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

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

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

  IADS Global Retail Risk Index: A quick overview   

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

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

Findings

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

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

Secure markets: from North America to Western Europe

North America: still the strongest

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

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

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

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

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

East Asia and the Pacific: rebounding strong

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

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

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

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

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

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

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

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

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

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

Cautious promise: Latin America and South Asia

Latin America and the Caribbean: smack-dab middle

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

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

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

South Asia: dense markets and diverse challenges

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

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

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

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

Eastern Europe and Central Asia: adapting amid geopolitical shocks

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

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

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

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

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

Sub-Saharan Africa: high promise amid structural barriers

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

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

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

Conclusion: resilience through data

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

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

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

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

Credits: IADS (Anchita Ranka)

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

The Etam lingerie empire: from product innovation to omnichannel revolution

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

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

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

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

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

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

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

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

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

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

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

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

Inventory optimisation and connected fitting rooms

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

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

Technology adoption and change management

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

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

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

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

Credits: IADS (Christine Montard)

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The integration of sustainable practices is no longer an option for retailers across the planet, due to impending national and international regulations, combined with consumers’ growing preference to buy sustainable products and engage with responsible brands. However, if the intention is the same, the execution might significantly differ from one continent to another.It starts with the way national companies handle global guidelines. For instance, the 17 UN Sustainable Development Goals (SDGs) provide a framework for sustainability priorities, but retailers in each country prioritise different SDGs according to their national strategies and culture. For example, Chinese enterprises have focused on “Good Health and Well-being” (SDG 3), “Quality Education” (SDG 4), “Responsible Consumption and Production” (SDG 12), and “Decent Work and Economic Growth” (SDG 8)i . In the meantime, in the US, the private sector has an increased focus on “Clean Energy” (SDG 7) and “Industry, Innovation and Infrastructure” (SDG 9)ii . This difference in sustainability priorities must be reflected in the undertakings of the retail sector attempting to engage and expand in new markets.

Even within regional blocs, differences arise. One of the key takeaways of Bain & Company’s report on sustainability for Asia-Pacific consumers is that fast-growth markets such as India, China, Indonesia and Vietnam care more about sustainability than mature markets like Japan, South Korea and Singapore. A possible explanation cited is that witnessing first-hand the impact of environmental issues in emerging markets makes these threats real and tangible. The average pollution in fast-growing markets is two and a half times that of mature markets, with the highest levels being in India and China.Today, we are seeing an increasing number of retailers and department stores commence or enhance their operations in growing markets such as India and China. India saw the entrance of 27 international retail brands in 2024, including Saks Fifth Avenue, which announced its interest for the market a few years after Galeries Lafayette announced they would open a store in 2026. In China, despite a luxury slowdown, retailers such as Metro AG and the retail conglomerate SM Investments have expanded their Chinese footprint in Tier 1 and Tier 2 cities. Across both countries, the majority of the population is concerned about the environment. But do consumers in these emerging markets have the same definition of sustainability as the West? And to what extent does the notion of sustainability differ from a consumer and retailer’s perspective, in each country, compared to the West?

Consumer sentiment on sustainability in the West: The responsibility lies on brands

According to the European Commission’s Eurobarometer, 78% of Europeans agreed that environmental issues directly affect their daily life and health and over 80% agreed that EU legislation is needed to protect the environment in their countries.

This reflects the fact that, in the West, the onus of creating and maintaining sustainable practices is divided more evenly between the government and the private sector. For 92% of Europeans, companies should pay for the costs of cleaning up their pollution, while 74% agree that public authorities should pay for the costsiii.

Almost 60% of European respondents demonstrated a willingness to pay more for sustainable products that are easier to repair, recyclable and/or produced in an environmentally sustainable way. However, these results differ over research reports with BCG’s 2024 European Consumer Sentiment Report finding that while Europeans consider sustainability while they shop, only 20% declare that they would pay more for green products. Repair has become one of the newer features of sustainability in the West where 77% of European citizens would rather fix a product than substitute it, as of a 2022 survey by the EU. This sentiment has been capitalised on by retailers such as Decathlon, providing bike repair services in-store and online support for customers to self-repair products, as well as Uniqlo’s Repair Studio for repairing and upcycling products.

In the US, 78% of consumers say a sustainable lifestyle is important. Products making ESG-related claims averaged 28% cumulative growth over the past five-year period, versus 20% for products that made no such claimsiv . According to EY’s US Future Consumer Index, sustainable products command a 39% price premium compared with conventional products. Research by OnePoll also showed that 55% of Americans would cease using a brand upon discovering its lack of commitment to environmental sustainability. 42% of respondents said they can tell when a company is trying to greenwash their activities.

Overall, in the US and Europe, sustainability is an important issue to consumers. However, they place the responsibility for sustainable production and consumption more on the private sector than on the government. This may be a feature of already having advanced regulatory standards, especially in the EU. Despite this, consumers in Western countries are only willing to pay between 8 and 10% extra for sustainable products which is lesser than consumers in India and China. The sustainability say-do gap, which reflects the difference between expressed intention and action, looms large in Western countries.

Consumer sentiment in India: Sustainability as an efficiency operation

In India, as in many other developing countries, sustainable actions take the form of operational efficiency. An ingrained reflex for most Indians, reusing, recycling, and repair are foremost cost and effort savers, which now also translate into conscious consumption of sustainable goods. As a saving economy, Indians are prone to avoiding the wastage of goods and services, including money and food. Indian consumers are also cautious regarding greenwashing and paying premiums for sustainable products.

Several sources make it clear that sustainability is an important issue for Indians. 92% of Indians are concerned for the environment, while 66% feel it is at riskv . Two in three urban Indian consumers prioritised environmentally responsible actions taken by businessesvi . Indians also have a dual focus on wellness and sustainability, with 33% stating that they opt for natural products for health benefitsvii . Finally, according to PwC India’s Voice of the Consumer Survey, 46% of Indian consumers view climate change as a significant threat, driving 60% of them to change their behaviour and move toward sustainable products. They are even willing to pay a premium of 13.1% (vs price base lines) for sustainably sourced goods.

However, only 30% of Indians perceive sustainability as the responsibility of private companies with the majority believing it is the government’s responsibility to address sustainability issuesviii .  Despite re-use and repair as engrained practices, there is a sustainability say-do gap in India, which is explained by high prices and limited product information and availability. As a collectivist society with a recently booming economy, Indians tend to place their expectations for responsible actions on the community and institutions. Brands and corporations taking the lead on sustainability can hence build brand value and equity by engaging with the community. Though facing the right direction, the average Indian can be better nudged to invest in sustainable initiatives. A growing number of consumers, especially younger generations, are more conscious about their consumption and which brands they engage with.

The repair culture in India is very developed resulting from a combination of high price sensitivity and low labour cost to repair products. Technicians are available for a low cost to repair almost every product ranging from apparel and shoes to washing machines and microwaves. For example, Decathlon’s bike repair initiative will not make as many gains in India as it does in France due to the existence of cheap and convenient bike repair shops. While Decathlon does run this initiative in India, it has been outsourced to a third-party provider that runs digital workshops with little advertising. Given that most retailers such as Decathlon exclusively repair purchases made in their store or of their brand (i.e. Decathlon repairs only Decathlon brand bikes or other bikes bought at a Decathlon store), it prompts questions on the relevance and perception of such initiatives for Indian consumers with access to cheaper, more convenient, and non-exclusive alternatives.

On the other hand, enhancing value as part of a repair or recycling scheme can resonate with customers who prioritise value. For example, Yves Saint Laurent’s repair services for perfume bottles and refills that can be attached to existing containers can be framed as a value-added service that is also sustainable especially for luxury products. Retailers aiming to enter emerging markets will do well to understand the nuance of repair, where an approach like that in the West could lead to public backlash and accusations of greenwashing.

Consumer sentiment on sustainability in China: Not at the cost of convenience

The government drives the sustainable transition in China; consumers and the private sector are involved but not to comparable levels in the West. Most consumers prefer convenience over sustainability and are still in “consumption catch-up mode”. Large Chinese conglomerates are increasingly publishing ESG reports and pushing sustainability initiatives to keep pace with their Western counterparts.

A feature of sustainability in China is that it revolves mainly around environmental concerns and does not include social issues and human rights concerns as much as in the West. PwC’s June 2022 are willing to switch to brands that emphasise sustainability and corporate responsibility. As an emerging economy focused on savings, China also has a strong availability of low-cost labour for repair. This has also been characterised by a developed used goods market where all kinds of used products are refurbished and prepared to be resold. For example,

Centergate Como in Zhongguancun, Beijing’s IT neighbourhood, is a gigantic six floor shopping mall filled with small electronics shops selling all kinds of used gadgets.

UNDP’s Survey Report on Business and Sustainability in China found that while 89% of Chinese companies surveyed know the SDGs, 42% do not yet know how to measure their contributions towards them. Chinese enterprises have also prioritised SDGs concentrating on health and well-being, education, responsible production and consumption and decent work and economic growth. Enterprises are undertaking sustainable development projects based on their branding and image-building needs. Chinese enterprises have also prioritised SDGs concentrating on health and well-being, education, responsible production and consumption and decent work and economic growth. Enterprises are undertaking sustainable development projects based on their needs of branding and image-building.

According to Ipsos, air pollution was the leading environmental concern for Chinese consumers with 45%. Many families visit play areas in shopping malls because it is deemed safer than playing outdoors. The Credit Suisse Research Institute also reported that more than 50% of Chinese consumers were distrustful of corporate sustainability claims: greenwashing is obvious to most consumers. As a result, luxury groups are more likely to foster higher engagement if there is a greater focus on local green issues. For example, Prada hosted a Re-Nylon pop-up store to engage shoppers at SKP-S in Beijing in late 2020.

While data on the sustainability say-do gap in China is minimal, research shows that consumers are willing to pay greater premiums for sustainable products in emerging markets with high levels of environmental concern. More so than in India, the burden of tackling sustainability is on the Chinese government with private enterprises keeping themselves competitive by increasing ESG monitoring and publishing reports. For consumers, air pollution and other environmental issues top the list of concerns with a significant focus on health but not at the cost of convenience.

L'Oréal: A case analysis of contextualised sustainability by brands

L'Oréal Groupe is one of the global frontrunners in sustainability engagements helmed by the private sector. It has been recognised as a United Nations Global Compact LEAD company for over seven years. As part of its commitment to the Ten Principles for responsible business and for placing the United Nation’s SDGs, L'Oréal launched its second sustainability programme, L’Oréal for the Future, in June 2020.  With a variety of environmental and social commitments, the analysis for this article focuses on three aspects:

• Comparative analysis on the kind of environmental initiatives L’Oréal undertakes in India, China and the US.
• Local adaptations of their global ‘Stand Up’ initiative that aims at combatting street harassment. L’Oréal has also operated in both India and China for nearly three decades through wholly owned subsidiaries.
• The leveraging of local sustainability issues to build value. .

On environmental initiatives, the overarching 2030 objective is to reduce its greenhouse gas emissions of all scopes by 50% per finished product. As a member of the ‘Business Ambition for 1.5°C’ initiative, the Group has also committed to net zero emissions by 2050.

The Chinese teams continue advancing the L’Oréal for the Future programme, from eco-design to plastics recycling. One example is L’Oréal Paris Extraordinary Oil shampoo, an innovation developed by teams in China whereby every part of the packaging, including the pump, is recyclable – a first for the Group.

In India, L’Oréal’s operated sites including factories, distribution centres, research and innovation centres and administrative offices have achieved 100% renewable energy usage. Furthermore, their Green Pathways project focuses on ecological restoration in the drought-prone and water-scarce Yavatmal district in Maharashtra, India. Since its inception in 2021, over 4,500 hectares of degraded land has been restored, enhancing water storage capacity in the region by 150 million litres, benefiting over 1,800 vulnerable farmer families with a 20% increase in income. By 2030, they aim to restore 10,000 hectares of land through this initiative.

L’Oréal USA joined the US Plastics pact, which brings together over 850 organisations over common definitions and concrete targets to accelerate progress toward the US circular economy for plastic. L’Oréal’s commitment to land restoration in India corresponds to Indian consumers’ focus on environmental pollution while in the US, collaborative action for a circular economy is prioritised where the discussion around sustainability revolves around the circular economy.

L’Oréal’s ‘Stand Up’ initiative aims to promote self-defence training to combat street harassment. However, in China, the brand delved deeper into understanding its consumer profile and the social concerns of its target audience. This led to a shift in focus towards addressing sexual harassment in the workplace, making it more relevant to the local context. In India, this programme has trained over 850,000 individuals to effectively address street harassment. While their global initiative is partnered with Right to Be, in India L’Oréal has partnered with Breakthrough, an Indian NGO working against gender-based violence and discrimination. In France, on the other hand, the ‘Stand Up’ programme has online courses and statistics on street harassment with a call to include victims and witnesses of this crime. This manner of responding to their consumers in each country – workplace harassment in China, partnering with local NGOs on gender-based violence in India and directly addressing women in France through their website, reflects a localised approach for their global programmes to enhance the impact of these initiatives.

Not only cascading group level initiatives, L’Oréal’s country subsidiaries also create and run their own sustainability initiatives to leverage locally relevant topics. For example, diversity and inclusion is a priority for L’Oréal USA with the Inclusive Beauty Fund and civil society partnerships with onePULSE Foundation for its scholarship programme. This reflects the ongoing cultural conversation in the US where diversity, equity and inclusion (DEI) is forefront for consumers. L’Oréal USA’s website has statistics on gender, sexuality, disability, Black Indigenous People of Colour, veteran and working parents’ representation in the organisation. While this caters to the US’ approach of affirmative action and upliftment, this kind of representation is unachievable and to some degree, unnecessary, in markets like France where the perspective is based on equal rather than equitable treatment of minorities.

L’Oréal Groupe’s brands showcase a high degree of autonomy when it comes to their approach to sustainability topics. For example, in 2014, Garnier faced backlash as their personal care products were distributed in care packages to female Israeli soldiers by its Israeli subsidiary. Garnier USA then released a statement saying that they do not condone this initiative managed strictly at a local level. This contrarian navigation by both Garnier Israel and Garnier USA shows how brands manage local adaptations including dealing with controversial topics.

L’Oréal’s brands and strategies provide a clear perspective on the mix of group-level initiatives, that align with larger goals and strategies, and country-level initiatives, that correspond to local consumer sentiment and values. The right balance of autonomy and leadership in sustainability related areas is key to build brand value for retailers.

Conclusion: The collectivist vs. individualist approach to sustainability

Consumers have distinct regional variations in sustainability implementation and consumer attitudes that have an impact on the retail sector. In Western markets, environmental responsibility is shared between government and private sectors, with a strong focus on social and environmental issues both. In contrast, emerging markets like India and China approach sustainability through the lens of operational efficiency and cost savings. Despite showing higher environmental concerns than mature markets, Indian consumers expect governmental leadership in sustainability initiatives while remaining cautious about greenwashing. China presents a unique case where sustainability is predominantly government-driven, focusing primarily on environmental rather than social concerns, with consumers showing increasing scepticism towards corporate sustainability claims.This is due to the cheap availability of labour combined with cultures where saving is prioritised. According to Bain & Company, consumers in fast-growing markets, where environmental concerns tend to be highest - such as India, Indonesia, Brazil, and China - are willing to pay between 15 and 20%, a greater premium than in the West. Additionally, consumers cited the lack of availability of a variety of sustainable products as a challenge. Overall, the Indian consumer is highly price-sensitive and hence focuses on sustainability efficiently. Extremely averse to greenwashing, this group focuses on sustainable products for health and wellness benefits to counter the impact of environmental pollution. An analysis of the repair economy in these three zones shows that while Western countries approach it as a sustainable method with retailers starting to incorporate it into their offerings, emerging markets such as India and China have advanced economies for repair due to operational efficiencies.The sustainability say-do gap reflects the difference between expressed intention and action. While data from the US and Europe shows that consumers will not pay significant premiums for sustainable products, there is a lack of information regarding emerging markets like India and China. Ipsos Behavioural Science White Paper on the sustainability say-do gap details that focusing on enabling actions that people are already inclined to take can facilitate the adoption of sustainable behaviours. This provides a concrete action plan for retailers and brands where they can build brand value by engaging with consumers on sustainable actions that they are leaning towards taking. For example, consumers in the Asia-Pacific region tend far more towards health-conscious decision-making compared to their Western counterparts. They consider making healthier choices for themselves and their families, often evaluating sustainable products to improve health. By adapting their sustainable initiatives and communication around this focus on health and wellness, retailers can build a connection with their customers.L'Oréal's case study demonstrates the value of having a strategic global vision with local execution for sustainability topics. From land restoration initiatives in India, gender equality programmes in China, and diversity and inclusion programmes in the US, L’Oreal has provided guiding principles for retailers on successful market-specific adaptation of sustainability initiatives. It has provided a clear framework on how group-level initiatives like Stand Up can be implemented at a local level to ensure impact and brand relevance. Striking the strategic balance between global vision and local execution has proven increasingly crucial for brands and retailers alike.

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CHECK OUT THE PHOTOS OF FORTNUM & MASON

Fortnum & Mason is the only department store whose core economic engine is food and drink, generating nearly two-thirds of revenue. Located on London’s Piccadilly, the store is 6,000 square metres and employs around 1,000 staff. It currently holds two royal warrants granted by King Charles III and Queen Camilla.i

As for other department stores, such as Galeries Lafayette, Fortnum & Mason is privately owned. Positioned as a heritage luxury department store with a single cultural landmark flagship widely regarded as a tourist attraction, Fortnum & Mason is characterised by a predominance of full-price luxury merchandise and great international brand awareness, attracting affluent travellers.

Over three centuries, the grocer-turned-icon, still trading under the same turquoise colour, has converted from supplying the Crown into profitable retail ventures. Fortnum & Mason offers a blueprint of how heritage meets innovation, how experience can protect against footfall volatility and how operational efficiency enhances brand storytelling.

The origins of a retail institution

The genesis of a brand: from household waste to high-end retail

Fortnum & Mason started in 1707, when William Fortnum, then a Queen Anne’s footman, joined forces with his landlord, the St James’s shopkeeper Hugh Mason. Fortnum’s habit of reselling the royal household’s half-burned candles provided initial funding, and the two partners opened a grocery store in St James’s Market. From this first venture, Fortnum & Mason positioned itself at the intersection of refined taste and commercial flair. By the middle of the seventeenth century, the store had become an unofficial provisioner to royal and aristocratic customers as well as London’s growing mercantile class.

By 1761, Charles Fortnum, grandson of William, entered Queen Charlotte’s service, reinforcing the family’s court connection. Besides bringing cachet, the link to the Crown guaranteed steady and early success. Then, three pillars would remain at the core of the store's business success for centuries: proximity to political power, mastery of import logistics through Britain’s expanding empire, and relentless product novelty, which turned necessities (such as tea, candles, and preserves) into desirable luxuries.

The nineteenth century was an era of growth. During the Napoleonic Wars, the store supplied British officers with dried fruit, spices, and preserves, establishing a reputation for reliability. Queen Victoria famously ordered bottled beef tea for Florence Nightingale’s War hospitals, reinforcing the brand in the national imagination as purveyor of comfort in adversity. These high-profile adventures generated press coverage that no advertising budget could match.

At that time, Fortnum & Mason also invented, or at least popularised, the luxury hamper, an elegant wicker basket packed with provisions for railway journeys and country-house weekends. Hampers became both a revenue stream and a portable marketing billboard for the store. The Victorian decades saw the shop rebuilt on a grand Neo-Georgian scale, with large windows and gas lighting, transforming displays and inviting shoppers to linger.

Modern times: wars, prosperity and change in ownership

In the twentieth century, the two world wars forced Fortnum & Mason to adapt. During World War I, the company provided comfort parcels for officers, and in World War II, it produced Service Chocolate, a calorie-dense bar in a bright pink wrapper which was requisitioned by the Ministry of Food. The emphasis on quality within constraint reinforced, yet again, Fortnum & Mason’s as a purveyor of comfort in adversity.

Post-war austerity gave way to renewed prosperity. In 1951, Canadian businessman W. Garfield Weston acquired Fortnum & Mason, bringing capital for modernisation while retaining the store’s private company agility. Installed in 1964 over the Piccadilly entrance, the iconic four-ton clock has become a tourist landmark. Each hour, automated figures of Fortnum and Mason characters bow to one another, accompanied by chimes. During the 1960s and 1980s, Fortnum & Mason cautiously expanded into other categories, such as fragrances and fine jewellery. Yet food and beverage remained the most significant source of revenue, helping the business weather the department store’s downturn of the past decades.

