture of accountability and excellence by setting clear performance expectations and celebrating achievements. From that perspective, BoF mentioned Reiss partnered with AI-powered learning platform Thrive to boost employee development by enhancing onboarding, celebrating internal accomplishments and creating a collaborative learning environment.

The role of the brand ambassador has evolved into a linchpin for success in luxury retail. These enhanced sales associates are no longer just facilitators of transactions but relationship builders and caretakers of the brand's identity, storytellers. As physical retail regains momentum, the human touch provided by these ambassadors becomes an irreplaceable competitive advantage.

Brands must rise to the challenge by investing in robust training, advanced clienteling tools, and strategies to attract and retain top talent. Personalisation, expertise, and emotional intelligence are no longer optional—they are imperatives. Moreover, fostering a workplace culture that prioritises engagement, recognition, and growth opportunities is essential to maintaining a high-performing team.

Credits: IADS (Christine Montard)

What: North American packaging industry faces unprecedented transformation as five megatrends reshape material choices and supply chains.

Why it is important: The convergence of geopolitical pressures and sustainability demands is forcing packaging companies to fundamentally rethink their strategies, impacting the entire retail supply chain.

The North American packaging industry's transformation is fundamentally reshaping retail operations and consumer experiences. As retailers grapple with evolving consumer preferences and e-commerce growth, packaging choices have become critical to brand differentiation and customer satisfaction. Five key megatrends are driving this change: geopolitical developments affecting trade, increasing demand for convenience, e-commerce expansion, growing health consciousness, and sustainability requirements. Through extensive analysis of retail categories and packaging types, paper and flexible plastic emerge as leading substrates, offering retailers the optimal balance of cost, functionality, and environmental credentials. For retailers, this shift demands new approaches to inventory management, store operations, and customer experience design. The transformation extends beyond mere packaging choices to impact pricing strategies, supply chain resilience, and sustainability initiatives, requiring retailers to balance immediate cost pressures with long-term strategic positioning in an increasingly competitive market.

IADS Notes: Recent market data reveals the profound impact on retail operations. In March 2025, 62% of consumers expressed concern about rising retail prices due to trade policies , while BCG's January 2025 analysis projects USD 640 billion in additional import costs . Despite these challenges, retailers are maintaining their commitment to sustainability, with February 2025 data showing 47% of companies incorporating environmental features in new product launches . This aligns with shifting consumer expectations, as 80% of Americans now consider sustainability achievable within two decades , forcing retailers to balance cost management with environmental responsibility.

Flexible by design: the new playbook for packaging in North America

What: BCG's Global Asset Management Report 2025 outlines four key transformation areas: strategic reinvention, product evolution, market consolidation, and cost optimisation.

Why it is important: These strategic pillars offer a comprehensive framework for retailers navigating similar challenges in digital transformation, operational efficiency, and market consolidation.

BCG's Global Asset Management Report 2025 presents four crucial chapters that mirror retail industry challenges and opportunities. "From Recovery to Reinvention" establishes the foundation for transformative change, moving beyond simple recovery to fundamental business model reinvention. "Rethinking Products and Distribution" examines the evolution of offerings and delivery channels, particularly relevant as retailers navigate omnichannel transformation. "Staying Relevant in a Consolidating Market" provides a strategic framework for evaluating partnerships and acquisitions, while "Becoming Radically Leaner" outlines three distinct operational models and efficiency levers. Together, these chapters demonstrate how industries can successfully transform their operations while maintaining customer relationships, optimising costs, and building technological capabilities - all critical challenges facing today's retail sector.

IADS Notes: The four chapters of BCG's report align with major retail industry developments since late 2024. The industry's move from recovery to reinvention parallels retail's digital transformation journey, while the focus on product and distribution evolution reflects the ongoing shift toward omnichannel experiences. The emphasis on market consolidation and cost optimisation resonates with retail's current focus on operational efficiency and strategic partnerships, particularly as both industries navigate technological disruption and changing consumer preferences.

Global Asset Management 2025 - From recovery to reinvention, Press Release

BCG report: Global Asset Management 2025 

From Recovery to Reinvention

Rethinking Products and Distribution

Staying Relevant in a Consolidating Market

Becoming Radically Leaner

What: Retailers must adapt their physical spaces and services to accommodate an aging urban population that will reach 2.1 billion by 2050.

Why it is important: Making cities age-friendly through retail adaptation will reduce healthcare costs and create economic opportunities through increased senior citizen spending and mobility.

The intersection of urbanisation and aging populations presents a critical challenge for cities worldwide, with the population of people aged 60 and over projected to double to 2.1 billion by 2050. According to BCG's research, approximately 1.5 billion of these individuals will reside in urban areas, necessitating significant adaptations in retail environments. The World Health Organization emphasises that physical and social environments directly impact older people's health, highlighting the need for accessible buildings and walkable spaces. This transformation requires retailers to reimagine their spaces and services, from implementing safety features to redesigning customer experiences. The economic benefits are twofold: reduced healthcare costs through better mobility and increased revenue from economically independent seniors who may choose to relocate to cities with superior facilities.

IADS Notes: Recent retail developments demonstrate the growing importance of age-friendly adaptations. In February 2025, studies showed that retailers implementing specific changes, such as lower bed heights in hotel rooms and non-slip flooring, saw increased patronage from senior citizens. By October 2024, retailers transforming into "third spaces" reported significant success in fostering community connections among older customers. These adaptations align with BCG's findings that cities offering retirement visas and age-appropriate infrastructure are seeing economic benefits from attracting and retaining retired population.

Urban populations are ageing. How can cities adapt?

What: BCG's leadership development framework reveals how systematic practice and belief reframing drive successful retail transformation.

Why it is important: With 51% of retail employees considering leaving their positions, the need for effective leadership development has never been more critical for industry survival and growth BCG's analysis of leadership development provides crucial insights for the retail industry's pressing talent retention challenges.

The research demonstrates that successful transformation requires leaders to move beyond traditional training approaches to embrace systematic, daily practice of new behaviors. This methodology proves particularly relevant as retailers face unprecedented workforce challenges, with more than half of employees considering career changes. The framework's emphasis on reframing beliefs and hardwiring new behaviors offers a practical solution for retail leaders struggling to maintain team engagement while driving digital transformation. By focusing on continuous development rather than sporadic training sessions, retailers can build the leadership capabilities needed to retain talent and drive innovation. The approach combines strategic foresight with emotional intelligence, enabling leaders to create environments where both traditional retail expertise and digital innovation can flourish, ultimately fostering stronger employee engagement and operational excellence.

IADS Notes: Recent retail transformations validate BCG's leadership development principles. In March 2025, retailers implementing systematic transformation achieved 21% higher returns, while December 2024 saw Neiman Marcus's "Magic Makers" program achieve a remarkable 34-point increase in employee engagement. The Mall Group's success at the Future Trends Awards in March 2025 demonstrates how balanced leadership development can drive both technological advancement and organizational excellence. Meanwhile, Macy's "First 50" initiative and Breuninger's achievement of 50% online sales in October 2024 showcase how systematic leadership development can successfully bridge traditional retail expertise with digital innovation, creating environments where employees thrive.

The secret to building great leaders

What: Social health emerges as the missing link between retail spaces and customer well-being, driving mall transformation.

Why it is important: As loneliness becomes a global health concern, retail spaces have a unique opportunity to foster community connections while driving business growth, as evidenced by recent mall traffic increases and successful community-focused initiatives.

Against the backdrop of Netflix's disturbing series 'Adolescence', which highlights the lethal consequences of social isolation through the story of a troubled British teenager, social scientist Kasley Killam's research at SXSW gains particular relevance. Her work demonstrates that a sense of belonging brings concrete health benefits, extending beyond close relationships to include casual interactions in retail environments. This shift coincides with the evolution of retail brands, which have moved from product-centric approaches to creating meaningful communities around shared values. Notable examples include Harley Davidson's HOG community and LEGO's AFOLs, demonstrating successful integration of community building into retail strategy. Shopping malls are particularly well-positioned to foster these connections, with their true vocation evolving from mere retail spaces to hosts of meaningful social interactions. The challenge now lies in intentionally organizing communities and fostering interactions both inside and outside stores, transforming marketing into an art of promoting visitors' social health through human-to-human connections.