Now, Fortnum & Mason operates under Wittington Investments, which is controlled by the Weston family. Besides Fortnum & Mason, the company is famous for owning Selfridges until 2021. They now own Heal’s (upmarket furniture chain), real estate, various private equity and property holdings. Additionally, Wittington Investments holds a majority stake in Associated British Foods (ABF), a FTSE 100 conglomerate that owns Primark, Twinings, and British Sugar.

A snapshot of the business: profitability rooted in purpose

Appointed by Wittington Investments in 2020, CEO Tom Athron, who spent six years as Waitrose’s CFO, developed a storytelling, hospitality, and sustainability strategy. Financial resilience has been notable. FY2022 declared turnover was £187 million, returning to a £6,1 million profitability post-Covid. In FY2023, declared revenue was up 11.9 % to £208.6 million, and gross margin improved to 44.4 %. Pre-tax profit rose to £9.3 million in FY 2024 on declared sales of £228 million. Also, the company saw a 20% increase in its wholesale business. Finally, with shipment available in over 120 countries, online sales are now accounting for 36 % of turnover by FY2024.

More specifically, 63% of the turnover is generated from food and drink, including teas, biscuits, preserves, speciality groceries, spirits and wines. The home, beauty and lifestyle categories account for 18%, encompassing tableware, candles, fragrance, accessories and leather goods. Hospitality and experiences generate 9 % of the turnover and include restaurants, masterclasses and events. Last but not least, the famous hampers represent approximately 10 % of sales, with a 10 % YoY volume growth at Christmas 2024. The latter decades saw Fortnum & Mason’s hampers go global, boosted by the rise of air travel and corporate gifting. International luxury ingredients, such as Iranian caviar and Jamaican Blue Mountain coffee, were added to British heritage products, while foie gras was discontinued due to animal welfare concerns. Same-day London delivery and temperature-controlled shipping are available to the 200+ hamper SKUs.

With entry prices such as £5.95 for preserves and £6.95 for tea bags, driving conversion and souvenir appeal, Fortnum & Mason sits at the intersection of everyday luxury and British heritage, mainly attracting three types of customers: affluent international tourists, who represented 40 % of Piccadilly footfall in peak Summer 2024, domestic treat seekers, who are primarily Millennials and GenX Londoners, and finally corporate clients leveraging hampers for softpower gifting.

Fortnum & Mason’s current era: a modern luxury model rooted in legacy

Store organisation: the experiential pivot

To mark its 300th anniversary, the Piccadilly flagship underwent a £24 million refurbishment, reopening in 2007 with expanded hospitality spaces and restored Georgian facades. The investment accelerated a strategic pivot from retail-only to a combination of retail and experiences with restaurants, cookery masterclasses, and immersive window theatre becoming key traffic drivers at a time when footfall on traditional high streets was declining.

With F&B options on four floors out of six, the -1 floor is home to the food hall and the wine cellar. It also features a rather dark wine bar and click-and-collect service. Food-to-go options and the Lower Ground coffee-to-go kiosk are available on this floor to capture a greater share of the local weekday trade. The ground floor, the ‘pièce de résistance’ of the store, is bustling and offers Fortnum & Mason's core products (tea, marmalades, coffee, chocolates, sweets, biscuits and patisserie). Cash desks are positioned on this floor, with entry-price items displayed along the queuing journey. Finally, the 45 Jermyn St. fancy restaurant opens from breakfast to dinner.  The first floor is dedicated to teaware, stationery, accessories, and picnic equipment. The busy The Parlour restaurant is specialised in ice cream. Gift wrapping is available on this floor. The second floor seems to be designed for the female clientele. It offers a large beauty section and a significant niche fragrances section. Unlike the other floors, which primarily sell Fortnum’s own brand products, this floor offers a selection of luxury international brands. The space is complemented by women’s hats and scarves, loungewear and jewellery. Personal shopping services and a beauty room are positioned on this floor. The famous hampers are available on the third floor, offering a service that allows customers to design their own hampers. The Food & Drink Studio occupies a significant section of the floor. When there are no cooking classes, chefs are preparing pastries or pasta, offering a food spectacle to shoppers. A cook shop and a book shop complete the floor, which feels somewhat empty. The 3’6 bar is an intimate, speakeasy-like cocktail bar. Finally, the fourth floor is home to The Diamond Jubilee Tea Salon, an homage to the British tradition of afternoon tea. Queen Elizabeth II formally opened the room in 2012, renewing the special bond between the store and the Crown.

Floors are accessible through elevators and two different staircases, including a double-helix one. While the ground floor is packed with merchandise and customers filling their baskets with tea boxes and sweets, the other floors are airy and sometimes feel empty. During a weekday visit, the upper floors were relatively empty, with only a few customers shopping. Only the ground floor and the restaurants were busy. Some parts of the upper floors could be enhanced with additional products to recreate the ground floor’s product abundance, clearly inviting a food shopping spree.

Retail expansion with intention: scarcity as an asset

Additionally, Fortnum & Mason has developed an international presence over the years, always controlling scarcity. Similarly to Harrods, they demonstrate deliberate resistance to overextension, preserving the brand mystique and ethos. As a result, in addition to dozens of wholesale stockists, they are adopting a selective retail presence:

• A store at St Pancras International rail station opened in 2013, with click-and-collect services.
• A bar and a store at Heathrow International Airport opened in 2014, targeting premium international travellers.
• A store, bar and restaurant at the London’s Royal Exchange boutique opened in 2018.
• A store and restaurant launched in 2019 at K11 Musea in Hong Kong as the first overseas venture, designed as a brand embassy for Asian luxury consumers.

In June 2025, the company announced a regional UK expansion project beyond London, aimed at addressing the surge in demand for its luxury teas, biscuits and jam. While more than one additional store could open, they are currently exploring sites with iconic architecture, continuing to resist a mass rollout.

From legacy to leadership: Fortnum & Mason’s innovation agenda

Tech upgrades and operational efficiency

With a 7% decline in online sales during Christmas 2024 due to issues with hamper deliveries, e-commerce has been a challenge at Fortnum & Mason. The retailer has optimised its supply chain by consolidating its four distribution centres into one, increasing its e-commerce capabilities. While the situation is improving, demand still exceeds their delivery slot capabilities. This is why the company deliberately limits the number of orders, making sure they can fulfil them while maintaining excellent service.

Fortnum & Mason shows great dynamism in optimising operations to improve productivity. From 2024, the company began rolling out an AI-powered forecasting and merchandising system, developed by Relex, across its category buying teams, which were previously using spreadsheets. In-store, they successfully reduced the number of steps in the checkout process, resulting in a five-second decrease in transaction time per customer.

In parallel, in March 2025, Fortnum & Mason entered the on-demand delivery market. They partner with premium groceries delivery platform Zapp to offer 24/7 60-minute delivery across London. No longer seen as a Christmas-focused business, this initiative marks a significant milestone in terms of customer centricity and service for Fortnum & Mason as they claim to be the first of London's high-end stores to partner with an on-demand delivery service.

Subscription service: repositioning the brand beyond Christmas through convenience

Increasingly focused on customer centricity and convenience, Fortnum & Mason unveiled a three-tier subscription delivery service in 2024:

• At £100 annually, the Tea Post subscription offers customers a year’s supply of monthly refills of a choice of Fortnum’s tea blends. Subscribers also receive a personalised china mug, tin and strainer.
• The Biscuit Post, which costs £20 a month, offers refills of the Toffolossus, Chocolossus or Gingerlossus biscuits, available on either three-month, six-month or 12-month subscriptions.
• The third subscription, called the Teatime Dispatch, offers a selection of tea and biscuits, as well as a choice of jams, for £75 a month.

From customer to member: building a brand-led community

In 2025, Fortnum & Mason took another step toward emphasising customer relationships. They launched Friends of Fortnum’s paid membership programme offering exclusive events and early access to product drops. The scheme costs £100 per year. Members will receive a curated welcome gift, seasonal gifts and free next-day UK delivery on all orders over £25. Subscribers will also be able to access tickets for exclusive events, along with other small extras, when shopping in-store or dining at its restaurants. The department store developed the programme in direct response to customer feedback seeking a closer connection to the Fortnum & Mason brand. Despite discreet in-store advertising, the early stages of the launch are said to be very positive. Their re-platformed CRM, powered by SAP Emarsys, enables behavioural segmentation and provides first-party data capture.

Finally, marketing activations have been launched through noteworthy partnerships. They have recently partnered with actor and cooking expert Stanley Tucci for a cookware range and with multi-layered cake brand Get Baked, which has drawn younger crowds to the store thanks to its success on TikTok.

With food and beverage at its core, Fortnum & Mason stands apart as a department store. Turning its historic specialisation into a competitive advantage, the company’s food-centric heritage and royal cachet sustain its cultural relevance. Its deliberate emphasis on experience over expansion, high-margin own-label assortments, and curated internationalisation reflects a relevant approach to luxury retail. Additionally, the company demonstrates that category focus, rather than scale, can define global luxury success.

The future of Fortnum & Mason holds uncertainties, though. Achieving less than £250 million annually, the centuries-old business is real but narrow. Concentration in one flagship, UK tourist tax policy, and high exposure to raw material inflation are threats to the company.

Finally, the consequences of climate change may reveal a more fragile business than the brand aura suggests. Driven by heatwaves and floods, Darjeeling tea output fell to a 170-year low of less than 6 million kg in 2024, and Assam tea production dropped 7.8%, two key products at Fortnum & Mason. While food and drink have always been its core business and a success enabler, this shows how Fortnum & Mason's heavy dependence on certain products could transform into a threat to its future—a cautionary tale to keep in mind.

Credits: IADS (Christine Montard)

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Depending on countries, there are different ways of sharing company ownership, whether it’s through partnerships, worker cooperatives, ESOPs (Employee Stock Ownership Plans, collective pension trusts in which employees do not have to put up their own money) in the US, or employee stock purchase plans, which allow employees to buy company stock at a discount. Company ownership can also be shared with customers.

At a time when younger generations look for more meaningful jobs and a sense of belonging in responsible companies, shared capitalism in its different forms is interesting to consider. Taking the opportunity of the IADS welcoming John Lewis & Partners department store among its members, the article reviews three other retailers with different shared capitalism models besides the partnership model: System U supermarkets in France, Walmart, and outdoor retailer REI in the US. How do these models work? What are the benefits for the stakeholders and the limitations for companies?

Four examples of how shared capitalism works

John Lewis Partnership

The John Lewis Partnership (JLP) model is a unique employee-owned business structure in the UK. It operates John Lewis department stores and Waitrose supermarkets. JLP is owned by a trust on behalf of its 70,000+ employees, known as Partners. All employees are Partners but do not buy, sell, or hold personal shares. Instead, they automatically become Partners with a non-transferable collective stake that only exists while employed. As a result, there is nothing to give back when they leave, as their participation in the ownership ends automatically upon their departure. JLP abide by a constitution and has a democratic governance system where employees have a voice in company decisions. The power is shared between the Chairman, the Partnership Board and the Partnership Council. Employee influence operates through multiple channels:

• The Partnership Council: A group of elected employee representatives reviews strategic decisions, such as significant investments, operational shifts, or company restructuring. The Council has three vital decision-making powers:
  • To elect three Trustees of the Constitution, five Directors to the Partnership Board and four Trustees to serve as Directors of John Lewis Partnership Pension Trust.
  • To change the Constitution, with the Chairman’s agreement.
  • To dismiss the Chairman.
• Local and regional forums: employees can express concerns and ideas through smaller councils at store and department levels, which report to higher decision-making bodies.
• Annual partnership vote: Partners vote on key policies and leadership performance, influencing the company’s direction.
• Consultation on strategic changes: while Partners do not directly set strategy, leadership consults them on significant initiatives, including pay structures, business transformation, and store operations.

Employees primarily influence leadership accountability via votes of confidence in management, workplace policies (including benefits, working conditions, and store operations), company values, and ethical stances. However, they do not directly control high-level commercial strategies (acquisitions, major cost-cutting measures, for example) but have a voice in how these are implemented.

Walmart stock purchase plan

Another model is Walmart’s Associate Stock Purchase Plan (ASPP), which offers almost all employees the opportunity to purchase company stock. Employees can enrol in the plan and select a contribution amount deducted from their paychecks. Associates choose to contribute a portion of their paycheck, with options ranging from $2 to $1,000 per pay period.

Walmart employees who participate in the ASPP and own Walmart stock in their name have the legal right to vote on shareholder matters, including the election of board members. When an employee purchases Walmart shares through the ASPP, they become a registered shareholder and receive proxy materials yearly, including ballots to elect directors to the Board and participate in advisory votes on executive compensation and shareholder proposals on ESG issues, labour, governance, etc.

However, individual ownership is small at Walmart. Even if many employees vote, they rarely represent a large enough bloc to influence outcomes, and unlike co-op or trust-owned models, Walmart does not reserve board seats for employees. The ASPP aligns employee interests with company performance, supports a shareholder-centric culture and offers financial benefits to employees, but its underlying strategic purpose is corporate-driven.

Système U federation

Système U is one of France’s most prominent retail cooperatives, operating a network of supermarkets and hypermarkets under banners like Super U, Hyper U, U Express, and Marché U, representing around 1,600 stores across France and over €20 billion in annual revenue. It stands out in the French retail landscape due to its cooperative model, which is owned and governed by independent retailers, not by a central corporate entity. As a result, Système U is not a single company but a federation of independent store owners, each owning and managing their store(s). These store owners are members of regional cooperatives, which in turn are members of the national cooperative, Système U.

Each member has a say in strategic decisions, based on the one person = one vote principle typical of cooperatives, regardless of the size of their store. Members hold voting rights to influence various aspects of the cooperative's operations:

• Elect individuals to the Board of Directors.
• Vote on significant strategic initiatives, including expansion plans, major investments, and changes in business focus.
• Pricing strategies, marketing campaigns, and other operational policies may be subject to member approval.
• Vote on the annual budget and how members' profits are distributed.
• Any proposed amendments to the cooperative's bylaws, which govern its operations and member obligations, require member approval.
• Existing members may vote on the acceptance of new members into the cooperative and on disciplinary actions, including potential expulsion.

Major decisions are made during General Assemblies, where members discuss and vote on various issues. These assemblies provide a platform for members to voice their opinions, debate proposals, and collectively shape the cooperative's direction. For specific areas such as marketing, logistics, or product selection, committees and working groups comprising member representatives may be formed. These committees make recommendations, which are then voted on by the broader membership.

REI co-op

Unlike the retailers mentioned above, US outdoor retailer REI (Recreational Equipment, Inc.) operates as a consumer cooperative, a distinctive business model in which the company is owned by its members, the customers, who purchase a lifetime membership currently priced at $30. REI grants customers voting rights in board elections and annual dividend eligibility based on purchases. Every year, REI members can elect members to the board. Those members work with the president, CEO, and senior leadership team to set the co-op's direction.

The benefits of the models

For companies: business longevity, improved performance

John Lewis Partnership fosters long-term stability. Since there are no external shareholders and no dividend pressure, it focuses less on short-term profits. This allows for long-term strategic planning and reinvestment into the business. The company can make decisions prioritising business longevity rather than immediate stock market reactions, reducing the pressure of short-term financial targets, an advantage also mentioned by REI’s CEO back in 2017 when the company posted excellent results closely tied to REI’s cooperative business model. The UK Treasury analysed data from confidential tax records on tax-advantaged share schemes at over 16,000 UK firms and found that employee ownership is linked to improved firm performance measures, such as value-added and turnover. Also, JLP employees have an ownership mindset and tend to be more engaged because they have a direct stake in the company’s success. IZA World of Labour studies show that employee-owned businesses often have better performance, lower turnover, and higher retention rates. Forbes mentions that “employee-owners are typically more committed to the client experience than regular employees are. […] People often take better care of what they own than what they don’t.” Engaged employees offer better service, aligning with John Lewis's reputation for high-quality customer care.

Besides, the company’s employee ownership model can be a competitive advantage, attracting customers and employees who appreciate “ethical” business practices. This is the case for Walmart. As one of the world's largest private employers, the ASPP positions the company as socially responsible by promoting employee participation in capital markets. It supports the company’s messaging around economic opportunity and upward mobility for hourly workers.

In the case of Système U, store owners are directly involved in operations and profits, ensuring strong local responsiveness and motivation.

For employees: profit sharing

Although this has fluctuated recently, JLP has historically shared annual profits with employees through a Partnership Bonus. For example, in March 2025, despite steady financial performance, the partnership continued its bonus freeze. However, it has invested GBP 114 million in partners' pay, reflecting a strategic shift towards regular staff support rather than annual bonuses. Also, the partnership model fosters stability as there are likely fewer layoffs during recession times, as there are no shareholder returns.

Unlike JLP, where participation in the ownership ends upon employee departure, shares are legally owned by Walmart’s employees who are part of the ASPP, even when they leave the company, offering them potential profits beyond their tenure at Walmart. Also, the company matches 15% of the associate's contributions, up to $1,800 in contributions per year. In January 2024, Walmart announced a 3-for-1 stock split to make stock ownership more accessible to associates. For each share owned as of February 2024, associates received two additional shares. This move aimed to encourage greater participation in the ASPP and to encourage associates to think like shareholders.

While not owned by employees, REI is known for investing most of its profits into initiatives like employee profit-sharing. The company has been acknowledged as a leading employer, earning accolades such as Forbes' Best Brands for Social Impact and Best Employers for Diversity & Women.

The employee-ownership model fosters a collaborative and inclusive culture, leading to higher job satisfaction, better work-life balance, stronger workplace culture, and a sense of purpose and belonging.

Customer benefits: the specific case of REI

Also valid for JLP, the public perception can improve as the company benefits from a reputation as a fair employer with ethical stances such as prioritising workers’ well-being or community engagement. REI's structure emphasises member engagement and community involvement, setting the company apart from traditional retail corporations. REI’s marketing has long been built around positioning the company as a positive force for the environment and society. It is known for investing parts of its profits into initiatives like ecological programmes. Turning 10 in 2025, a significant example is the #OptOutside campaign, in which the company shuts down each year on Black Friday so staff can spend time outdoors. Also, REI offers programmes like the Co-op Racial Equity, Diversity & Inclusion (REDI) Learning Series, with over 15,000 employees participating to enhance their understanding and engagement in these critical areas.

Joining the co-op by buying a membership gets customers an annual 10% cashback on all eligible, full-price purchases and other membership benefits such as free shipping with no minimum order, a full year for most returns, coupons for gear and discounts on shop services and classes. REI advertises that members’ voices matter in shaping the products REI makes, the stories they tell, and the co-op's future. Members can share their story on REI social media, be considered a model or crew for an upcoming photo or video production, be selected to give feedback on product design, and vote for the co-op’s Board of Directors.

REI’s Board of Directors determines each Spring whether and how dividends are distributed, based on the co-op’s financial health. In years with substantial profits, members receive a dividend as store credit. Despite weak financial results in 2023–2024, REI’s website advertises that members earned more than $200m in co-op Member Rewards from their eligible 2023 full-price purchases. The dividend is not a legal profit share or stock dividend—it’s a cash-back system based on spending and available profits. As a result, can it be considered a great loyalty programme with cashback and a tool to foster strong community-building?

Challenges and limitations of shared capitalism

Financial and other pressures

In a highly competitive retail sector, JLP has struggled in recent years with declining profits, leading to store closures and restructuring and limiting bonuses, which can impact Partners’ morale. In March 2025, despite a 73% increase in pre-tax profit, JLP is still in turnaround mode, which explains the glum message about UK retail sent to employees explaining the absence of bonuses. Overall, operational costs can also be higher due to extensive benefits. Finally, research on JLP mentions the partnership democratic model entails slower decision-making and challenges in expansion or if radical transformation is needed as it might be difficult to balance commercial and financial pressure with Partnership principles.

In the case of REI, sales began to decline after more than a decade of growth before the pandemic and a 36% post-COVID sales rebound in 2021. REI reported a net loss of $311 million for 2023, partly attributed to its dividend for co-op members, once the very reason for the company's success. In 2023 and 2024, REI implemented cost-cutting measures, including layoffs and reduced employee hours. CEO Eric Artz emphasised a more realistic approach: “there is no mission without margin.” The company must now reconcile financial realities with its employee-first identity and maintain its cultural distinctiveness while remaining competitive in the retail landscape.

Low employee engagement

The actions taken at REI have triggered discontent among employees as many feel the company is becoming indistinguishable from traditional big-box retailers. In response, ten REI stores have unionised, and staff have organised protests and worn pins saying, “Ask Me About My Pay Cut,” challenging REI’s branding as an ethical employer.

Additionally, employee ownership is subject to the free-rider problem since the rewards from individual effort are shared with other workers, with ownership and bonuses distributed equally or based on tenure rather than individual performance. As a result, the direct incentive to work hard may be weak, which can lead valuable workers to leave. Overall, the system can avoid penalising low performers and rewarding high performers.

Also, employees who own stock should be more likely to be motivated by company performance, productivity, and long-term profitability. This is why Walmart encourages employees to be part of the ASSP. However, the truth is that only around 25% of Walmart employees participate in the plan, which shows that employee engagement might remain limited. Research on JLP shows that some Partners feel disconnected from democratic processes and don’t actively engage with democratic structures. Also, they can demonstrate resistance to change and modernisation.

The diverse models of shared capitalism in retail demonstrate both the potential and complexities of alternative ownership structures. The experiences of John Lewis Partnership, Walmart, Système U, and REI reveal that success requires carefully balancing democratic principles with commercial imperatives, employee interests with financial sustainability, and idealistic values with practical realities. As traditional retail continues to evolve under pressure from e-commerce and changing consumer expectations, these models offer valuable lessons about alternative ways to organise retail businesses, even if they may not represent a universal solution for the sector's challenges. For a company, shared capitalism, especially the partnership model, can foster stability, resilience, and brand differentiation. For employees, it offers profit-sharing, a say in governance, higher job security, and a strong workplace culture. However, financial challenges and market pressures mean the model must continuously evolve to remain competitive. So far, the JLP model has proven resilient and successful over its long history, though it faces increasing pressure in the modern retail environment.

Credits: IADS (Christine Montard)

PRINTABLE VERSION HERE

Check out the photos of IKEA Oxford Street

It took IKEA a long time to open stores in city centres. Set to develop from 2002, the first city-centre stores only opened in 2014 in Hamburg and 2019 in Paris, followed by many more. At the heart of this transformation lies a core question: what should an IKEA store look and feel like in the centre of a global city? Beyond simply shrinking its footprint, IKEA seeks to redefine the role of retail within urban ecosystems, from a warehouse to a hub for inspiration, interaction, and services.

With its first store opening in 1987, IKEA is already present in the UK, where it operates 22 stores and employs nearly 12,000 staff. The retailer has five locations in London, adding a sixth one with the muchanticipated London Oxford Street IKEA City store which opened on 1 May 2025, 18 months later than planned. Requiring huge investments, the new store demonstrates the company’s faith in the success of high street outlets. Even London Mayor Sadiq Khan praised the store and considers it a “vote of confidence in London, in our economy and in our plans to rejuvenate Oxford Street”.

The store is the brand’s most significant investment in a single site to date, and most probably its most high-profile store. Announced with much anticipation and fanfare, the store promised to signal a new chapter for IKEA in the heart of London. But does it deliver on that ambition? And how far does it really depart from the IKEA playbook?

Experimentation: how IKEA is prototyping the city-centre store

Since its inception in city centres in 2014, IKEA has followed a test-and-learn process for its small-format stores. Always eager to adapt to local specifics and evolving consumer needs, the company has tried various formats. Here are a few representative examples:

• A Decoration Store opened in Paris in 2021, offering 1,900 home accessory references (still operating to that day).
• Not a store per se, the Everyday Low Price Truck touring in Hong Kong during Summer 2021 was not selling anything but instead acting as a drive-to-store and data collection mechanism.
• Planning Studios opened in London (2018), Copenhagen (2019), NYC (2019) and Paris (2021), with uneven results.
• A three hundred square metres Close to You concept store opened in 2021 in Hong Kong, mixing 110 home furnishing products with 120 Swedish signature gourmet products.
• An unprecedented temporary nine sqm store opened in Paris, showcasing 10,000 products and 60 room sets in real size 3D, with the brand website only a click away.

While the most developed city-centre concept appears to be the IKEA City store, IKEA's experiments show how much the retailer’s strategy has pivoted from its long-standing model of large, car-accessible “big box” warehouse stores to an innovative, city-centre, strategically positioned, integrated, and community-focused flagship strategy. The shift responds to significant changes in consumer behaviour: online shopping is rising, car usage is declining, and there is a growing expectation that retail spaces serve broader cultural and social purposes. As a result, IKEA is willing to reinvent its physical retail spaces, aiming to transform itself from a product-based retailer into a lifestyle enabler, weaving its brand into the urban fabric to go far beyond the sale of furniture.

At the heart of this transformation are heavy investments in urban flagship locations, such as the acquisition of what was once the Peter Robinson department store and, more recently, the Topshop store on Oxford Street. This prime location offers unparalleled brick-and-mortar presence, foot traffic and brand exposure, as well as a billboard for the brand itself. As is the case with other city-centre stores, the new Oxford Street location intends to be more than a miniature replica of traditional warehouses, but a hybrid space where people gather, share, and engage. Does the store live up to its ambition?

Immersion, play and anticipation: IKEA’s Hus of Frakta prelude to the Oxford Street opening

With the building acquired for £378 million and an investment of tens of millions of additional pounds in renovation, the store is IKEA’s biggest investment by far in a single shop, according to Ingkai, only adding to speculations and expectations of what the store could look like.

The store opening was anticipated with a notable activation, the fun, engaging and imaginative Hus of Frakta (House of Frakta) pop-up in November 2024. Based on the iconic, ubiquitous blue carrier bag (IKEA reports that 45% of UK households own one), the pop-up was an all-blue immersive experience celebrating the bag in a way that felt part gallery, part luxury, and part playful. Visitors were greeted by a dramatic giant Frakta sculpture at the entrance. Inside, a “Blue Edit” display showcased a selection of blue products presented as if in a gallery. A key highlight was “The Atelier”, where visitors could personalise their Frakta bags with initials for a modest £3 fee (free for IKEA Family programme members). Shoppers would receive a certificate of authenticity with their personalised bag, further reinforcing the pop-up's blend of humour and luxury. Additionally, the pop-up transformed a mundane object into a multi-sensory experience through an immersive mirrored room, simulating being inside a Frakta bag, accompanied by a designed ASMR soundscape that mimicked the bag’s crinkling. Finally, playful surprises included a candy floss dispenser activated by a button in a curtained nook, offering blue cotton candy as an Instagram-ready feature. Following this significant and innovative activation, expectations were even higher for the opening of the flagship, fuelled by the long wait and the prominence of the location. Many anticipated a bold, experiential approach that would set this store apart from the standard IKEA formula.

Not quite the revolution: the Oxford Street store delivers practicality over vision

Instead, what has opened is essentially a miniature 5,800-square-metre version of the familiar IKEA model. It certainly ticks the efficiency box, like grabbing essentials in under an hour during a lunch break. With no parking space, the Oxford Street IKEA City store is designed for people travelling by public transport and unlikely to leave with large items. This is why the home delivery service was emphasised with a specific campaign featuring taxis loaded with IKEA products, amplifying the delivery angle. The store feels like a typical IKEA, without requiring a half-day commitment.

This feeling is reinforced with the typical big-box customer journey that features a showroom, market hall, and self-service furniture area. Spanning three floors, it offers approximately12,000 SKUs, with about 3,000+ items available for immediate take-home (advertised with specific tags), striking a balance between showroom inspiration and convenience.

IKEA aims for the store to blend seamlessly into the local culture. To that end, the store features a ‘London vibe’, with showroom room sets co-created with locals, highlighting resident styles. Sadly, the Londoners appear more like marketing personas, with the hipster guy focused on repair culture, the drag queen on her wigs, the middle-aged, tidy lady who’s all about organisation and storage, the old, traditional yet quirky British lady, and more. Still, while it feels a bit artificial, it is the only feature adding a bit of flair to the store.

More in detail, the Oxford Street store is organised as follows:

• Exterior: The entrance is flanked by a large window on each side. These windows are only large digital screens, alternatively featuring service and product offerings. This choice trades aspiration for convenience. It appears to be a mixed opportunity for offering city dwellers what London's retail and department stores are known for: exceptional window displays.
• Ground floor: Relatively small, it primarily serves as the store's entrance. Still, it features a selection of affordable products tailored to the season, IKEA-brand merchandise, promotion of the IKEA Family programme, self-service points, and a sneak peek into furniture with a wall of chairs and other small furniture pieces. The first products customers see upon entering the store are £0.50 candles, consistent with the rest of the store, which features numerous items under £3. Besides affordability, the product selection on the ground floor doesn’t tell a cohesive story.
• -1 floor is home to the showroom. As usual, it is organised by room sets and product types (living room, living room storage, workspaces, kitchen, dining, bedroom, bathroom, and children's), alternating with product showrooms (such as sofas, chairs, storage options, etc.). Considering Londoners live in small spaces, there is an untapped opportunity to offer beneficial inspiration and solutions for small-space living, including more dedicated room sets for studio apartments. This floor also features a planning space for one-to-one consultation services. At the time of the visit (weekday at 6 pm), only one planner was available and not busy. However, a larger section with several planner desks is open on weekends. The customer service for exchanges, returns, and click-and-collect is also located on this floor, at the end of the guided journey, as well as a small children’s play area surrounded by large digital screens that alternately feature metaverse-like nature views and cultural content. Finally, the floor tour concludes with the Swedish Deli food store and 130-seat restaurant. Ordering only goes through digital screens. The customers are invited to pick up their orders and find a seat. A part of the seating area can be used for community events. While the floor was relatively quiet, the restaurant was packed at the time of the visit. Escalators to the -2 floors are only visible once you end the -1 floor tour. On both floors, a few shortcuts are featured on information banners.
• -2 floor is home to the market hall, starting with cookware and tableware, then featuring textiles, lighting, home organisation, rugs and decoration. The floor journey ends with the self-service furniture area. Interestingly, checkouts are all at the end of the floor, forcing customers to walk the entire store. Only digital, the checkout counters were supervised by two associates at the time of the visit. On both floors, while digital interactions are encouraged through several self-service points, large screens, and “Scan & Go” app features, around ten sales associates were available to assist customers.

Overall, the store aligns with IKEA’s global omnichannel strategy, which integrates planning services, in-store ordering, at-home delivery, and click-and-collect functions. This approach is consistent with combining physical presence with digital infrastructure. The IKEA Kreativ tool, available in the app, features 3D and augmented reality design capabilities, enabling consumers to co-create their living spaces and interact with IKEA consultants across both physical and digital channels. From that perspective, rather than competing with the digital platform, the store amplifies it, a strategy also shared by department stores opening small-format stores, as is the case with IADS members Magasin du Nord in Denmark and Bloomingdale’s in the USA.

With its scale, location, and financial commitment, IKEA Oxford Street was never just another store. It was meant to be a flagship store and a prototype of the future. In that sense, the store is a paradox: efficient yet unremarkable. Sure, it delivers the essentials of the IKEA experience, convenience and familiarity, with urban adjustments (no parking, more delivery, digital touchpoints), but without fundamentally reimagining what IKEA could become in a city centre.

The result is a store that satisfies the operational brief but falls short of the innovative and experiential leap that many expected, especially considering the company’s test-and-learn philosophy. Probably intentional to make the store profitable, the execution plays it safe, rooted in the familiar logic of showroom, marketplace, and self-service flow.

Yet this outcome is not without value. It shows that prototyping at scale remains complex, especially for a brand as systematised as IKEA. The Oxford Street store is less a breakthrough than an important iteration in an ongoing process. The next challenge is to make it feel as alive and unexpected as the cities it seeks to inhabit.

i : Ingka operates 90% of Ikea stores globally.

Credits: IADS (Christine Montard)

PRINTABLE VERSION HERE

In an industry where information is plentiful but time is limited, retail professionals are seeking ways to make ideas more digestible, shareable, and memorable. This is why the International Association of Department Stores (IADS)  has decided to evolve from static formats to dynamic audio content, with the launch of IADS Retail Park, an AI-powered podcast series. Importantly, we have not abandoned our static formats; instead, we are embracing this new approach alongside them.

What started as an experiment to convert written exclusives into human-like audio stories has matured into a repeatable system that mimics the ebb and flow of honest conversations. This model bridges language gaps, compresses production timelines, and leverages AI not just for speed but for simulated connection.

This Exclusive aims at sharing the key learnings made so far with our members.

Why audio, why now?

Retail teams today are drowning in information but starving for meaning. Between dashboards, presentations, and constant communications, there's often little time to digest the why behind the what. Audio fills that gap by enabling passive yet meaningful learning, allowing retailers to learn while they do.

Unlike conventional media, podcasts provide an intimate listening experience that feels personal and relatable. As Scott Galloway notes, “When people approach me in the wild, it’s easy to discern where they’ve been exposed to my content. […] If they greet me like a friend they haven’t seen in a while, podcast. It’s a very intimate medium. You are physically in somebody’s ear, in a private setting — washing the dishes, working out, walking the dog. It’s just you and them.” When hosts interact with their listeners in a warm, familiar tone, it fosters a sense of connection and companionship, making the audience feel included in a conversation rather than just receiving information passively. This personal relationship boosts listener engagement and loyalty, encouraging audiences to return to voices that resonate with them on an emotional level. In a world full of distractions and competing sources of information, this personal touch can elevate a podcast from just another show to a vital source of insight and motivation.

The growth of podcasting is no longer speculative. With over 500 million listeners worldwide and platforms like YouTube spearheading its popularity, podcasts have become an integral part of our information landscape.

The attention deficit in retail

Retail professionals today face an overload of communication (constant emails, dashboards, decks, messages). But volume doesn't equate to understanding. The real issue is a scarcity of high-quality attention. McKinsey’s 2025 report on the “attention equation” argues that time spent engaging with media tells only part of the story. The quality of attention, measured by focus and intent, is what truly drives understanding and action.

Audio offers professionals to absorb targeted insights during “in-between” moments—on a stockroom break, during a morning commute, or while resetting a display. Rather than carving out extra time to consume content, employees absorb insights seamlessly within their routines, increasing the likelihood of information retention and action.  McKinsey’s findings show that consumers in the top quartile of attention spend twice as much as those in the bottom quartile. In an internal business context, this translates into more focused and better-informed retail employees who make smarter decisions and are more likely to act in alignment with company goals. With generative AI now able to simulate human tone and behaviour, these insights can be delivered in voices that sound intuitive and familiar.

Why podcasts work

Unlike traditional text-based communications, podcasts are intimate and emotionally resonant. They invite listeners into a shared space, creating what Galloway calls "companion media"—where the delivery feels less like a broadcast and more like a conversation. The spoken voice, especially when generated with attention to tone and cadence, can signal curiosity, authority, or empathy. It reinforces ideas not just through what is said, but also through how it's said.

Moreover, podcasts reduce cognitive friction. There’s no need to sit down and read. The message comes to the listener in a form that’s easy to consume and, often, more memorable than the written word. Podcasts are becoming the modern analogue to print magazines and newspapers—media consumed not only for entertainment, but also for education and professional development. Roughly three-quarters of podcast listeners use the same platform to stream both podcasts and music, making audio content an ambient part of their media diet. The podcast medium is also dynamic—27% of listeners consume content at accelerated speeds, particularly among Gen Z and millennials.

This emotional resonance is further enhanced by AI voice cloning, which enables podcast hosts to sound not only human but familiar, often replicating the tone and cadence of a known executive or contributor. This is increasingly relevant in retail, where leadership visibility is vital but usually limited by logistical constraints. Hearing a trusted voice (even an AI-generated one) can reinforce a sense of connection and clarity across teams. A study led by Cornell University found that students who listened to personalised AI-generated podcasts not only enjoyed the experience more but also retained information better and learned more effectively. Meanwhile, separate research shows that 80% of people perceive AI-generated voices as real, and most struggle to distinguish them from actual human speakers.

A clear example of this in action can be seen with Langham Logistics, which partnered with Stratablue to implement an AI voice agent that processes employee call-ins and immediately delivers updates to managers, ensuring consistent, human-like messaging across its workforce. Applied in internal retail briefings, this level of consistency helps forge emotional bonds between leadership and frontline teams. That’s powerful: when a familiar executive voice is mimicked believably, team members are more likely to trust the message and stay aligned unconsciously.

The result is a new paradigm for business communication. A podcast episode, briefing, or internal memo can now be drafted, voiced, and distributed in hours rather than days. And unlike conventional content formats, these audio pieces carry a personal tone that encourages engagement rather than obligation. This strategic use of audio enables retail organisations to create emotional resonance and align teams across locations, turning communication into connection and information into momentum.

Retailers already on air : Department stores and frontline voices

IADS is not the only one embracing audio as a strategic tool. Several department stores and retail groups already run their own podcasts. Galeries Lafayette’s Minuit aux Galeries shared behind-the-scenes stories after hours to celebrate their 150th anniversary. Harrods’ True Tales from Harrods brings in designers and creatives to explore what luxury means today. The Chalhoub Group runs The Podcast by Chalhoub Group (YouTube), an ongoing series that began in 2021 and remains active today, hosted by Lynn Al Khatib, VP of Communications. The show features regular conversations with internal leaders, partners, and industry figures on topics such as innovation, sustainability, and organisational culture, making it one of the few department store group podcasts consistently produced. Ámbito Cultural (YouTube), the cultural arm of El Corte Inglés, extends its in-store programming (literary events, exhibitions, and performances) through online recordings and talks, using digital content to broaden its cultural reach. Nordstrom’s The Nordy Pod, hosted by Pete Nordstrom, is a familiar example of how retailers are shifting from sellers to storytellers—using podcasts to share culture, leadership, and customer stories, and enhancing customer connection and brand visibility. These examples reflect what the industry already recognises: audio is now an established tool for connection, storytelling, and visibility

At the same time, there’s growing recognition of the value in podcasts hosted by or featuring front-line employees. Shows like Frontline Fridays, Retail Warzone, and Frontline Innovators bring unfiltered perspectives from the shop floor. They share stories about store operations, leadership, and workplace culture that rarely appear in formal communications. These voices bring balance to leadership messaging, revealing how strategy is put into practice.

Building the podcast – The IADS workflow

Since the IADS is committed to continually learning and sharing with its members and the retail community, we have developed a process from scratch and are now sharing the key learnings, with the hope that this information will be useful to retailers.

From page to prompt

The podcasting process at IADS begins with a clear editorial strategy: repurpose written content into audio dialogue that feels conversational rather than read. The first step involves using tools like Dust.tt to convert editorial pieces into a back-and-forth format, assigning roles and simulating a casual rapport between two hosts. Prompts are crafted not just to summarise content, but to inject realism—pauses, clarifications, side comments—that mimic natural speech. Human editors then refine the AI-generated draft to improve clarity and flow, preserve the core insight while removing any robotic inflexion or repetition. This is the first checkpoint where editorial sensibility meets automation.

In the early stages of development, several AI platforms were tested. Tools like Google’s NotebookLM, then still in beta, showed promise in converting written materials into podcast-ready dialogue. However, its automated scripting often lacked editorial precision, reordering ideas or inserting speculative commentary that strayed from the intended narrative. For IADS, having 100% control over what was said and how it was said was critical. This prompted a broader search and trial of platforms including Podcastle, Play.ht, and Murf.ai. While many offered high-quality voice options and intuitive features, few provided the level of script fidelity and voice customisation required to simulate truly editorialised dialogue. The takeaway: no single tool could meet every need. Instead, IADS developed a modular system that combined best-in-class AI capabilities with human oversight at each stage.

This process wasn’t just about finding the most advanced tool; it was about identifying the right fit. IADS needed a system that supported scripted conversations with editorial control, a familiar vocal presence, and the flexibility to iterate quickly. The human editing team remained central throughout, shaping scripts, correcting tone, and aligning each segment with the voice of the original piece. The result is a format that scales efficiently while preserving nuance, intention, and warmth.

Vocal authenticity through AI

Once the script is finalised, it moves to voicing. Using platforms like Speechify, cloned voice profiles for regular hosts read the scripts aloud. These voices have been trained on their real speaking styles, enabling a more personal and recognisable listening experience. Adjustments to tempo, pitch, or emotional emphasis are manually applied where needed to reflect the appropriate tone.