IADS Notes:The article's vision of retail spaces as social health hubs is already becoming reality. Major brands like Coach demonstrated this in March 2025 with their social space concepts, while mall traffic data from December shows a 6.4% increase in centers prioritizing community engagement. The transformation is particularly resonating with Gen Z, with research from October showing 60% visit malls primarily for socialisation. Asian mall operators are leading this evolution, achieving 120% sales increases through cultural integration initiatives in January. This aligns with the industry's recent $1.3 billion investment in community-centric mall redevelopments, confirming retail's shift toward fostering social connections.

Netflix's 'Adolescence' and the rise of social health in retail

What: AI adoption in retail requires a balanced approach between technology implementation and employee engagement, with CEO leadership as the critical success factor.

Why it is important: As AI reshapes retail operations, companies that successfully combine technological innovation with employee engagement are seeing significant competitive advantages, including 15-30% improvements in operational efficiency.

The retail industry stands at a critical juncture in AI adoption, where success depends more on cultural transformation than technological implementation. While one in three companies are investing at least $25 million in AI, deep pockets alone don't guarantee success. The key to effective AI adoption lies in CEO leadership and employee engagement, with successful companies focusing on cocreation and practical applications rather than technology for its own sake. Research shows that companies combining organizational learning with AI implementation are 1.6 to 2.2 times more likely to manage uncertainties effectively. However, significant challenges remain, with only 10% of retailers successfully scaling their AI applications despite widespread investment. The transformation requires a delicate balance between automation and human expertise, with successful companies achieving productivity gains while maintaining employee engagement and job satisfaction.

IADS Notes: Recent retail developments strongly validate the importance of strategic AI implementation. In March 2025, data revealed that retailers achieving successful AI adoption saw annual productivity growth of 4.5%, significantly outperforming the industry average. This was exemplified by Intime Department Store's 15% boost in counter sales through AI implementation in July 2024. However, challenges persist, as highlighted by January 2025 findings showing that while 70% of retailers plan to implement AI, only 10% successfully scale their applications. IKEA's comprehensive AI literacy program, launched in April 2024, demonstrates the importance of employee training and engagement, having successfully trained 3,000 workers and 500 leaders across the company.

When companies struggle to adopt AI, CEOs must step up

What: Brands must transform their influencer marketing approach from broad-reach campaigns to data-driven precision targeting of specific consumer communities to achieve measurable ROI.

Why it is important: As retail media becomes the primary marketing channel for 92% of brands, this transformation provides a structured framework for achieving measurable results in an increasingly crowded influencer landscape, addressing the industry's pressing need for standardised measurement and improved ROI.

The retail industry is witnessing a fundamental shift in influencer marketing strategy, moving from traditional broad-reach campaigns to precision-targeted approaches. This transformation is driven by the need for more effective consumer engagement and measurable outcomes in an increasingly saturated market. Research shows that well-executed precision influencer campaigns are six times more efficient at reaching target shoppers than conventional methods, potentially boosting sales by 20% within the first month. The success of this approach requires a comprehensive transformation across multiple dimensions, including talent development, technology integration, and operating model optimization. Companies must strike a delicate balance between enabling local, grassroots marketing initiatives whilst maintaining centralized support and expertise. The transformation journey encompasses five key capabilities: consumer analytics, influencer management, story and creative development, strategic planning, and performance measurement. This evolution demands a structured implementation approach, beginning with foundation-laying and progressing through testing and refinement phases. Organizations that successfully navigate this transformation can create deeper connections with specific consumer tribes while achieving measurable business impact at scale.