Particular care is taken with pronunciation, especially with brand names or geographic references such as "Printemps" or "Monoprix." Editors will often use phonetic spelling or AI-specific markup to ensure accuracy. The acronym "I.A.D.S" is also spelt out, never read as a word, to maintain consistency and clarity.

Editing, packaging, and distribution

The final audio file is edited in tools like Audacity, where sound levels are adjusted, music bumpers are added, and segments are stitched together to create a seamless flow. Intro and outro jingles—short, branded audio cues—bookend each episode.

Episodes are distributed through a multi-platform strategy. They are hosted on Substack (which doubles as a transcript archive) and repurposed for YouTube and internal platforms. This distribution model allows IADS to reach listeners where they already are, whether browsing podcast platforms or catching up on content via email.

The entire pipeline—from drafting to final publication—can be completed in under a day. This allows IADS to respond to new developments or highlight stories quickly, reinforcing its value as a real-time knowledge partner.

Human-centric AI and the sound of storytelling

AI simulating human rapport

One of the key innovations powering the IADS Retail Park is its ability to simulate the nuances of human conversation through generative AI. Traditional AI-generated content often sounds either overly scripted or unnervingly robotic. IADS addressed this challenge by developing agent-style dialogue structures that incorporate elements of natural interaction, including interruptions, clarifying questions, and expressions of curiosity. This approach builds on recent advances in large language models, which now simulate not only coherent dialogue but also context-aware personas. These agents mimic not only human speech but also interpersonal dynamics, creating a sense of shared understanding.

This aligns with research from Stanford HAI showing that generative agents can replicate real-world answers with 85% accuracy, and with Auxiliobits’ findings that “unstructured data gathered from social media interactions” supports AI systems in learning emotional context and decision heuristics. This isn’t mimicry, it can be, though, out of operational empathy. To maintain trust and coherence, every episode undergoes a three-step loop: content grounding using memory modules, dialogue naturalisation with conversational pacing, and listener persona simulation to test clarity and emotional tone. Only when each layer passes do hosts go to voice, with phonetic disambiguation added for complex names.

Cloning voices, not people

The voices featured in each episode are not chosen randomly. They are based on real people who work at IADS, like Maya or Anchita, but enhanced by cloned voice models. These profiles are created through ethical voice training, with complete transparency and approval. This cloning allows for consistency across episodes while also maintaining a personal touch. Now, contributors whose voices are cloned opt in through recorded samples and are kept informed of how their voice models are used.

It’s important to note that these voices aren’t static. Human editors adjust pitch, cadence, and pauses based on the episode’s tone. Whether it’s a light-hearted commentary or a serious policy review, the sound is tailored to fit. In doing so, IADS avoids the uncanny valley of synthetic speech and instead delivers something closer to radio journalism.

This level of sonic authenticity helps overcome a barrier in AI adoption, listener trust. When a podcast sounds warm and familiar, it becomes easier to accept that it’s AI-assisted, not AI-imposed.

Designing for emotional intimacy

The strength of podcasting lies not only in what is said, but in how it’s felt. At IADS, this emotional resonance is deliberately designed. Dialogue is scripted to feel conversational, familiar, human, and unscripted, using templates that encourage back-and-forth exchanges. Host 1 might respond to Host 2’s point before moving to the next question, while Host 2 offers brief reflections before answering. These moments create the rhythm of a real conversation. To support this tone, reusable scripting templates were developed to guide structure and phrasing. Editors asked prompts like: “Can Host 1 relate to what was just said?” or “Can we replace robotic affirmations like ‘Absolutely’ with more natural responses?” Pauses were added manually (e.g., [pause 0.25s]) to simulate human timing and improve flow.

AI-cloned voices were refined through repeated editing to improve pronunciation and tone. Tools like Perplexity and Grammarly helped rewrite scripts to sound more like natural speech. Voice outputs were regenerated up to three times per segment to fix mispronunciations or flatten robotic inflexion. Phonetic spellings were often used to ensure clarity for names and non-English words. This wasn’t just about getting the script “right.” It was about crafting something that felt warm, relatable, and thoughtful. The result isn’t artificial realism—it’s a listening experience that feels intentional and human, even when powered by AI. This approach is supported by growing research showing that emotionally resonant media improves retention and can drive behavioural change.

What this means for retailers

Retailers as publishers

The learnings made along the IADS Retail Park development journey offers some insights for retailers looking to explore audio content. At its core, the model positions the retailer not just as a merchant but as a media entity. Any brand that generates insight—be it in customer experience, sustainability, or product design—can turn those ideas into episodes. These aren’t promotional ads; they’re value-driven conversations.

Retailers can easily turn employee onboarding guides, product explainers, or executive interviews into digestible podcast episodes. These can be distributed internally for training or externally to bolster thought leadership. Furthermore, with AI tools automating most of the pipeline, the barrier to entry is significantly reduced. Retailers should ask themselves: what insights are trapped in decks or reports that could live more vibrantly in a voice?

Generative AI now enables role-specific audio content on demand. Weekly voice briefings for merchandisers or planners, tailored by region or function, are already in use. These human-like segments bridge the gap between leadership and frontline teams, delivering updates in a way that feels natural and intuitive.

Starting small, learning fast

What sets IADS apart is not just the outcome but the approach. The Retail Park podcast was born as an experiment, refined in public, and improved with feedback. Pronunciation issues, pacing oddities, and tonal misfires were addressed not with overhauls but iterations.

This agile development approach, more familiar in the tech sector than in retail, allowed IADS to refine its content engine continuously. Retailers exploring similar projects need not fear imperfection. The key is to start with a manageable scope, such as one series, one team, or one story.

Over time, these pilots can evolve into full-fledged audio programs. With AI doing the heavy lifting and editors steering tone and intent, the process becomes less about production muscle and more about editorial vision. Ultimately, retailers that adopt a test-and-learn mindset—focusing on utility, authenticity, and speed—will find that audio isn’t just a trend. It’s a new layer of brand presence.

What IADS has accomplished with Retail Park is not simply a creative experiment—it’s a signal of what’s possible when legacy institutions embrace emerging technology without losing sight of human connection. This project proves that audio can be more than entertainment or marketing filler. It can serve as an operational tool, a cultural artefact, a knowledge vehicle, and, above all, a strategic asset.

For retailers, the message is clear: you don’t need a recording studio to sound present, or a celebrity voice to sound human. You need clarity of purpose, a willingness to prototype, and the right blend of AI and editorial input to turn your everyday ideas into experiences that travel. Whether you’re onboarding seasonal staff, communicating sustainability goals, or simply reinforcing company values, audio, especially when assisted by generative AI, offers unmatched speed, reach, and relatability.

So if you’re in retail and wondering what the future of brand communication sounds like, don’t just imagine it. With summer knocking at your door, let the  IADS Retail Park join you —whether you’re poolside, in transit, or recharging between meetings. Pop in your headphones and catch up on smart, surprising retail stories that travel as well as you do.(Available now on Apple Podcast, Spotify, Substack, and Youtube)

Credits: IADS (Maya Sankoh)

PRINTABLE VERSION HERE

Check out the photos of Three Tokyo Stores

Japan's retail performance has been buoyant in recent quarters, driven by rising wages, strong inbound tourism (especially from China), a competitive currency making prices attractive, and ongoing digital transformation.

Total retail sales peaked at 15.6 trillion yen in December 2023 (USD 105.6bn), then reached 14.2 trillion yen in November 2024 (USD 96bn), and 14.06 trillion yen in March 2025 (USD 85.5bn), indicating performance is cooling. However, Q1 2025 still grew year-over-year (+2.9%) and quarter-over-quarter (+1.5%). Overall growth is expected to moderate, with projections of 1.6% to 1.8% YoY for 2026 to 2027.

Japan’s luxury retail market is flourishing. The luxury goods market was estimated at USD 34.9 billion in 2024, with a projected compound annual growth rate (CAGR) of 4.42% through 2033. The luxury fashion segment alone was valued at USD 6.5 billion in 2024 and is expected to reach USD 10.7 billion by 2033, marking a CAGR of 5.3%. Tokyo, particularly the Ginza and Shinjuku districts, saw a surge in luxury flagship store openings: 24% of all new openings in 2024, up from 20% in 2022.

The IADS had the opportunity to visit Tokyo and review the iconic Isetan Shinjuku and the Ginza Six mall. Another standout location during the visit was Parco Shibuya. Below is a review of these store visits, focusing on how Japan animates stores by playing with adjacencies and brand associations.

Navigating Ginza, Shibuya and Shinjuku areas and their differences

Shinjuku is a major business and entertainment district, home to numerous skyscrapers and the world’s busiest railway station (3.6 million passengers daily). The area offers a variety of shopping options, from luxury department stores like Isetan, Odakyu, and Keio to electronics retailers such as BicCamera and Yodobashi Camera. Shinjuku’s entertainment district, Kabukicho, is one of Japan’s largest, with a concentration of bars, clubs, karaoke venues, pachinko parlours, and themed establishments. The district also includes drinking alleys like Omoide Yokocho and Golden Gai and Ni-chome, known for its LGBTQ-friendly venues.

Ginza, Tokyo’s historic upscale shopping district, is characterised by wide streets lined with flagship stores, luxury boutiques, and department stores such as Mitsukoshi, Matsuya, and Ginza Wako, along with upscale malls like Ginza Six and Tokyu Plaza. Beyond retail, Ginza is known for art exhibitions and cultural events, supported by a concentration of art galleries, boutique shops, and high-end dining establishments, including bistros and tea salons.

Shibuya is regarded as the centre of youth culture, fashion, and entertainment in Tokyo. In addition to landmarks such as the Shibuya Scramble Crossing, it features a wide array of retail spaces: department stores (Seibu, Takashimaya), malls (Shibuya 109, Parco), and shopping streets (Center-gai, Cat Street) popular for youth-oriented fashion and novelty shops. The area is also known for its nightlife, including large clubs, bars, karaoke venues, game centres, and live music spots. Shibuya is a focal point for contemporary pop culture and trends, attracting local and international visitors.

Visiting Isetan Shinjuku, Japan's premier department store

Historical insights: from a kimono shop to a department store chain

Isetan’s history begins in 1886, when “Iseya Tanji Drapery”, a kimono shop, opened in Tokyo’s Kanda district. In 1907, seeking to modernise its image, the store’s name was simplified to “Isetan Drapery”, combining the first two syllables of “Iseya” with the first syllable of the founder’s name, “Tanji”. The original Kanda store was destroyed in the 1923 Great Kanto Earthquake. It re-opened the following year, expanding its merchandise beyond kimonos to include children’s clothes, toys, cosmetics, household goods, and food, effectively becoming a department store. In 1928, the owners recognised that Kanda was no longer the optimal location, leading to the decision to relocate.

After considering other locations, Tanji Kosuge II (the founder’s son-in-law) chose Shinjuku. The area had begun developing after the opening of Shinjuku Station in 1875 and experienced significant growth following the earthquake. The Shinjuku flagship store opened in 1933, in a then state-of-the-art steel-reinforced concrete building featuring Art Deco elements. Shortly afterwards, the company was formally incorporated as Isetan Company Ltd. and began expanding within Japan and overseas, including in Singapore (1972), Malaysia (1990), China (1993), and other locations since closed. In 2008, the company merged with Mitsukoshi under a joint holding company called Isetan Mitsukoshi Holdings Ltd., creating Japan’s largest department store group, representing a 6 trillion yen business.

The Isetan Shinjuku Main Store is the group’s flagship and top performer. In the financial year 2023 (ended March 2024), the store recorded sales of 375.8 billion yen (USD 2.3 billion), representing a 14.7% year-on-year increase and far exceeding the pre-COVID ten-year average of 254.2 billion yen. The upward trajectory continued in 2024: Isetan Shinjuku surpassed 400 billion yen in sales (USD 2.43 billion) for the first time. The flagship is one of Japan’s most influential department stores, often the first to showcase new trends and products. The store comprises two interconnected buildings: the nine-floor Main Building facing Shinjuku Street (from - 2 to +7) and the Men’s Building opposite, also with nine floorsi (from -1 to +8). The proximity to Shinjuku station (including direct access to the stores) enables the store to attract considerable footfall.

Visiting the Main Building 

While Japan has long been perceived as slow to adapt to international clientele, much has changed at Isetan. Visitors are now invited to use a QR code to download the store map onto their mobile phones via the free Wi-Fi connection, while dedicated screens allow them to purchase and arrange shopping delivery. At the time of the visit, foreign customers could use these screens to pay in euros, US dollars, and pounds sterling, although the Chinese yuan was unavailable. Notably, tax-free sales at the store increased by 67.7% in 2024.

The basement levels offer a diverse range of experiences. Level -1 houses a gourmet store and food court, which, shortly after opening, attracted considerable footfall during the visit. Nationally reputed as a “gourmet paradise”, this area allows visitors to experience the full spectrum of Japanese culinary culture. Notably, the department transforms throughout the day, creating vibrancy and an atmosphere reminiscent of a food festival. Each dish prominently displays calorie information, and the confectionery is artfully presented as cosmetics. Audio advertisements are played in Japanese and Chinese. On level -2, the beauty apothecary focuses on wellness brands such as Aveda, offering skincare, haircare, and body treatments in a health-oriented environment, including food supplements (10% of the floor).

The -2 level is peculiar: it does not have the same size and surface than the -1 level, and for that reason, all escalators going downstairs from the ground floor do not lead to -2, which can be a challenge for customers looking specifically for this category, as they will have to find the right escalators in the food court. Also, it is quite surprising to see that Isetan has made the decision to spread the cosmetics category on three level, as, in addition to the -2 display, cosmetics are also available on ground floor and first floor, which suggests that the Japanese cosmetics market is highly segmented with extremely different types of customers.

On the ground floor, the fine jewellery section is displayed in standard furnishings with brand reminders. Similarly, the eyewear section is fully built to Isetan’s concept; each brand has a standard brand marker. To the left, a sophisticated perfume and cosmetics area features semi-personalised points of sale from brands such as Byredo and Jo Malone, with central cash desks enhancing accessibility. The accessories zone, with brands like Saint Laurent, reinforces the luxury atmosphere, as most labels are presented in corners with discreet signage.

Two multi-brand locations (Chance Encounter and Isetan Seed) on this floor testify to the strong footfall. They offer accessible and reasonably priced products: textile accessories, home perfumes, incense, costume jewellery, and umbrellas. It is noteworthy that these categories, also found on the upper floors, are displayed near the entrance to encourage impulse purchases.

Ascending to the first floor, the focus is on women’s fashion, shoes, and accessories, complemented by a newly revamped Isetan beauty zone (refurbished in 2019). This floor is characterised by its bright, fresh, and brand-focused layout, with seating provided in every area. The make-up space features over 30 make-up brands, including an artist make-up zone where customers can receive personalised lessons and services from professional make-up artists representing 11 different brands. The cosmetics area showcases numerous Japanese brands, from the historic Shiseido to environmentally conscious newcomers such as Shiro.

The fashion area is understated in its branding, displaying a cohesive concept for the contemporary segment, including labels such as Westwood, Red Valentino, and Onitsuka, cleverly located alongside a café, The Stand, offering granola and juice, and a champagne bar, the Stand. The Japanese fashion section is articulated with a jewellery stand, facing a Dior Backstage and Louboutin make-up area. Each section is interconnected: fashion leads to shoes (from bespoke to trainers, and including a repair bar), and shoes lead to cosmetics. A fashion space, Isetan The Space, and a sizeable Astier de Villatte stand, complete this extensive offering, encouraging browsing and discovery.

The second floor specialises in luxury, young brands, women’s lingerie, and plus-size fashion, with a concept that blends brand-specific peripheries with central Isetan branding. The lingerie section is particularly effective, with dedicated mirrors, flooring, and lighting. A central space showcases emerging brands and curated collections, including Ganni and Victoria Beckham. An ultra-luxury zone presents various categories, including accessories, in a highly constructed and scenographic layout, while a smaller area behind features brands such as Mackintosh and Polo, leading through a tunnel to the Isetan men’s section and a café.

On the third floor, the emphasis is on formal wear and jewellery, with a unified concept for brands such as Theory Luxe, Icicle, Herno, and Yohji Yamamoto. An Isetan Select pop-up with a T-shirt brand adds a casual contrast. The formal section is meticulously detailed, encouraging customer engagement. Adjacent is the Michelin-starred restaurant Jacques Borie, near Chanel, offering a refined dining experience. Goyard and Chanel shoes, along with a selection of luxury shoes and accessories, are prominently featured. A second-hand space, Re-Style, is also included.

The fourth floor, dedicated to home goods, includes a sleep concierge service. The fifth floor caters to children, providing services such as gift stations, cafés, and juice bars. There is a central toy area and dedicated service zones for pushchairs with seating. The children’s fashion area is treated with the same sophistication as adult 1 This is the largest sales floor area in Asia dedicated exclusively to men's products. fashion, eschewing childish themes for a more concept-driven approach. The sixth floor integrates restaurants with traditional Japanese kimonos and optical offerings.

Each floor of Isetan is designed to offer a unique identity. However, floor segmentation and brand adjacencies are distinctive and quite different from standard practices in department stores worldwide.

Visiting the Men’s store

Thanks to its size and breadth of assortment, the men’s building is a true differentiator for the Isetan Shinjuku store. It has become a destination in its own right for fashion-conscious male shoppers from Japan and abroad.

The basement, which features shoes, luggage, and underwear alongside a Tomorrowland display gallery, connects directly with the gourmet section of the Main Building. The footwear department offers a wide range of styles in a generic layout, except Church and Weston, which have beautifully designed, dedicated concept spaces.

On the ground floor, the focus is on cosmetics, perfumes, small leather goods, hats, jewellery, and pop-up sections. The space is not limited to accessories; it includes another Tomorrowland gallery and an Ambush corner.

Ascending to the first floor, the emphasis shifts to men’s creators, where a vast Balenciaga space dominates the area near the escalator. Comme des Garçons also features a specialised concept. The remainder of the floor is occupied by more generic offerings from brands such as Thom Browne, Ann Demeulemeester, Versace, Balmain, and Acne Studios, in contrast to the women’s segmentation, which highlights Yohji Yamamoto, Undercover, and Rick Owens as ultra-fashion labels.

The second floor is dedicated to men’s designers, featuring high-end labels such as Celine, Jil Sander, Saint Laurent, Gucci, Givenchy, Dolce & Gabbana, Bottega Veneta, Dior, and Prada. The men’s building maintains a more homogeneous concept throughout, ensuring a consistent luxury experience, compared to the Main Store, which is more diverse.

On the third floor, luxury takes centre stage with immersive concepts, though the overall layout remains generic. Brands such as Fendi, Loewe, Berluti, Armani, Louboutin, Tom Ford, Zegna, Brioni, Brunello Cucinelli, and Dunhill occupy substantial spaces.

The fourth floor blends made-to-measure and formal wear, resembling a classic department store layout but with a clear focus on tailoring and materials. The formal section includes suits and smart-casual offerings (shortsleeve shirts, polos, and T-shirts).

Contemporary fashion is found on the fifth floor, with brands like Kenzo, APC, and Ami Paris presented without a specific overarching concept, particularly in the denim section. Despite the presence of trendy labels like Bathing Ape and Maison Kitsuné, the presentation places little emphasis on the brands themselves.

The sixth floor is dedicated to Polo, Brooks Brothers, Mackintosh, and Joseph Abboud, alongside Japanese-licensed and contemporary brands such as Boss, Tomorrow, Joseph, and Theory.

Finally, the seventh floor, known as “the residence”, offers an eclectic mix of ready-to-wear, accessories, writing instruments, and Santa Maria Novella products. The floor also includes a restaurant, flowers, eyewear with an outstanding concept, and home goods.

What to think of Isetan Shinjuku?

Isetan Shinjuku illustrates why it is considered Japan’s benchmark department store: meticulous visual presentation, comprehensive service at every touchpoint, and a merchandise mix that reflects the upper tier of global luxury. Notably, on every floor in both buildings, knowledgeable staff provide attentive service, from product selection to styling advice, including in English.

However, the arrangement of these elements can be unexpected for overseas visitors. Categories typically consolidated elsewhere—such as beauty, accessories, or children’s goods—are spread across multiple levels, and labels that compete in other markets often sit side by side without distinct hard-shop environments. This unconventional sequencing reflects two factors. First, Japanese shoppers are comfortable navigating vertical retail; logical adjacencies are less critical than curating a themed experience on each floor. Second, Isetan actively uses its layout to encourage discovery, treating circulation paths as part of the offer rather than simply a means to reach it.

As a result, the format can feel disorienting to visitors accustomed to Western department-store zoning. Yet it also highlights Isetan’s particular strength: translating global brands into a retail vocabulary that resonates locally, while still driving high productivity.

Visiting Ginza Six, Tokyo’s luxury hub

A luxury mall in lieu of the first Ginza department store

Ginza Six, a joint venture by Mori Building Company, J. Front Retailing, Sumitomo Corporation, and L Catterton Real Estate, is a shopping complex in Ginza 6-chome, which opened in 2017. The site holds historical significance, as the Matsuzakaya department store previously occupied itii . However, the redevelopment went far beyond repurposing the former store: the project spans two blocks, with a 115-metre-long frontage that allows six brands significant exposure on Ginza. Each contributes a distinctive façade, reshaping the Ginza skyline—some stores even span six floors. The building rises 56 metres and comprises 18 floors (including six basement levels), with approximately 148,700 square meters of floor space.

Alongside its 47,000 sqm of retail space (home to 241 stores), this mixed-use development features Tokyo’s largest office spaces across six floors, 24 dining establishments, a banquet hall, a 480-seat Noh Theatre, and a 4,000 square-meter rooftop garden. The complex provides facilities catering to tourists, including a bus terminal, currency exchange services, duty-free shopping, and multilingual concierge support.

In terms of market performance, Ginza Six has attracted a diverse range of visitors: in its first year, the complex welcomed around 20 million people, with a demographics from 20 to 60 and an even gender split. From the outset, Ginza Six targeted premium customers, offering premium lounges, valet parking (a first for Ginza), and cultural programmes. This strategy has paid off, with a customer base comprising affluent Japanese and international tourists.

The mall’s success is partly driven by its flagship store strategy: 130 brands operate their most spectacular Japanese stores in Ginza Six, ensuring sustained footfall. In addition, management ensures the complex remains relevant and appealing through a strategy of freshness and tenant rotation, with fixed-term leases allowing approximately 40% of stores to be refreshed over a six-year period.

Visiting Ginza Six 

Within the mall, the customer journey is layered and engaging, thanks to a skilfully curated mix of established luxury brands and emerging fashion and lifestyle concepts, all while ensuring footfall is channelled throughout the building.

As expected, the ground floor serves as the gateway to luxury cosmetics and accessories, with brands such as Saint Laurent and Loewe surrounding a vast atrium dedicated to pop-ups and seasonal events. Interestingly, Rolex and Jaeger-LeCoultre also have stores here, despite the fourth floor being devoted to watches and jewellery. While all brands on the ground floor are in the luxury segment, it is notable that they are not spatially segregated; fashion houses sit alongside watchmakers. This eclecticism is apparent across all floors.

The first floor is dedicated to luxury brands, including Dolce & Gabbana, Givenchy, Chaumet, Cartier, Delvaux, Clergerie, and Gucci. It offers a concentrated luxury shopping experience—again, mixing all categories within a single journey.

On the second floor, the emphasis remains on fashion, with a broad selection of international brands. Valentino is prominently featured in a double-height store, alongside Lucien Pellat-Finet, AMI Paris, and Patou.

The third floor transitions towards fashion and lifestyle, with brands such as Margaret Howell, Theory, and Lululemon, alongside high-fashion names like the upper level of Valentino, Helen Kaminsky (hats), Petit Bateau, and United Nude. The fashion multibrand store Parigot features Stella McCartney and Isabel Marant Étoile. Another concept store, Cibone, integrates lifestyle products and Japanese art.

Segmentation becomes even less defined on the fourth, fifth, and sixth floors, with a mix of Breitling watches, Lanvin Collection fashion, home furnishings by Bo Concept, and hi-fi from Devialet. These floors also showcase Leica cameras, Diesel apparel, a broad selection of handbags and bathing accessories, and an extensive range of golf brands. A Tsutaya bookshop occupies a large area on the sixth floor. The seventh floor is home to restaurants.

How Ginza Six is different from other malls? 

Ginza Six was conceived as a “vertical boulevard”, where circulation emulates a stroll along Chūō-dōri rather than a conventional ascent through stacked floors. A six-storey atrium, uninterrupted sight-lines of approximately 35 metres, and escalator banks positioned at opposite ends of the void require visitors to move laterally across each level before ascending or descending. Heat-map data released by the operator in 2023 show that average dwell time per floor exceeds seven minutes—two minutes longer than in comparable Tokyo malls. This confirms that, here also, the design succeeds in extending horizontal browsing behaviour into a vertical format.

Because the traffic pattern is deliberately non-hierarchical, pricing and brand prestige are distributed rather than tiered. Luxury flagships such as Saint Laurent, Cartier, and Rolex share ground-floor frontage with lifestyle labels like Lululemon; on the upper floors, Breitling watches, Lanvin Collection apparel, and Devialet audio equipment are adjacent to golf brands and a Tsutaya book lounge. Leases are allocated so that at least 30 per cent of units on every retail level fall outside the dominant price segment for that floor (a policy confirmed by Mori Building’s leasing brief). The result is a controlled form of category adjacency: shoppers entering for mid-market goods are routinely exposed to high-end names, and vice versa, without the psychological threshold created by traditional “luxury floors”. Footfall conversion studies conducted during the 2022 Golden Week period indicate that 18% of customers who began their visit in lifestyle or sports tenants transacted in luxury boutiques on the same trip. This illustrates how vertical flow and mixed merchandising combine to broaden the luxury customer base while maintaining brand exclusivity.

Visiting Parco Shibuya, a new generation urban catalyst

A lifestyle company from its roots

Over seven decades, Parco has repeatedly leveraged three core capabilities—urban real-estate development, cultural curation, and design-driven marketing—to stay ahead of consumer shifts. Its corporate origins trace back to Ikebukuro Station Building Co., Ltd., established in 1953 to operate a railway-adjacent shopping facility in northwest Tokyo. A year later, the company pivoted from landlord to retailer, rebranding the site as Tokyo Marubutsu, a department store aimed at the mass-market commuter trade. The store operated until 1969, before closing to reopen as Ikebukuro PARCO: a multi-tenant “young adults’ shopping centre” conceived by Seibu Department Stores, then Parco’s parent company.

The PARCO format combined fashion tenants with gallery space, live performance venues, and provocative avant-garde advertising campaigns directed by art director Eiko Ishiokaiii . Expansion followed in Japan—Sapporo (1975), Kichijoji (1980), Shibuya (1981)—and internationally with a Singapore location in 1991. The company diversified by launching a credit card in 1989, a side-business incubator in 2002, and a digital marketing company in 2017.

Facing e-commerce headwinds and ageing flagships, Parco demolished the original Shibuya store in 2016, replacing it in 2019 with a ¥65 billion mixed-use tower (USD 437 million) comprising retail, theatre, and co-working floors. A month after this opening, J. Front Retailingiv made a tender offer to acquire all of Parco’s shares, making it a wholly owned subsidiary and the group’s specialist for youth-oriented urban malls. This integration enabled Parco to co-develop credit, omnichannel, and real-estate projects—most recently, the rollout of Zero Gate and mini-PARCO formats in secondary Japanese cities—while giving JFR exposure to a demographic its legacy department stores underserve, by treating retail as a social platform first and a merchandising venue second.

Visiting Shibuya Parco 

The Shibuya store is a mixed-use retail complex where consumption, culture, and technology converge within a building that is itself a piece of urban infrastructure. While the original store incubated a generation of designers, musicians, and artists, its second iteration, opened in 2019, quickly re-established itself as the gravitational centre of Shibuya’s fashion and creative economy.

The tower offers 64,000 square meters of gross floor area across nineteen floors above ground and three below. Retail occupies basement level 1 through to the eighth floor and part of the tenth; the ninth floor is dedicated to “PARCO Studio”, a flexible production and co-working space for fashion and entertainment start-ups. Circulation within the retail space is engineered around an outdoor, spiralling path that stitches the street to every retail level, allowing shoppers to move fluidly between the building and the neighbourhood. Beyond aesthetics, the structure incorporates seismic dampers, on-site emergency supplies, bicycle parking, and energy management systems designed to reduce lifetime CO₂ emissions.

Financially, Shibuya PARCO is one of four “key stores” (the others are Ikebukuro, Nagoya, and Shinsaibashi) earmarked for accelerated investment under the group’s 2024–2026 medium-term plan. The rationale is straightforward: the property delivers higher average sales per square meter than legacy suburban sites, benefits from a dense tourist catchment—Shibuya Station handles more than three million passengers a day—and provides a live laboratory for concepts that can later be rolled out to smaller community malls. Since reopening, the store has consistently outperformed internal KPIs for tenant revenue and footfall, with inbound duty-free sales rebounding strongly as border restrictions eased.

Merchandising follows a borderless, ageless, and genderless creed. The approximately 180 tenants range from Japanese avant-garde labels and luxury-street hybrids to pop-culture anchors such as Nintendo TOKYO (the brand’s first official store worldwide) and the expanded PARCO Theatre, which hosts live performances and film premieres. For example, Paris Saint Germain faces Japanese avant-garde brand Anrealage and phone accessories label Casetify, creating excitement and surprise. This deliberately eclectic mix is designed to attract customers who prioritise novelty and experience over traditional demographic cues, and has proved effective in sustaining shopper traffic throughout the week rather than concentrating it at weekends.

Digital infrastructure amplifies the experiential layer. In-store analytics, dynamic signage, and a proprietary smartphone app feed data back to both tenants and Parco’s central CRM platform, enabling managers to finetune layouts and events in near real time. These capabilities were showcased in 2023, when Parco launched a dedicated Gaming Business Department and partnered with content studio XENOZ to stage e-sports tournaments and game-themed exhibitions; floor sales and ticket revenues spiked, but just as importantly, the initiatives drew Gen Z consumers who now cross-shop fashion, food, and entertainment within the same visit.

In the basement, known as "Chaos Kitchen", visitors encounter a variety of food options alongside unique retail offerings. This area includes a sports card game shop positioned between a sushi belt conveyor and a craft beer bar, and a CD shop located between an insect-based restaurant and a fried pork specialist—offering an eclectic mix of dining and shopping opportunities.

A range of luxury brands on the ground floor present unique retail concepts. Shoppers can explore a Gucci arcade room and visit specialised stores like Dior Beauty and Hermès in colours, along with a florist.

The first floor, themed "Mode and Art", features fashion labels such as Marc Jacobs and Ami Paris, alongside avant-garde brands like Undercover and fragrance label Byredo. With additional offerings like Margiela Replica fragrances and an Officine Buly stand, the floor also houses art galleries, blending fashion with art.

The second floor, labelled "Advanced Contemporary", showcases an eclectic mix of boutiques, including Santa Maria Novella, MM6, Kolor, Ganni, Anrealage, and Paul Smith.

On the third floor, called "Fashion Apartment", visitors find the Parco Museum and a variety of Japanese brands, from the well-known Zucca to the lesser-known Kaneko Gankyoten optical frames.

The fourth floor, branded as the "Parco Outdoor Park", includes popular outlets such as Starbucks, Nordisk Camp supply store, Timberland, and Condomania, alongside a service counter.

The fifth floor, "Cyberspace Shibuya", is a treasure trove for gaming enthusiasts and pop culture fans, featuring the Pokémon Center, Nintendo, Capcom Store, and Godzilla Store.

The sixth floor hosts a diverse food court with seven restaurants, while the seventh floor offers theatrical and cinematic experiences. There is a public stage on the eighth floor, and the ninth floor is dedicated to production and co-working space.

What makes Parco Shibuya so special

Shibuya PARCO closes the loop between cultural programming and commercial performance. Management refreshes roughly a tenth of the tenant line-up each year, pairs long-term anchors (such as Nintendo and PARCO Theatre) with time-limited pop-ups, and monitors the impact using store-wide traffic sensors and CRM data. The result is a sales-per-square-meter figure well above the average for PARCO's urban stores, alongside consistently high occupancy and dwell-time indicators, as disclosed in the company’s FY2023 materials.

Maintaining this level of “controlled churn” while preserving a coherent identity requires capabilities that remain uncommon in global retail: a leasing team able to balance avant-garde labels with mainstream attractions, an inhouse events unit that can turn an e-sports tournament into incremental fashion spend, and an analytics platform robust enough to translate soft cultural signals into hard operational decisions. Shibuya PARCO demonstrates that when these elements are in place, culture becomes a quantifiable asset and continuous reinvention a repeatable—though rarely replicated—competitive skill.

Tokyo’s three headline stores—Isetan Shinjuku, Ginza Six, and Shibuya Parco—are frequently praised for their record sales, enviable footfall, and visual flair. Yet their true breakthrough runs deeper: each demonstrates that the most powerful floor plan is no longer a map of neat, product-based zones, but a sequence of curated encounters that deliberately scramble categories and price points. Isetan disperses beauty across three levels, Ginza Six mingles Rolex with Lululemon, and Parco juxtaposes Nintendo with avant-garde fashion and a craftbeer bar. This calculated eclecticism transforms vertical circulation into a discovery engine, keeping shoppers moving—and spending—far longer than orthodox layouts ever did.

Crucially, the curiosity these pairings spark is monetised, not merely romanticised. Michelin-star dining, atrium installations, and e-sports tournaments all turn “experience minutes” into incremental sales, pushing revenue per square metre well above historic benchmarks. Experience is no longer a halo around the merchandise; it is merchandise.

Yet the three stores prove there is more than one way to sustain such performance. Parco’s 10% annual tenant refresh relies on perpetual novelty, while Isetan’s century-old prestige floors trade on institutional trust. Both succeed because each has a clear, disciplined stance on how much to churn versus how much to preserve.

In short, Tokyo’s flagships point to a post-zoning future for department stores: one where curated surprise replaces rigid adjacencies, where experience has a measurable P&L line, and where either controlled churn or heritage stability can win—provided the choice is strategic.

i: This is the largest sales floor area in Asia dedicated exclusively to men's products.

ii : Matsuzakaya was the first department store to open in Ginza in 1924. It famously was the first retail location in the country to allow customers to enter all floors with their shoes on (so far, customers were requested to remove them and wear slippers).

iii: Ishioka is also known for designing Olympic uniforms for the 2002 Salt Lake City and 2008 Beijing games, in addition to winning an Academy Award for her work in Francis Ford Coppola’s Dracula movie.

iv: Owner of Daimaru-Matsuzakaya.

Credits: IADS (Selvane Mohandas du Ménil)

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The IADS attended the 2025 VivaTech conference in Paris to spot interesting startups and key technology trends relevant to the retail sector for our members. This year, the conference welcomed over 14,000 startups, 180,000 attendees and 3,600 investors. Being Europe’s largest start-up and tech event, VivaTech connects startups, technology leaders, large companies and investors.

At VivaTech 2025, Jensen Huang, co-founder and CEO of the semiconductor company NVIDIA, emphasised the necessity of digital sovereignty for countries and companies alike in his keynote speech. With AI technology driving results and becoming increasingly central to firms’ operations regardless of sector, NVIDIA announced collaborations with beauty conglomerate L’Oréal Group and French startup MistralAI.

Addressing a wide range of tech topics, spanning mobility, retail, defence, climate and finance, among others, startups and established companies provided a comprehensive overview of the key issues in the technology space across sectors. Two takeaways were clear:

-    Every company is looking at enhancing its AI and technology usage as a performance driver in real terms.

-    The significance of technological self-sufficiency was highlighted throughout various talks at the conference.

Digital sovereignty: What does it mean for retail?

Jensen Huang accounted NVIDIA's transformation from a PC-era chip company to an AI industry leader: starting in 1993 during the Windows 3.1 era, the company capitalised on the unique horizontal structure of the PC industry, which separated chip makers from system manufacturers and software developers. This structure, unprecedented in the history of the computer industry, enabled NVIDIA to establish itself as a chip company building sophisticated computing solutions. The company's journey from graphics, physics simulation, to eventually AI highlights the significance of constant innovation and adaptation to fill new gaps. Huang’s leadership philosophy, of setting modest expectations while maintaining rigorous work standards, has enabled NVIDIA’s evolution from gaming graphics to positioning the company at the forefront of the AI revolution.

Huang’s keynote at VivaTech 2025 underscored digital sovereignty as an urgent strategic priority for both nations and businesses in the age of artificial intelligence (i), warning that outsourcing core digital infrastructure risks losing control over economic competitiveness and security. A concept uncommon among big tech companies, yet gaining traction among early-moving startups in the tech sector, digital sovereignty refers to businesses independently controlling and protecting their digital assets according to their own rules. With tighter regulations, such as GDPR, the growing use of AI, and localisation demands, companies must manage their digital assets to comply, avoid penalties, and reduce their reliance on foreign providers. This strengthens resilience against supply chain and political risks, while robust data governance gives businesses a competitive edge as data security becomes a customer priority.

This message resonates powerfully in the retail sector, where the rapid growth of online transactions and the handling of sensitive customer data make comprehensive data management essential. Digital sovereignty is vital as digital transformation accelerates and most transactions move online. Retailers handle large volumes of sensitive data and face frequent cyberattacks. Controlling data storage and processing helps retailers comply with laws, avoid fines, and adapt quickly to market changes. Reducing reliance on external vendors builds trust, loyalty, and a competitive advantage in privacy-conscious markets, making digital sovereignty a strategic necessity for innovation and long-term success. L’Oréal Group’s partnership with NVIDIA, utilising its AI Enterprise platform for the rapid development and deployment of AI, announced at the event, showcases how companies are internalising these processes to maximise impact. L’Oréal-backed startup Noli, an AI beauty matchmaker, also unveiled the AI Refinery, in collaboration with NVIDIA and Accenture, built with NVIDIA AI Enterprise software.

During a separate presentation, Cohere showcased its secure, enterprise-focused AI platform that deploys solutions directly within client environments, prioritising data sovereignty, security, and multilingual support. Cohere’s platform offers flexible usage including Virtual Private Cloud (VPC), on-premises, and air-gapped systems.

IADS note: Recent cyberattacks at major retailers such as Marks & Spencer and the Co-op, and the industry’s ongoing challenges with data accessibility and scaling AI highlight the value of self-sufficient digital infrastructure. For retailers, embracing digital sovereignty not only ensures compliance with evolving regulations but also fosters consumer trust, reduces vulnerability to cyberattacks, and lays the groundwork for innovation and long-term resilience in a fiercely competitive market.

AI hyper-personalisation for online and offline customer experiences

The usage of AI technology for personalisation has been one of the most heralded applications for the retail sector. McKinsey’s Next in Personalisation report found that 71% of consumers expect companies to deliver personalised interactions, and 76% get frustrated when this expectation is not met (ii). Furthermore, fast-growing companies generate 40% more revenue from personalisation compared to their slower-growing counterparts.

Key retail use cases, many of which are already deployed or being augmented by large retailers, include personalised product recommendations, dynamic pricing and promotions, AI shopping assistants and chatbots, predictive analytics, augmented reality and virtual try-ons, and hyper-localised real-time marketing. As usual at VivaTech, French companies such as LVMH and L’Oréal showcased their latest developments, including

• L’Oréal’s ‘Beauty Genius’ that enabled visitors to experiment with personalised campaigns,
• Lancôme's ‘nano-surfacer’, a beauty device that boosts cosmetic penetration,
• La Roche-Posay’s dermatological suggestion device.

VivaTech 2025 also featured several startups focused on leveraging AI for enhanced online and in-store user experiences. Highly personalised and interactive customer journeys are no longer limited to digital shopping with solutions offering targeted insights irrespective of channel. Most startups utilise advanced technologies, such as machine learning and computer vision, to generate high-quality, hyper-targeted insights.

Here is a selection of interesting startups spotted during our visit:

• Kahoona: The winner of LVMH’s Best Business Prize at its Innovation Awards, Kahoona is a real-time predictive audience segmentation solution for anonymised online visitors.
• JARVIS: Leveraging advanced audio and video analytics software, JARVIS’ GDPR-compliant in-store camera platform delivers real-time insights that can power personalisation strategies for retail by tailoring customer experiences based on nuanced behavioural data.
• PulpoAR: Offering virtual try-ons for beauty products through augmented reality technology, this beauty tech startup enables customers to receive tailored product recommendations and interactive, individualised shopping experiences.
• NeuroPixel: Developing a suite of generative AI tools that use computer vision and deep learning to create photorealistic models and backgrounds for fashion e-commerce, this deep tech startup allows brands to tailor visual experiences and product recommendations to individual customer preferences.

As a result, bolstering AI personalisation to enhance customer experiences across channels for retailers is now a necessity, not an added benefit.