IADS Notes: Recent market data strongly validates the article's emphasis on precision influencer marketing. In February 2025, research revealed that 92% of brands now consider retail media their primary marketing channel, though 62% struggle with measurement standards - directly supporting the article's call for more precise ROI tracking. The potential for transformation is significant, as evidenced by November 2024 findings showing that personalized approaches could generate $570 billion in incremental gains for industry leaders. This aligns perfectly with the article's reported six-fold efficiency improvement in precision campaigns. The strategy's importance is further underscored by February 2025 projections of Gen Z's future spending power reaching USD 13 trillion by 2030, with 23% of their current purchases influenced by viral social content. The effectiveness of precision targeting is demonstrated by July 2024 data showing that 57% of TikTok Shop transactions came from new customers, validating the article's emphasis on emotional connection and community-focused marketing approaches.

In influencer marketing, precision drives growth

What: Consumer sentiment analysis reveals growing anxiety about tariffs and economic uncertainty, particularly affecting lower-income household spending patterns.

Selected Why: The findings signal potential shifts in retail spending patterns that could reshape market strategies, as evidenced by recent NRF forecasts projecting slower 2025 retail growth of 2.7-3.7%.

The latest consumer sentiment analysis reveals a complex landscape where spending intentions remain positive despite emerging cracks in consumer confidence. The survey, conducted in February 2025, highlights significant regional variations, with Chinese and Indian consumers displaying marked optimism about their economic futures, while US consumers show sharp declines in confidence about their personal finances. European and Japanese consumers express pessimism about their five-year economic outlook, though their short-term financial sentiment varies by country. Despite mixed feelings about personal finances, consumers generally indicate continued spending intentions, partly driven by anticipated inflation and discretionary motivations. However, concerning trends emerge among lower-income households, who plan to reduce spending, marking a shift from previous patterns. The impact of tariffs adds another layer of complexity, with most consumers believing these will worsen inflation and harm their economies, though Chinese and Indian consumers see potential long-term benefits for their countries.

IADS Notes: Recent market analyses provide crucial context for these findings. As noted in March 2025, consumer confidence hit a three-year low, with inflation expectations surging to 6.0%. This aligns with January 2025 data showing global economic growth projections of 2.8%, reflecting the complex balance between continued spending and growing consumer caution. The divergence between emerging and developed markets is particularly significant, with April 2025 data showing strong growth in Indian retail expansion while European markets maintain a more cautious stance. These trends suggest a fundamental shift in global retail dynamics, requiring retailers to adapt their strategies to increasingly polarized consumer behaviors and regional variations.

Even before the tariffs, cracks were appearing in consumer confidence

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What: Nordstrom partners with SkinSpirit to introduce medical-grade aesthetic services in its retail spaces, marking a strategic evolution in luxury beauty retail.

Why it is important: The integration of medical-grade services into traditional retail spaces represents a strategic response to market pressures, as department stores seek new ways to differentiate themselves and drive customer engagement.

Nordstrom's groundbreaking partnership with SkinSpirit marks a significant transformation in luxury beauty retail, introducing premium medical aesthetic services directly into the department store environment. The collaboration, launching at Nordstrom's New York City flagship on 57th and Broadway, brings sophisticated treatments including BOTOX® Cosmetic, dermal fillers, and DiamondGlow® facials into the traditional retail setting. This strategic move responds to evolving consumer preferences that increasingly blend cosmetics with medical aesthetics and wellness services. SkinSpirit's approach emphasizes education and expertise, with 32 national trainers ensuring service excellence. The measured expansion strategy, beginning with the NYC location and planned extension to Chicago's Oakbrook Center, demonstrates a careful approach to implementation. This partnership represents more than a simple retail collaboration; it signals a fundamental shift in luxury retail strategy, where experience and specialized services become essential differentiators in the competitive beauty market.

IADS Notes: This transformation aligns with broader industry developments observed over the past year. In January 2025, Nordstrom's move toward privatisation provided the flexibility to pursue such innovative partnerships. The strategy builds upon the company's successful beauty initiatives, including the revamp of beauty counters with interactive elements in November 2024 and the launch of specialized beauty kiosks targeting younger demographics. The appointment of Catherine Bloom as Director of Luxury Styling in February 2025 further demonstrates Nordstrom's commitment to elevating customer experience through expert services and partnerships.