Second-hand categories: catalysts for transformation

IADS insights from recent meetings with its members have found that second-hand categories have emerged as powerful growth drivers in retail, offering brands the opportunity to reach new consumer segments and fuel expansion. The rapid rise of second-hand commerce has outpaced traditional retail, driven by younger, price-conscious, and sustainability-focused shoppers (iii). According to Consumer Edge, shoppers aged 25 to 34 are leading this trend with a large majority opting for pre-owned items due to their affordability, unique styles, and environmental concerns.

VivaTech 2025 showcased a few startups focused on integrating second-hand sales into retail applications. However, the focus on sustainability seems to be tapering off compared to the previous editions of VivaTech with the broader focus this year being on AI applications for user experiences.

• The Cloov: a platform that helps brands integrate resale, rental and repair into retailers’ core businesses.
• The PAAC: a fashion leasing, rental and resale platform that promotes circularity.

Second-hand categories are an untapped opportunity for retailers to access new consumer segments, especially younger, sustainability-focused shoppers, while aiding compliance with increasingly stricter regulations. Ultimately, sustainable startups enable retailers to adopt greener practices while staying competitive.

Conclusion: New technological priorities shaping the retail industry

Since its inception, VivaTech established itself as the European innovation hub for the retail industry and beyond, bringing together startups, tech leaders, investors, and policymakers to address the most pressing digital challenges and opportunities. IADS partner and retail innovation platform, RetailHub underlined the trend among startups at VivaTech 2025 focusing on using AI for operational efficiency and user experience which aligns with broader industry trends.

Digital sovereignty is becoming essential for retailers, as stricter data regulations and the need for secure, independent control over digital assets drive the industry to prioritise data security and reduce reliance on external providers. At the same time, AI personalisation has evolved into a core feature, with advanced algorithms enabling tailored recommendations and real-time online and offline engagement. While sustainability remains important for younger consumers, the current focus for many retailers is on strengthening data protection and harnessing AI to meet operational and customer expectations.

i: A topic also raised in London during the last World Retail Congress by Schwartz Digits, available here.

ii: The value of getting personalisation right—or wrong—is multiplying

iii: Reduce, Reuse, Resell: Resale growth outpaces traditional retail

Credits: IADS (Anchita Ranka)

PRINTABLE VERSION HERE

Check out the photos of New Jersey Malls here

Ah, New Jersey—the land of reality stars, endless highways, and the eternal debate over whether Central Jersey exists. But beyond the clichés of big hair, bad drivers, and diners on every corner lies a state where malls are not just shopping destinations but cultural landmarks. One of the smallest states in the country, it is also the most densely populated (410 inhabitants per sq km), logically leading to a high concentration of retail centres, which explains why New Jersey has long been known as the "Mall State".

Two modern retail and entertainment icons stand out: the American Dream Mall in East Rutherford and the Westfield Garden State Plaza in Paramus. Both destinations showcase the evolution of U.S. shopping malls and highlight the unique character of New Jersey's retail landscape.

The American Dream Mall, a sprawling 278,000 sqm complex, redefines the mall concept by blending retail with world-class entertainment. From an indoor ski slope and water park to luxury shopping, including a Saks Fifth Avenue branch, and family attractions, it offers an immersive experience that caters to visitors of all ages. Meanwhile, the Garden State Plaza, New Jersey’s first major shopping centre, has remained a cornerstone of the state’s retail scene since its opening in 1957. Constantly reinventing itself with high-end stores and modern amenities, it exemplifies resilience and innovation in changing consumer habits. It also houses three department stores, Macy’s, Neiman Marcus and Nordstrom, all very differently positioned.

These two malls represent different facets of New Jersey’s mall culture: a futuristic entertainment hub and a timeless retail institution. Together, they provide a glimpse into why New Jersey remains central in shaping the mall experience in America. The IADS visited both last January.

Westfield Garden State Plaza: history and context of a Jersey old lady

Westfield Garden State Plaza, situated at the junction of Routes 4 and 17 in Paramus NJ, just 15 miles west of Manhattan, is a landmark in American retail history. Originally adjacent to a 1930s-era drive-in theatre and known when it opened in 1957 as the Garden State Plaza, the site became one of the most significant shopping centres in the U.S.

In the early 1950s, discussions between Allied Stores and Macy's about a joint project on the site were abandoned, leading Allied Stores to develop the Bergen Mall nearby (now the Bergen Town Center). Meanwhile, R.H. Macy & Co. announced plans for Garden State Plaza in 1954, establishing a subsidiary to own and operate the property. By 1955, JCPenney committed to a 7,700-square-meter standalone building.

The open-air shopping plaza cost $26m ($291m in 2024 dollars). It was New Jersey’s first suburban mall, drawing 75,000 shoppers when it opened on May 1, 1957, featuring a 31,500-square-meter Bamberger's department store (a company created in 1892, sold to Macy’s in 1929, and renamed in 1986) and 60 other retail stores. The mall quickly expanded its offerings, adding Russeks in 1957, Gimbels and JCPenney in 1958. These additions solidified the mall's status as the largest shopping centre globally and attracted shoppers from New York due to New Jersey's lower sales taxes and exemptions on clothing.

In 1975, the mall embarked on a project to enclose its open-air design due to competition from newer malls. It added 37,000 square meters of retail space, followed by new retail floors between 1981 and 1984. Westfield Group acquired the mall in 1986 and launched the development of an "entertainment lifestyle precinct" featuring an AMC theatre and speciality retail stores in the early 2000s, and a "fashion district" in 2014.

Regarding tenants, in 1990, Nordstrom had opened a store on Gimbel’s former site (closed in 1987), followed by Lord & Taylor in 1991 (which closed in 2020). An expansion in 1996 introduced Neiman Marcus and a remodeled JCPenney, alongside new parking structures and a Venetian carousel.

Today, Westfield Garden State Plaza is the 16th-largest shopping mall in the US, with 196,800 square meters of leasable space. It is home to over 300 stores and is considered a “super-regional mall.” It offers valet parking, currency exchange, guest lounges, and diverse dining options. Its retail mix effectively combines upscale brands with initiatives supporting local and minority-owned businesses through flexible leasing programs.

The mall benefits from a high-income catchment area with over 2.1 million people residing within a 10-mile radius. Despite restrictive ‘blue laws’ limiting Sunday retail operations to 6 hours (vs. 11 hours the rest of the week), the city of Paramus generates over $6 billion annually in retail sales, more than any other ZIP code in the U.S., and sales per square meter consistently exceed national averages, thanks to its four anchors, Macy's, Nordstrom, Neiman Marcus, and AMC Theatres. The area's strong schools, low taxes, and vibrant commercial scene contribute to its economic vitality.

Visiting the Garden State Plaza

The first feeling when entering the mall is that, while it is spread in terms of surface, it is not impressive, especially when arriving from the car park. It directly leads to the mall’s ground floor, which is zoned paradoxically: while luxury brands are located on this floor in the “luxury zone”, the way brands are distributed in the rest of the mall suggests that the “étage noble”i  is the first floor, where the most attractive non-luxury brands (from Apple to H&M, Lululemon, Sephora or AMC Theatres) are located. All three department stores are spread vertically, including on a top floor that is specific to them, not a mall floor.

The mall is structured as follows:

• The luxury zone, where Neiman Marcus is, includes Louis Vuitton, Gucci, Tiffany & Co., Burberry, and Versace on the ground floor and Tory Burch and Michael Kors on the first floor.
• The “fashion district” is more budget-oriented on the ground floor, with the likes of Old Navy, Pink, Express Men, and PacSun, and aims to bring more inspiration to customers on the first floor, with Skims, Banana Republic (an old concept), Zara, Hollister, Gap, J. Crew, Sephora, or Abercombie & Fitch. Not far from these brands, Apple, Tesla, and Yeti (a recent addition) reflect the mall's focus on innovation and first-to-market concepts.
• Restaurants are strategically located, with fast-food options on the ground floor (Chick-fil-A, McDonalds…, etc.) and family-oriented or higher-positioned options on the top floor (Fogo de Chao, Grand Lux Café, Eddie V…, etc.), mostly between the AMC theatre and Macy’s.

The sections feel overly segmented; for example, luxury shoppers may not venture into mid-tier zones, limiting cross-category spending. Also, the mall's vast horizontal size can make navigation overwhelming: while natural light-filled glass entrances create a welcoming first impression, the sheer scale of the mall can lead to "decision fatigue," especially for new visitors unfamiliar with its layout.

Nordstrom: forget about the City’s glitz & pizzaz, go for functionality

Nordstrom presents an understated shopping environment, characterised by a moderate size compared to its competitors (due to the ceiling height and its structure, it feels smaller than Neiman Marcus, which is the smallest of all three). Its main entrance is adjacent to Intimissimi and Zara on the ground floor and luxury lingerie brand Honey Birdette and Laderäch Swiss chocolates on the first floor (two rather surprising adjacencies).

Ground floor: upon entering, shoppers are greeted by a welcoming bar area, setting a relaxed tone for their visit. The ground floor is a substantial open space dedicated to women's fashion, shoes, and children's apparel. Despite the ample space, the section between escalators to the first floor feels notably sparse, lacking decorative elements or thematic staging.

Sale signage was ubiquitous (the visit was in mid-January 2025): discounted items occupied almost a third of the floor space. The click-and-collect order pickup area is straightforward and highly visible, eschewing any elaborate concealment or branding. The design is fundamentally basic, with a uniform concept across the floor (no shop-in-shops) and minimal peripheral branding or signage.

First floor: it houses an array of shoes, cosmetics, accessories, and men's fashion. While the presentation is consistent, certain shoe brands are afforded a semblance of luxury, elevating their display. Cosmetics are organised into branded corners, allowing for targeted browsing, while designer handbags receive special attention, enhancing their appeal.

Accessories and shoes benefit from a more thoughtful presentation than the somewhat flat approach to men's fashion, which lacks vibrancy. During the visit, the visual merchandising team worked on the floor displays and ironed garments while shoppers were there.

Second floor: The second floor is dedicated to elevated women's ready-to-wear (WRTW), evening attire, activewear, and lingerie. The only brands made highly visible are Skims, Nike, and women’s fashion brand House of CB.

Overall, Nordstrom effectively leverages its space, offering a straightforward yet functional shopping experience. While the store lacks dramatic staging or decor, its layout facilitates easy navigation and access to diverse product categories. The focus on simplicity and functionality, complemented by select displays of luxury, makes the store accessible but somewhat surprising for anyone used to the sophistication of the New York stores.

Macy’s: the oldest store in the mall shows its age

Macy's, the oldest department store in the mall, is also the largest, divided into three floors of unequal sizes. Foot Locker and men’s suits brand Indochino flank the entrances on the ground floor, and Sephora and jewelry brand Gorjana on the first floor.

The ground floor is divided into several distinct zones, which can be a bit confusing. The children's section is notably integrated with Toys "R" Us, offering a separate RTW space dedicated to children's products up to age 20. Despite its broad range, this area lacks inspirational design elements and presents a straightforward, functional layout.

Adjacent to this is the home section, which straightforwardly presents its kitchenware, unlike the more typically staged displays. Though vast, the bedding area lacks character and offers a very sanitised shopping experience. A notable feature is the expansive coat and swim section, positioned past the bedding area.

A seasonal promotion space provides direct access to the main shopping corridor, ensuring high visibility for featured products.

The first floor houses an extensive cosmetics section, arranged in an atrium at the entrance, alongside a seemingly endless men's department. The layout here is more segmented, with specific areas dedicated to various product categories, including accessories, sportswear, and women’s shoes. Despite the abundance of products, the sheer volume can make it challenging for shoppers to locate specific items easily, compounded by frequent promotions and sales.

Certain brands like Boss, Levi’s, and Nike enjoy prominent wall displays within the men's section, while others are presented more generically. The ambiance is characterised by wooden flooring and focused lighting on lower ceilings, providing a distinct shopping atmosphere. Customer interaction is encouraged through technology, offering incentives for scanning customer reviews to make informed purchasing decisions. However, there is no specific merchandising around these devices to promote cross-shopping.

The second floor is dedicated to women's fashion, where organisation by brand is more pronounced than in the men's section. Despite visible brands, the floor suffers from a ceiling in disrepair, which detracts from the overall aesthetic.

This level features a substantial plus-size section, positioned across from a petite section, catering to a wide range of body types. Brands like Anne Klein and Karl Lagerfeld are prominently displayed as shoppers arrive via escalator, alongside Macy's proprietary brands like INC and On 34th Street.

Overall, the store targets too many customers simultaneously, reflected in the complex mix of abundant product offerings and overwhelming store layout. Also, despite technology-driven initiatives aiming to facilitate a seamless shopping experience, the store feels old, with spacious yet occasionally uninspired areas and some parts that would benefit from a refresh.

Neiman Marcus: a stark and seemingly effortless contrast with its competitors 

Compared to its two competitors and considering the neighborhood, the Neiman Marcus store most closely resembles a larger flagship typically found in central urban areas—one where tourists would likely feel at ease. It also appears the least “suburban,” thanks to its refined and sophisticated atmosphere.

Its entrance, in the luxury section of the mall, feels less cluttered than its competitors', thanks to an ideal location under a glass ceiling, in front of an atrium flanked by Tiffany’s & Co., Louis Vuitton, a Chanel store being refurbished at the time of visit, Gucci and Ferragamo just in front on the ground floor, and Tory Burch and Kate Spade on the first floor.

The ground floor sets the tone: the execution of the luxury concept is evident in the selection of brands and the meticulous attention to detail in their presentation. The cosmetics section, though relatively small compared to other areas, is nestled amidst high-end women's handbag brands such as Bottega Veneta, Chanel, and Loewe, creating a refined atmosphere. This section is positioned next to men's shoes and RTW collections.

Ascending to the first floor, shoppers are greeted with an elevated sense of style, focusing on women's designer fashion and jewelry. Carpeting defines these areas, offering a warm and inviting atmosphere that contrasts with the more utilitarian spaces of other department stores, such as Macy's.

The second floor caters to children and luxury fashion, featuring brands like Chanel and Moncler. Dedicated corners for each brand, such as Balenciaga and Casablanca close to Loewe, create distinct shopping zones that highlight the exclusivity and prestige of each label. The home section is cleverly integrated with children's offerings and conveniently located near a restaurant, the Rotunda, providing a pleasant and relaxing shopping environment for families, particularly appealing to women.

Overall, the thoughtful arrangement and execution of luxury at Neiman Marcus reflect a commitment to providing an upscale, cohesive shopping experience. The strategic placement of high-end brands alongside essential services ensures that the mall meets the diverse needs of its clientele, maintaining its status as a premier destination for luxury shopping.

The American Dream Mall: the cool new kid on the block

Located in East Rutherford, the American Dream is the second-largest mall in the U.S., surpassed only by the Mall of America. Its history has been shaky: everything began in 2003, under the name Meadowlands Xanadu, proposed by the Mills Corporation. Construction kicked off in 2004, but the project quickly encountered significant challenges. By 2007, Colony Capital had taken over, only to be stymied by the 2009 bankruptcy of Lehman Brothers, halting construction even though the project was leased at 70%. The Triple Five Group, the Mall of America’s developer, expressed its intent to take control in 2011, officially acquiring the mall and its surrounding site two years later. Yet, progress remained elusive, with construction ceasing again in 2016 due to financial and legal complications.

Construction didn't resume until 2017, thanks to the injection of $1.67bn in the project, even though it experienced a series of "chronically delayed" openings. The initial building phases finally opened in 2019, with the Nickelodeon Universe theme park (the largest indoor theme park in North America) and the Big Snow American Dream indoor ski slope (the first of its kind in North America), only to be closed in March 2020 due to the COVID-19 pandemic, just as it was poised for a broader unveiling, including the DreamWorks Water Park (the world’s largest indoor wave pool). It took seven months, in October 2020, for the mall to fully reopen and unveil its newest attractions. By 2021, the complex had introduced several new attractions, including Sea Life Aquarium, Legoland Discovery Center, and The Avenue luxury wing. Despite these expansions, financial challenges continued, with reported losses due to the pandemic, the local “blue laws” related to opening hours during the weekend, bond payments, and other setbacks.

Nowadays, the mall has an occupancy rate above 80% and hosts approximately 450 retail tenants, offering everything from high-end retail to innovative entertainment experiences. Approximately 55% of the space is dedicated to attractions, designed to make the most of the catchment area (and generate additional revenue) characterised by:

• A densely populated region with affluent households in northern New Jersey.
• Access to over 65 million annual visitors to the tri-state area.
• An estimated annual footfall of 40 million visitors, with half projected to be tourists interested in the unique experiences.

However, the financial strain from delayed openings, debt obligations, and high operational costs contribute to skepticism regarding its profitability. This skepticism is also based on its power to attract Manhattan residents (VIP amenities include helipad access for affluent customers traveling from Manhattan or the Hamptons) while the luxury shopping options it offers already exist locally. Also, critics raised the issue that the retail offerings might be underwhelming compared to the entertainment options, and the same goes for the dining options.

Finally, the mall is just under 20 minutes by car from Garden State Plaza.

Visiting the American Dream Mall

Spanning three levels, the American Dream Mall emphasises a horizontal layout over verticality, allowing for expansive floor space dedicated to its myriad attractions and retail offerings. But international visitors beware: the experience can be underwhelming when comparing the mall to international references, such as The Dubai Mall or malls in Asia, even though the American Dream claims to compete with them in terms of surface and array of experiences. While the sheer scale of the mall can make navigation confusing for first-time visitors despite signage, some areas feel disconnected due to stark contrasts in design or audience focus (e.g., luxury vs mass-market zones).

The mall emphasises experience, which is central to its appeal. It differentiates from the Garden State Plaza with unique experiences that seek to go beyond traditional shopping. Despite the ongoing presence of hoardings indicating areas under development or renovation, the mall remains a dynamic and engaging environment for visitors. The luxury wing, "The Avenue," features stores designed to evoke an open-air shopping experience, providing a fresh and upscale environment that contrasts with the much more conventional Garden State Plaza.

In addition, there are some details that give a unique flavor to this mall: for instance, with Tesla charging stations conveniently located in its parking areas, the mall caters to the needs of eco-conscious visitors while enhancing the overall accessibility and convenience for shoppers.

Visiting Saks Fifth Avenue

The Avenue, the luxury segment of the American Dream Mall, aims to offer shoppers an elevated retail experience reminiscent of open-air shopping streets. The design is ambitious, and branded stores, such as the Saint Laurent or the Hermès ones, are truly spectacular, to the point of making the Saks Fifth Avenue anchor almost invisible.

The department store is situated at the far end, making it less visible and accessible to casual visitors, and spans two floors.

The first floor is dedicated to men's and children's fashion and also features a gallery and a café that remained unopened at the time of visit (January 25). Despite its aesthetic appeal, the space lacked foot traffic and engagement, with entire sections remaining unlit and devoid of greeters, contributing to a sense of emptiness.

The Saks Club and a small lingerie section are present, but their placement feels inconsistent with the overall design, creating a disjointed shopping experience.

The ground floor offers women's RTW, cosmetics, shoes, and accessories. The cosmetics section, centrally located with various stands, disrupts the visual flow, while the periphery hosts luxury leather goods, including Louis Vuitton and Saint Laurent. The latter has a prominent double-decker store opposite the main area, which raises questions about the brand saturation in the mall.

Despite these high-end offerings, the ground floor was noticeably deserted when visited. Cash registers are tucked away in corners, making them difficult for shoppers to locate. Eyewear stands are flashy yet incongruous with the surrounding decor, with flashing lights that clash with the luxury theme.

In fact, lighting is a significant issue, particularly in the RTW section, where poor illumination hampers product visibility. Sale racks are pushed to the back, further diminishing their appeal. The jewelry section, intended to be a highlight, remains mostly empty, lacking the vibrancy one would expect from such a luxurious setting. The absence of visible staff exacerbated the feeling of desolation, leaving shoppers without guidance or assistance.

While The Avenue at American Dream has the infrastructure and branding to direct high-end shoppers towards Saks Fifth Avenue, its execution falls short and feels somewhat disconnected from the grand ambition the mall itself is trying to provide to its visitors.

These two New Jersey malls reveal something far more profound than just retail spaces - they represent a uniquely American contradiction. In a country that birthed modern consumer culture and exported it globally, these suburban retail cathedrals expose a striking disconnect between America's self-perception and the international standard.

The stark contrast between New York City's sophisticated retail environments and these suburban counterparts is jarring. What's particularly remarkable isn't just the quality gap but the American consumer's apparent acceptance of this disparity. While Westfield Garden State Plaza generates over $6 billion in annual sales and boasts impressive statistics, the experience feels outdated, fragmented, and fundamentally utilitarian rather than inspirational.

This phenomenon speaks to a broader cultural characteristic: American suburban retail often prioritises functional consumption over experiential excellence. The emphasis on volume, convenience, and accessibility has created environments that would be considered subpar in many international markets, particularly in Europe and Asia, where retail design has evolved to blend commerce with culture and aesthetics seamlessly.

Even American Dream Mall's attempt to innovate through entertainment-focused retail feels like a compensatory mechanism—an acknowledgment that the traditional American mall needs extraordinary attractions to remain viable in an era when pure shopping no longer suffices. Yet despite its ambitions, it struggles to deliver a cohesive, sophisticated experience.

Perhaps most telling is the Saks Fifth Avenue at American Dream, a luxury retailer whose presentation undermines its premise. The poor lighting, confusing layout, and absence of attentive staff reveal a fundamental misunderstanding of what luxury retail should deliver. It's as if the concept of luxury has been reduced to brand names alone, divorced from the experiential elements that define true luxury elsewhere in the world.

This disconnect reflects America's complex relationship with class, consumption, and identity. In a society that simultaneously celebrates wealth while maintaining an egalitarian self-image, these suburban retail environments embody a peculiar compromise - spaces that offer luxury brands but within environments that remain fundamentally accessible and unpretentious, even when this undermines the very experience they aim to deliver.

For international visitors accustomed to the seamless integration of commerce, culture, and design found in retail destinations worldwide, these New Jersey malls offer a fascinating window into American consumer culture - one that reveals how the birthplace of modern retail has, in many ways, fallen behind the global standards it once established.

Credits: IADS (Selvane Mohandas du Ménil)

PRINTABLE VERSION HERE

Generation Alpha Infographic

Generation Alpha, born between 2010 and 2024, is emerging as a significant consumer group. With an estimated USD 5.46 trillion economic footprint by 2029, Gen Alpha’s spending power is almost as much as that of Millennials and Gen Z combined. The demographic is now closer to working and shopping independently, requiring the retail industry’s attention.

Caught off guard by Gen Z, brands and retailers are already implementing several strategies with “tweens” to effectively appeal to both Generation Alpha and their parents. Social media, climate change, and efforts in prioritising transparency and inclusivity shape Gen Alpha’s world. They value authenticity, sustainability and brands that align with their social values. Similar to Gen Z, their loyalty to brands is not a given.

As a consequence, marketing to them requires a different approach, as they are strongly influenced by peer recommendations on social media and gaming platforms and expect stores to be amusement parks.

The below illustration shows how Gen Alpha differs from the others.

![GEN ALPHA

McCrindle – Decoding Gen Alpha

At the crossroads of tech maturity, social media and gaming

Technology as a way of life

Millennials grew up with personal computers, leading the way in internet usage and technological adoption. Gen Z was raised in the era of smartphones and social media, with limitless information always within reach. Gen Alpha has grown up with advanced technology and has never known a world without AI, AR, or gaming. No single technology or platform defines Gen Alpha. Instead, their distinctiveness lies in their overall tech-savviness and ease with emerging technologies. This generation naturally navigates new tools and technologies in ways we’ve never seen before. They interact with AI tools like ChatGPT and virtual assistants, making spatial computing and augmented reality their norm.

Unlike previous generations, and seeing technology as an integral part of life, they blend physical and virtual experiences, from gaming and socialising to shopping. As a result, they expect seamless integration between online and offline shopping experiences, pushing retailers to focus on creating personalised interactions and ensuring a smooth omnichannel presence. This includes user-friendly websites, mobile apps, and in-store technologies that enhance the shopping experience.

Social media platforms are crucial, but gaming platforms get traction

Retailers should create content that resonates with Gen Alpha, utilising popular platforms and collaborating with influencers. According to the Harvard Business Review analysis of Generation Alpha, unlike Millennials who favoured Facebook and then Instagram, Gen Alpha prefers TikTok and engage in popular trends such as "get ready with me" videos and "shelfies" (videos showcasing products on bathroom shelves). But more than the usual social media platforms, Gen Alpha is investing time in gaming. According to the Business of Fashion, they now spend a bit more time on gaming platforms (Roblox, Fortnite, Minecraft) than on social networks, with 5.2 hours vs. 5.1 hours per week. User-generated gaming is rising, with kids preferring to create their game environments and avatars rather than just playing pre-made ones. Gen Alpha even asks parents for virtual currencies instead of traditional allowances. For example, Robux, the Roblox currency, allows users to customise their avatar or to buy additional functionalities.

Also, according to retail consulting firm J.C. Williams Group, Gen Alpha is used to creating relationships through technology. Unlike Gen Z, they are comfortable with never meeting people and may develop friendships online. So, Gen Alpha interactions with friends are shifting toward the metaverse, where WhatsApp groups, Discord servers, and Roblox DMs are replacing traditional platforms like Instagram and Snapchat.

Current and future shopping patterns

It’s a family business: targeting parents

Gen Alpha and their parents influence each other’s purchases. Gen Alpha is impacting their parents' shopping habits and has USD 300 billion in spending power through parental influence, so brands need to have a dual-focused marketing approach and keep on marketing to adults, as parents greatly influence their purchases. Trends extend beyond Gen Alpha and resonate with older generations as well. For example, Gen Alpha greatly influences their family's entertainment choices, preferred food and delivery services, home technology adoption, and hygiene products. Their emphasis on health, wellness, and sustainability significantly shapes their parents' purchasing decisions.

A generation focused towards adult brands

Due to social media and digital influence, Gen Alpha is more brand-aware than other generations but doesn’t have many dedicated spaces or brands targeting their specific needs. Unlike previous generations who had “tween” brands catering to their needs (for example, Tammy Girl in the UK in the '90s’), Gen Alpha tends to gravitate towards adult brands, preferring to shop where their Millennial parents shop, such as at Lululemon and Sephora. Also, many young shoppers share the same favourite brands as their parents, like Amazon. As a result, the concept of a “tween” market is fading, and brands prefer to expand product sizes instead of creating separate lines. As a result, many retailers now market to parents, knowing Gen Alpha influences their spending decisions. Gaming platforms become brand discovery spaces as 60% of Gen Alpha discover new brands through gaming experiences. Success stories like Fenty Beauty's Roblox contest,  which led to real product launches, demonstrate effective gaming engagement strategies.

Trends are now popular with multiple generations, often based entirely on trying and reviewing different products. This phenomenon is visible with skincare and makeup, but also with clothes, accessories, furniture, and more. Brand audiences are no longer defined by narrow demographics: everything is for everyone. Millennials and their Gen Alpha kids are likely to share the same viral cult products, such as the Stanley the tumbler for example.

Will Gen Alpha be the first generation to prioritise CSR concerns?

Like every other demographic, younger consumers are price-conscious, which is evident in Shein's success. Among Gen Z, 52.6% of 16-24 year-olds in the UK ordered from abroad in 2023, of which .

Will it be different with Gen Alpha? They will feel the growing impacts of climate change more than any previous generation. Also, they will have to cope with massive social and geopolitical shifts, widespread mental and environmental health crises, and ongoing struggles for equality. Under such circumstances, like Gen Z, Gen Alpha declares is a key concern. Retailers should continue their sustainability efforts, offer eco-friendly products, reduce waste, and support ethical practices. Creating second-hand or resale programmes can also appeal to this demographic's eco-conscious concerns. Gen Alpha values inclusivity and diversity. Retailers should ensure their products and marketing campaigns reflect various cultures, identities, and experiences. However, it’s uncertain if what Gen Alpha declares will reflect in their purchases once, freed from their parents’ choices, they can fully decide what they buy.

What does Gen Alpha want? Customisation, entertainment and curation

Experience, personalisation and co-creation

Offering customisation options allows Gen Alpha to express their individuality as they engage with technology as creators and world builders. They ‘build together with’ or ‘play with’. Also, they are truly “the builders and users of the metaverse.” Gen Alpha might finally give true value to this technology. This is mainly due to platforms like Roblox, Minecraft, and Fortnite, which have revolutionised gaming by enabling players to design their own worlds, characters, storylines, and rules. Gen Alpha has embraced this creative freedom, using it as a means of self-expression and innovation. Their deep connection with experiential technologies also shapes their engagement with the physical world. In the US, while their parents might visit attractions like the Museum of Ice Cream to take Instagram-worthy photos, Gen Alpha prefer experiences like Meow Wolf, an immersive art experience that blends storytelling, technology and exploration, focusing on participation rather than documentation. With their enthusiasm for these interactive spaces, retailers who build experiential attractions and provide personalised products or services can capture young consumers' attention and wallets.

Stores are entertainment parks: beauty retailers ahead

Physical shopping experiences like visiting Sephora or big-box retailers feel like amusement parks for Gen Alpha as they enjoy interactive retail environments. Already aware of the fact, beauty retailers Sephora and Glossier are hosting children's birthday parties, transforming stores into experiential celebration venues. These events combine educational elements, such as age-appropriate skincare tips and makeup tutorials, with entertaining activities like store scavenger hunts. At Sephora, makeup artists teach young guests about "dewy skin" techniques, while staff create beauty sample goodie bags as party favours. Glossier's flagship locations accommodate planned events and impromptu celebrations, seeing increasing demand for beauty-themed gatherings. The trend signals a significant shift in beauty retail strategy, where stores are evolving from pure shopping destinations to true experiential venues that forge emotional connections with future consumers. The trend extends beyond major retailers, with specialist brands like Rile, a teen beauty brand, offering skincare education parties led by teen ambassadors. This approach allows retailers to engage with both parents, who appreciate the structured learning environment, and children, who enjoy the interactive experience. For brands, it represents a significant opportunity to build brand loyalty during formative years. Beauty seems to lead the way for entertaining Gen Alpha, but toy retailer Camp in the US was a pioneer with their family experience combining retail with interactive play, offering shop/play hybrid experiences and rotating themes.

Curating relevant product offer: the example of Nordstrom

Department stores are also launching strategies to attract Gen Alpha. In October 2024, Nordstrom demonstrated this shift by launching dedicated in-store "young adult" beauty kiosks and a new online category dedicated to this segment. Reminding of the likes of Galeries Lafayette’s unprecedented “Club 20 ans”,i opened in 1969 and gathering several product categories (fashion, trinkets, music, etc) for teenagers, Nordstrom’s kiosks are located on teen apparel floors, feature popular brands like Kiramoon and Kaja beauty brands, alongside clothing from brands such as Pacsun and Asos. Currently available in six locations and online, the initiative offers over 850 products. Nordstrom's strategy involves leveraging data from TikTok and its website to identify trending categories, such as the "everything shower” trend (products to use in the shower beyond soap and shampoo), which has led to successful product additions like Oui The People shaving brand. The key to success here is to focus on youth-coded but not overly juvenile products.

These strategies reflect retailers’ understanding that today's experiences are shaping tomorrow's consumers, with retailers balancing entertainment, education, and brand awareness. Also, these Gen Alpha recruitment tactics seek to offset challenges in the luxury market by tapping into alternate revenue streams. This trend toward early customer engagement was further evidenced in 2024 when Ulta Beauty introduced collectable miniature replicas of popular products targeting children as young as six.

The rise of Gen Alpha as a key consumer group represents a significant shift in retail strategies, as this generation’s tech-savviness and unique shopping preferences reshape the retail landscape. Prioritising authenticity, digital influence, experiences seamlessly blending digital and physical retail, customisation initiatives, and interactivity presents new opportunities for retailers to engage and retain their loyalty. Retailers must adapt by offering personalised experiences, leveraging immersive technologies, and emphasising sustainability. Additionally, as this generation has an increasing influence on family purchasing decisions, brands must align their marketing efforts to resonate with both Gen Alpha and their parents, ensuring they are well-positioned to capture future market share.

i : Galeries Lafayette’s « Club 20 ans » was featured in the Paris Cité de l’Architecture exhibition “La Saga des grands magasins”whose contributions include Galeries Lafayette, Magasin du Nord, El Palacio de Hierro, SKP and the IADS

Credits: IADS (Christine Montard)

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Check out the photos of small format stores here

Department stores and big-box retailers have traditionally believed that larger spaces and inventory would make them more appealing to shoppers, which was true for many decades. For many reasons, including consumers favouring e-commerce and more convenience and the challenge of finding and supporting the cost of operating big-box locations, a significant shift is taking place as US department stores Macy's, Bloomingdale’s and Nordstrom* open smaller-format stores. This approach isn't about scaling back, as these small stores are not about limiting customer options. Instead, retailers break away from the stereotypes often associated with big stores: overwhelming layouts and product selections offered in inconveniently located stores. The small format concept is designed to provide a more curated selection of products, focusing on convenience, services and localised shopping experiences, concepts that have gained traction since Covid.

Seen as an opportunity to get closer to where the customers are with a smaller investment, Nordstrom Local opened its first location in 2017, and Bloomie’s in August 2021. Both companies have been expanding their footprint in these formats since then. Outside of the US, Magasin du Nord opened two small formats in 2024. This article will focus on these three companies’ journey and efficiency.*

What is a small-format store anyway?

A small-format store could be defined as follows:

• Curated product selection: a carefully selected assortment of products tailored to the local market's needs and preferences. It allows retailers to focus on specific demographics and provide a personalised shopping experience.
• Location and accessibility: these stores are often located in urban areas and densely populated neighbourhoods. This strategic placement maximises convenience for local shoppers and allows retailers to penetrate markets that may not support larger store formats.
• Omnichannel integration: many small-format stores integrate online-to-offline services such as in-store pickup, returns, and kerbside pickup. This enhances the customer experience by providing flexibility and convenience.
• Cost efficiency: with a smaller footprint, these stores are easier to find and typically have lower operating costs, allowing retailers to expand their reach in high-priced real estate markets while securing profitability.

The shrinking storefront: Bloomie’s rethink scale, relevance and reach

In response to mixed reviews of its traditional stores, Macy's has adopted small-format stores to simplify shopping and enhance integration with its digital shopping ecosystem. At about 20% of the size of traditional locations, these smaller stores, Market by Macy’s and Bloomie’s, provide a curated selection of private label and national brands tailored to local markets, along with various online-to-offline services. Early results were encouraging, with Macy's reporting that these stores open for at least a year were achieving sales growth on par with full-size locations. Back in 2023, Macy’s was planning to open 30 additional small-format stores by the end of 2025, in addition to the existing 15 small-format Macy’s and Bloomie’s stores already in operation. However, in early 2025, they announced that they would close four of their 24 Market by Macy’s small-format stores, a shift from the acceleration announced in 2023.

On its side, Bloomingdale’s has been experimenting with small-format stores since August 2021. Their Bloomie’s locations are:

• Fairfax, Virginia, on 2,000 sqm, opened in August 2021,
• Skokie, Illinois, on 4,600 sqm, opened in November 2022,
• Seattle, Washington, on 1,800 sqm, opened in November 2023,
• Shrewsbury, New Jersey, on 1,900 sqm, opened in November 2024i.

These openings reflect the three possible approaches underlying each decision:

• Filling a void when Macy’s Inc. closes a department store, but there are still loyal customers in the area. Bloomie’s Skokie store illustrates this approach. In this specific case, a Bloomingdale’s store closed and was replaced by Bloomie’s.
• Entering a market untapped by Macy’s Inc. The Bloomie’s Seattle store is a perfect example as it enters the Nordstrom land without Macy’s Inc. stores.
• Densifying its presence in a market where Macy’s Inc. already operates a department store and sees an opportunity to fill in with another store to serve customers better and capture new ones.

Bloomie’s store in Fairfax reflects this approach since it supports the two existing Bloomingdale’s stores in the region. In November 2024, Bloomingdale’s opened the fourth Bloomie’s store at The Grove Shopping Centre in Shrewsbury, New Jersey. It is designed to complement Bloomingdale’s presence in the state, which includes four full-line shops and three outlet stores.

This latest store features services like styling, alterations, gift wrapping, and a grab-and-go food spot. Rachel Abeles, Bloomingdale’s SVP of Customer and Revenue Growth, said that “Bloomie’s is a perfect example of how our brand continues to evolve with our shoppers’ needs and preferences.” Reflecting this, the store is the first to offer an all-women’s assortment, which includes contemporary RTW, accessories, beauty and fine jewellery.

Bloomie’s store design is flexible, allowing the company to grow or reduce presentations of brands and trends depending on their success. Store assortments stick to local preferences as exemplified in the Seattle location, which offers women’s, men’s, beauty, accessories, home and gifts, with a strong focus on contemporary labelsii.  However, it also introduced new brands, Sandro and Maje, which were their first-ever brick-and-mortar presence in Seattle at the time of the opening. The Seattle store also has a space for rotating pop-ups and trend presentations. Despite limited surfaces, Bloomie’s product offer is not as small as it looks, as Bloomie’s can source merchandise for shoppers from other Bloomingdale’s stores and the NYC flagship.

Contributing to the halo effect of online activities in the regions where the stores are located, Bloomingdale’s plans to open more Bloomie’s locations. They will probably open another couple of them to prove further the viability of the format and the relevance of a possible rollout across the country, with the next one to open in Texas in 2026, a major and untapped market.

i : By comparison, Bloomingdale’s department stores are usually 14,000 sqm to 19,000 sqm.

ii: Intimates, kids, furniture, food and designer labels are not part of the mix

Strategic compactness: Magasin du Nord’s small stores drive loyalty and synergy

In the Fall of 2024, the Danish department store opened two small-format stores. The concept brings a “taste” of Magasin du Nord to local customers with good-quality products at reasonable prices in a convenient format, also introducing the brand’s full online offerings. Magasin du Nord aims to fuse physical presence more tightly with its online platform as part of their omnichannel strategy. As a result, these stores serve as both a point of contact for e-commerce customers and an animation space, enhancing customer engagement and operational flexibility.

The first opening was in Slots Arkaderne shopping mall in Hillerød with a concept targeting both local consumers and tourists, providing goods that are not widely available elsewhere. The second, in Odense's Rosengårdcentret, Denmark's largest shopping centre, spans 700 sqm. Magasin du Nord expects this new format to create synergies with their existing Odense city centre store, supporting each other in sales, experiences, and staffing. DKK 2.5 million capex were invested in each store.

Both stores focus on offering a curated mix of women’s fashion, women’s accessories, lingerie, beauty, food and home products along with services:

• With the most important surface, Women’s Fashion dominates sales in both stores.
• Cosmetics & Beauty performance varies from one store to another, but the category is well-positioned in terms of sales.
• The Home & Decor categories might expand as they exceed expectations and sometimes beat Cosmetics & Beauty with similar surfaces.
• Other categories (Lingerie, Women’s Accessories, Food) together represent a small part of the total sales. In the future, they should give each category a permanent space and increase the surface given to gifting during peak seasons, especially as these stores are positioned as top destinations for convenient, seasonal, grab-and-go gifting options.
• Within product categories, both stores carry Magasin du Nord Collection private label, presenting a full seasonal assortment. The stores are prioritised for stock options and deliveries, focusing on best-selling and best-value permanent styles like NOOS (Never Out Of Stock) products.
• Customer service is a key pillar, offering click-and-collect, order from store, complimentary coffee, spacious fitting rooms with lounge areas, gift wrapping, and product return.

Magasin du Nord noted that weekly replenishment and delivery of new products have positively impacted the NPS and footfall. Hillerød sees traffic spikes on delivery days (Wednesdays), and the store achieved an NPS of 70.6 in 2024, showing customer satisfaction. From analysing online sales from customers’ zip codes, there’s room to expand assortments by adding successful online products and top-performing brands not yet stocked in-store.

The layout is designed around fixed category zones with flexible space allocation depending on performance, and newness is emphasised through a bi-weekly product rotation. The optimal layout is 700 to 1,000 sqm on a single floor with box-like proportions and the following features:

• A unique payment point near the entrance with four cash desks,
• A clear flow from entrance to exit,
• Four to six fitting rooms,
• Flexible, generic fixtures,
• High-density merchandising,
• A commercial yet inspirational ambience.

The primary customer base is from the shopping centres’ footfall, mostly women aged 35-70, with a secondary target of younger females aged 15+, often daughters of the primary target. Magasin du Nord sees success in growing customer loyalty, exemplified by the Hillerød store, where 600 new loyalty members have joined since the store’s opening, marking a 66% increase in that area. Marketing is hyper-localised through shopping centre apps and Facebook, targeting stores’ zip codes. The model de facto saves on customer acquisition costs or, in other words, these stores could be considered an investment for online performance.