Why Nordstrom is pivoting to beauty and skincare?

What: Advanced AI systems are emerging as powerful tools in international negotiations, combining historical peace agreement data, expert insights, and leader-specific behavioural models to help diplomats navigate complex diplomatic scenarios.

Why it is important: As global conflicts and trade tensions multiply, AI's ability to process vast amounts of historical data and simulate multiple scenarios offers negotiators unprecedented support in maintaining momentum and assessing potential outcomes.

In an era of increasing global tensions, AI models are being developed to assist diplomatic negotiations. The Strategic Headwinds project, one of the most advanced initiatives, aims to support Western diplomats in Ukraine talks. The system combines diverse data sources, including a database of 374 peace agreements, expert gameplay data, and specialist insights on negotiation trade-offs. The resulting Ukraine-Russia Peace Agreement Simulator evaluates potential outcomes across four key areas: territory, security, justice, and economics. The project also features AI "advisers" modeled after historical leaders, offering unique perspectives on scenarios. While such models show promise, testing reveals varying tendencies among different AI systems, with some showing more "escalatory" behavior than others. As these tools evolve, they could fundamentally change how diplomatic negotiations are conducted, though questions remain about maintaining human oversight in the process.

IADS Notes: The development of AI negotiation models reflects broader trends in artificial intelligence adoption across industries. As reported in March 2025, AI-enabled teams are demonstrating remarkable efficiency gains, with studies showing individuals using AI matching the performance of traditional two-person teams while reducing work time by 12-16%. This aligns with the article's emphasis on AI's potential to enhance negotiation capabilities. However, implementation challenges persist, as December 2024 data shows only 20% of executives feel their organisations are prepared to address AI skills needs, while just 25% feel equipped to handle AI governance and risks. The varying approaches to risk among different AI models, noted in the article, mirror findings from April 2024 showing how different implementations can lead to significantly different outcomes. Google's January 2025 formation of a specialised team for real-world simulations demonstrates the industry's commitment to advancing AI capabilities in complex decision-making environments.

AI models could help negotiators secure peace deals

What: Pay equity laws and requirements remain firmly in place despite federal DEI policy changes, requiring retailers to maintain fair compensation practices regardless of broader diversity initiative modifications.

Why it is important: The distinction between unchanging pay equity laws and evolving DEI policies creates a critical compliance challenge for retailers, who must balance legal requirements with shifting political pressures while maintaining effective workplace practices.

As retailers navigate the changing landscape of diversity initiatives, pay equity emerges as a distinct challenge that transcends political shifts in DEI policies. The data reveals persistent disparities, with women earning 83 cents per dollar compared to men in uncontrolled scenarios, dropping to 73 cents for working mothers. While companies like M&S and Costco respond with record investments in retail pay, the industry grapples with broader structural challenges, particularly in accommodating caregiving responsibilities. The Equal Pay Act and Title VII protections remain unchanged, requiring continued vigilance in pay equity regardless of DEI policy modifications. This legal framework, combined with state-level legislation in over 40 states, creates a complex compliance landscape that retailers must navigate while addressing both direct pay discrimination and systemic opportunity gaps. The situation is further complicated by the potential legal risks of dismantling DEI programmes that previously helped identify and address pay disparities, suggesting the need for careful consideration in how retailers approach workplace equity reforms.

IADS Notes: The retail industry's approach to pay equity has evolved significantly since late 2024, as evidenced by contrasting strategies in addressing compensation and workplace equity. In March 2025, M&S's record £95 million investment in retail pay demonstrated one approach to addressing disparities, while Costco's January 2025 move to raise hourly wages above $30 showed another. The emergence of the FAIR framework has offered retailers a new path forward, focusing on systemic changes rather than individual interventions. Recent data from March 2025 showing only half of major retailers meeting the 40% women in leadership target, combined with a 51% industry turnover rate, highlights the ongoing challenges. These developments occur against the backdrop of women controlling 75% of global discretionary spending, emphasising the business imperative of addressing workplace equity beyond mere compliance.

Amid DEI uncertainty, what happens to pay equity?