The strategy behind the new format is to utilise smaller, more specialised retail spaces to quickly adapt to market changes and consumer trends. While it is in a testing phase with a very small team for strategy and operations, the company plans to unveil more locations for similar local stores in the future. Several potential locations are under review, including possible ventures in Sweden and Norway.

Retail reversed: how Nordstrom Local takes the store to the customer

One of the many questions retailers always have on their minds is how to attract more people to their stores. Instead of focusing on bringing people to the store, Nordstrom Local reversed the question to “how do I get more of my store to where the people are. It’s a switch worthy of attention because it gets retailers away from the idea of a central, fixed location as the driver of their businesses.”

The Nordstrom Local retail concept was launched in Los Angeles in October 2017 and has developed since then. These commercial spaces are not stores per se, but rather merchandise-free service hubs operating as support units to Nordstrom stores located in the same area. Nordstrom Local now accounts for four locations in California (instead of five a few months ago) and two in NYCiii.  Nordstrom Local service hubs are relatively small, usually between 100 sqm and 300 sqm. Considering their size, such locations are relatively “easy” to find and to run, and most importantly, to fund. Units are located where the population is wealthy and/or very young and very active.

The concept harkens back to an idea at the core of Nordstrom's value proposition: service. From a customer’s perspective, Nordstrom Local provides easy access to personalised services. The format is mainly relevant in areas where distances and traffic are important factors: the convenience of picking up merchandise nearby is a game-changer for customers. The store design and services are adapted according to the neighbourhood atmosphere and needs. Depending on local needs, Nordstrom Local offers a wide array of services, including BOPIS, kerbside pick-up and easy returns, alterations, personal shopping and virtual styling, but also gift wrapping, leather goods and shoe repair, and a community meeting space. Some locations offer more unusual services, demonstrating how Nordstrom Local sticks to the local needs: tuxedo rental in Los Angeles, stroller cleaning in NYC’s Upper East Side location, and sneaker cleaning in NYC’s West Village.

In 2019 Q1, company representatives said that Nordstrom Local customers spend more than two-and-a-half times as much at Nordstrom as regular customers. The launch of the two NYC service hubs led to a 400% increase in local shoppers taking advantage of its BOPIS service. Also, Nordstrom Local performed above average compared to flagships during the pandemic. In general, Nordstrom said its customers in Nordstrom Local spend more and return goods faster, giving the retailer a better chance of reselling returned products.

Nordstrom hasn’t opened more Nordstrom Local stores since 2020, raising questions about the concept’s long-term success as is. In February 2025, while creating a new Director of Luxury Styling role for Neiman Marcus veteran stylist Catherine Bloom, Nordstrom converted the Melrose Place Local store into Catherine Bloom for Nordstrom luxury service space. Bloom will bring extensive experience serving high-profile clients, including Hollywood stars, executives, and international elites. The appointment leverages Bloom's expertise in curating personalised wardrobes and made-to-measure services. The Nordstrom Local transformation demonstrates a bigger focus on high-value customers, reflecting the luxury sector's increased emphasis on personalised experiences and customer relationships. Will it serve as a blueprint for other Nordstrom locations?

iii: California locations are in Brentwood, Manhattan Beach and Newport Beach. NYC locations are in the Upper East Side and the West Village.

Small format, big debate: are small-format stores the future or a distraction for department stores?

Retail experts’ opinions are mixed on how smaller format stores can really improve department store results. In the case of Nordstrom, the units are relatively small and don’t involve inventory, “only” supply chain capabilities (delivery and reverse logistics), a few fixtures and limited staff. Nordstrom Local stores can consume resources, though, as NYC rents are incredibly high.

In the case of Macy’s Inc., Market by Macy’s and Bloomie’s stores are certainly an interesting evolution of the department store concept. Still, they are not a solution to Macy’s planning to close 150 stores, as they represent a small part of Macy’s Inc.’s business. However, as Neil Saunders, GlobalData Managing Director said, Bloomie’s stores are “strategically important as they are a future vehicle for growth. It is much easier to open a smaller format as there are more locations where these stores are viable, and expanding the concept is less capitally intense.” Besides, in the case of Bloomie’s replacing a larger-format store that was not ideally positioned (this was the case in Skokie), the change showed impressive results: despite reducing the footprint to about 25% of the original store's size, they maintained roughly 100% of the sales, demonstrating the format's efficiency.

Still, not all analysts are convinced by small formats. In 2023, retail analyst Walter Loeb criticised Market by Macy's plan for rapid small-format expansion, comparing it with Bloomie's more measured approach and methodical expansion of well-edited stores, suggesting the latter's strategy may be more sustainable. This strategic divergence highlights the risks and opportunities in department store transformation, where rapid expansion must be balanced against maintaining brand value and operational efficiency. While Macy's aims to penetrate new markets rapidly, critics argue this approach could divert attention and resources from improving flagship locations.

Finally, according to Nick Egelanian, president of retail development firm SiteWorks, opening small-concept stores may be a good idea. Still, it won’t take away from the fact that Macy’s, with its traditional large locations, has been highly challenged: “everything else Macy’s does] consumes critical resources and focus that should be laser-focused on the primary task at hand — coming up with a viable business in their core markets,” Egelanian said. In [Q4 2024, Macy’s comparable sales were down 1.9% on an owned basis, Bloomingdale’s owned comparable sales grew by 4.8%, and Bluemercury net sales increased by 6.2% on an owned basis.

*The rise of small-format stores signals a significant shift in how department store operators rethink their presence, purpose, and profitability. Whether positioned as service hubs, curated local experiences, or omnichannel support centres, these formats reflect a broader desire to reconnect with customers on more relevant, agile, and cost-efficient terms. Nordstrom, Bloomingdale’s, Macy’s, and Magasin du Nord each approach the model differently, yet all seek to solve the same equation: how to remain visible, valuable, and viable in a world where footfall is unpredictable and digital expectations are high.

While the format shows promise, whether through Bloomie’s near-equal productivity on a fraction of the space, Nordstrom Local’s customer engagement metrics, or Magasin du Nord’s local loyalty growth, questions remain about scalability, long-term efficiency, and strategic alignment. Other department stores have tried small-format stores such as Falabella in Chile and Peru. The strategy is paused for now due to the local market structure. In fact, growth is difficult in cities without stores, as there is no halo effect, contrary to Bloomie’s and Magasin du Nord's small stores. Ultimately, small-format stores are not a universal fix, but rather a strategic instrument whose performance depends on execution, contextual relevance, and alignment with broader company goals.*

Credits: IADS (Christine Montard)

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[This IADS Exclusive is the second part of a series of two dedicated to the Agile methodology]

Retail is changing faster than ever. Customers expect convenience, personalisation, and seamless shopping experiences, whether online or in-store. Technology is advancing rapidly, and market conditions are more unpredictable than ever. To keep up, retailers need to be agile, literally. Agile, originally created for software development, has become a game-changer in retail, helping businesses streamline operations, stay innovative, and improve customer experiences. This paper builds on IADS Exclusive:[Embracing Agile](https://www.iads.org/web/iads/10431-iads-exclusive-embracing-agile.php), which introduced the core principles of Agile and its growing importance in retail.

For Agile to work, companies must rethink how they operate. It’s not just about adopting a new system, it’s about fostering a culture of adaptability, teamwork, and continuous learning. Leaders set the tone by encouraging experimentation and collaboration, while teams embrace Agile frameworks like Scrum, Kanban, and Extreme Programming (XP) to improve efficiency and spark innovation. Retailers don’t need to completely restructure their organisations to adopt Agile. Instead, they can introduce Agile practices within specific projects, allowing them to gradually build a foundation for long-term flexibility and resilience.

Agile isn’t a magic solution, and challenges will arise, but when implemented effectively, it helps businesses respond faster to market changes, keep employees engaged, and deliver better customer experiences. In today’s retail landscape, agility isn’t optional, it’s essential.

What does implementation look like?

Agile at the leadership and team levels 

Leadership is pivotal in driving Agile adoption, setting the tone for transformation by establishing a sharp vision and fostering an environment that supports experimentation, learning, and adaptation. For Agile to succeed, senior management must be well-versed in its principles to ensure alignment with strategic goals. Leaders play a crucial role in promoting a culture where experimentation is encouraged, mistakes are seen as opportunities for growth, and ongoing refinement becomes second nature. One notable example is the John Lewis Partnership, where leadership spearheaded an Agile transformation in its IT department, empowering cross-functional teams to make decisions and collaborate closely.

The importance of leadership is also evident in recent retail successes. Effective Agile leadership requires not only strategic oversight but also accessibility and relatability. Leaders should actively reinforce organisational values while communicating Agile’s capabilities in a way that resonates with employees. By doing so, they build trust across teams, ensure alignment with strategic objectives, and foster a collaborative culture that supports Agile’s core principles.

Agile’s strength lies in its adaptability across retail teams, from marketing to operations. Cross-functional teams practising Agile can quickly respond to changes in demand or trends, leveraging tools like sprints, stand-ups for team alignment, and retrospectives for continuous learning and improvement. Agile ceremonies, such as sprint planning, stand-ups, and retrospectives, provide a structured rhythm that promotes collaboration and ongoing growth. They ensure teams remain adaptable and iterative in their approach, enabling them to maintain focus while driving innovation and efficiency.

Kanban, scrum, and beyond 

It’s all about being dynamic, being able to go with the flow depending on what is the root for a change in a project. One thing that is important to understand is the Agile framework works as an umbrella for several different variations. Teams need to assess which variation best suits their needs and, when circumstance change, take an Agile approach by shifting to a different methodology that’s a better fit. Here’s a breakdown of a few of the most common Agile methodologies and ideas for retail:

• Kanban

• A highly visual approach to Agile that helps teams manage workflows and improve efficiency. Using Kanban boards—whether physical or digital—tasks are tracked through stages such as “To Do,” “In Progress,” and “Completed.” This visualisation ensures teams can easily identify bottlenecks and streamline processes.
• For retail, Kanban is particularly useful in areas such as inventory management, marketing campaigns, and supply chain operations, where real-time updates and task prioritisation are crucial.

- Scrum 

• One of the most popular Agile methodologies, especially for small teams. It organises work into short, focused cycles called sprints, with each sprint lasting a few weeks. Scrum is led by a Scrum Master, whose role is to remove obstacles and keep the team focused on their goals. Daily stand-up meetings ensure alignment, and retrospective sessions after each sprint encourage progressive advancement.
• In retail, Scrum is effective for initiatives such as launching fresh marketing campaigns, improving customer service processes, or developing digital features for e-commerce platforms.

• Extreme programming (XP) 

• Typically used in software development, extreme programming is a methodology focused on high-quality deliverables through frequent iterations and technical excellence. While initially designed for software development, its principles can be applied to retail technology projects.
• XP can help refine mobile app features or improve the functionality of e-commerce websites, ensuring technical systems align seamlessly with customer needs.

• Adaptive project framework (APF) 

• Also known as Adaptive project management (APM), is designed to handle projects where unknown factors or changing resources are common. This methodology focuses on real-time adjustments to budgets, timelines, or team dynamics as they evolve. APF prioritises the resources available at any given time rather than what might be ideal.
• Retailers can use APF to pilot new technologies, develop omnichannel solutions, or adapt to unforeseen challenges in customer-facing projects.

• Extreme project management (XPM) 

• Often used for extraordinarily complex projects with significant uncertainty, it emphasises frequent adjustments and short sprints, allowing teams to pivot strategies quickly as conditions change. This methodology encourages trial-and-error problem-solving and multiple iterations to refine approaches.
• In retail, XPM is well-suited for navigating unpredictable scenarios, such as entering new markets, handling volatile supply chain disruptions, or launching flagship stores with experimental formats.

• Adaptive software development (ASD) 

• Focuses on endless adaptation and improvement, enabling teams to adjust quickly to changing requirements. Its three overlapping phases—speculate, collaborate, and learn—encourage teams to identify and resolve issues in real-time.
• Retailers can leverage ASD to optimise loyalty programs, enhance in-store technologies, or refine customer engagement strategies. Its iterative and non-linear approach makes it particularly effective for projects where requirements are fluid.

• Dynamic systems development method (DSDM) 

• Provides a structured approach to managing the entire project lifecycle. It consists of four main phases: feasibility and business study, functional modelling or prototype iteration, design and build iteration, and implementation.
• Retailers can apply DSDM to large-scale initiatives, such as rolling out enterprise resource planning (ERP) systems or implementing complex supply chain solutions.

• Feature driven development (FDD) 

• Feature Driven Development blends different Agile best practices while focusing on specific features of a project. It emphasises frequent updates and prioritises customer input, ensuring that developed features align with user needs.
• In retail, FDD is particularly useful for refining e-commerce platforms or customising product offerings based on consumer feedback. Its iterative nature also allows teams to address errors and implement fixes quickly, ensuring continuous progress.

Agile methodologies provide retailers with powerful tools to navigate a fast-paced, ever-changing environment. As a result of leveraging methodologies like Kanban, Scrum, XP, APF, XPM, ASD, DSDM, and FDD, teams can enhance flexibility, drive innovation, and improve operational efficiency. Each methodology offers distinct advantages, allowing retailers to choose the approach that best suits their specific project requirements.

Overcoming challenges in agile adoption 

Adopting Agile in retail comes with challenges such as resistance to change, silos between departments, and difficulties in scaling Agile practices. Strategies to overcome these challenges include change management initiatives, training programmes, and fostering a culture of openness and collaboration. It is essential to reassure employees that Agile is not a siloed experiment but a supported initiative from top to bottom, encouraging a culture where mistakes are seen as opportunities for growth and improvement.

Resistance to change often stems from uncertainty or unfamiliarity with new processes. Providing clear communication about Agile’s purpose and ongoing support from leadership helps alleviate concerns and build trust across teams. Addressing departmental silos involves integrating new systems and encouraging cross-functional collaboration to ensure alignment from top to bottom.

NuOrder’s comprehensive research highlights these challenges and how leading retailers are overcoming them. Insights from senior retail leaders at major department stores emphasise three critical focus areas: improving customer engagement, streamlining operations, and optimising product assortments. The findings reveal that while personalisation remains essential, supply chain innovations often yield more immediate profitability gains. This suggests that Agile implementation should prioritise operational efficiencies alongside customer experience improvements.

Ultimately, overcoming these challenges requires a concerted effort to build an Agile-friendly culture that empowers employees, promotes collaboration, and leverages Agile principles to adapt and thrive in the fast-paced retail environment.

The benefits of Agile in retail

Enhanced customer and employee experiences 

Agile empowers retailers to respond swiftly to customer needs by delivering personalised and timely offerings. For instance, Amazon’sadoption of small, autonomous teams and continuous deployment enables the company to innovate rapidly, adapt to evolving preferences, and maintain a seamless, up-to-date customer experience. These practices enhance customer satisfaction by ensuring offerings are tailored and relevant.

Beyond customer-facing benefits, Agile’s collaborative nature fosters stronger employee engagement. By creating an environment of teamwork and shared responsibility, employees feel more connected to their roles, which translates into higher satisfaction and productivity. This connection between employee satisfaction and customer loyalty underscores the transformative potential of Agile, as motivated employees are better equipped to deliver exceptional service and drive positive customer experiences.

One of the unique aspects is that teams can focus on customer needs much more closely than other industries. With the rise of cloud-based software, teams can quickly gather feedback directly from customers, facilitating rapid adjustments and improvements. Retailers are already tapping into this with the rise of e-commerce and online offerings, alongside increased investment in enhancing the online experience. Customer satisfaction is a key driver for software development and retail, it’s easy to see why it is included in the Agile process. Through customer collaboration, Agile teams can prioritise features focused on customer needs. When those needs change teams can take an Agile approach and shift to a different project.

Faster time to market 

It’s all in the name, the reason why they call it Agile methodology. Being able to shift strategies quickly, without a hitch or disturbing the flow of a project is one of the main benefits of using Agile processes. Retail, like software, is constantly changing, and project needs must adapt with it. As previously pointed out, this is the prime reason linear project management methods like the waterfall model are less effective.

Since phases in the traditional waterfall method flow into one another, shifting strategies is challenging and can disrupt the rest of the project roadmap. Software development is a much more adaptable field, project managing rapid changes in the traditional sense can be challenging which is why Agile is favoured. Retailers and department stores could take notes from this community to better adapt to rapid changed in the market and drive more effective, customer-focused results.

Agile teams can rapidly develop and launch new products, campaigns, or services, staying ahead of competitors. Target's adoption of Agile in its marketing department allowed the company to launch campaigns more quickly and with greater alignment to customer needs, improving overall effectiveness and return on investment.

Recent industry developments demonstrate how Agile methodologies accelerate market responsiveness. As observed in May 2024, department stores are actively rebuilding for success in the digital world, with emphasis on the rapid deployment of digital capabilities and faster response to market changes. The phygital revolution documented in September 2024 shows how retailers leveraging Agile principles can more quickly integrate physical and digital experiences, leading to enhanced customer engagement and operational efficiency.

Continuous innovation and improvement 

Agile fosters a culture of continuous learning and innovation, enabling retailers to adapt swiftly to latest trends and technologies. Through feedback loops, Agile allows companies to refine processes, products, and services constantly, ensuring they remain competitive in a rapidly evolving market.

The transformation of retail through Agile principles is evidenced by several recent success stories. Macy's "Bold New Chapter" initiative, revealed in November 2024, demonstrates  how iterative improvement and customer-centric approaches drive successful transformation. The broader industry shift toward phygital retail experiences validates that Agile methodologies are essential for modern retail success, merging physical and digital touchpoints seamlessly. These developments highlight that Agile adoption in retail is not merely a passing trend but a foundational shift in how successful retailers operate and evolve.

Agile isn’t merely a set of processes or a trendy buzzword, it’s a mindset that transforms how retailers operate. Organisations that fully integrate Agile principles transcend reactive business models, instead leveraging change as a strategic asset. Agile empowers retailers to recalibrate swiftly in response to evolving consumer behaviours, optimise operational frameworks, and establish enduring customer relationships.

Frameworks such as Scrum, Kanban, and Adaptive Project Framework (APF) empower retailers to create flexible workflows, make faster decisions, and drive continuous improvement. Dismantling rigid operational structures, fostering interdisciplinary collaboration, and embedding iterative problem-solving into core strategies enables businesses to cultivate an environment of resilience and innovation. In an industry where volatility is a defining characteristic, Agile serves as a mechanism for converting uncertainty into strategic advantage, equipping retailers with the dexterity needed to thrive in complex market ecosystems.

As discussed in IADS Exclusive: Embracing Agile* adopting Agile goes beyond simply improving efficiency, it reshapes how businesses function in an increasingly competitive and fast-moving retail environment. Companies that fully integrate Agile methods don’t just adapt to industry disruptions; they actively shape the future of retail by setting new standards for flexibility, innovation, and customer-driven decision-making.*

Credits: IADS (Maya Sankoh)

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*[This IADS Exclusive is the first part of a series of two dedicated to the Agile methodology]

What began as a methodology for software development, Agile is making waves across industries, like retail, driving a shift in how businesses approach innovation, customer experience, and streamline operations.*

*Agile methodology, characterised by iterative development, collaboration, and responsiveness to change, has found fertile ground in retail operations. Unlike traditional project management approaches, it prioritises flexibility and continuous improvement, enabling retailers to adapt quickly to fluctuating market conditions and shifting consumer preferences. Its application spans product development, marketing, inventory management, and customer service, offering a comprehensive framework for retail innovation.

This transformation reflects a departure from static, linear strategies, in favour of a more dynamic and iterative approach to problem-solving. While retail companies will continue to evolve in parallel to advancements in technology, changes in management strategies, culture, etc.; their ability to adapt and respond swiftly (or not) will be the critical point of differentiation between success and failure a defining trait of success, now more than ever.*

Understanding Agile in the retail context

What is Agile?

Agile methodology emerged from software development as a framework focused on iterative progress, collaboration, and adaptability. Conventional linear project management approaches follow rigid sequences of planning and execution. Agile, on the other hand, prioritises flexibility, iterative problem solving and responsiveness to change. This project management framework breaks projects into several dynamic phases, commonly called sprints. It allows teams the grace to quickly pivot and address challenges as they arise, fostering an environment of continuous learning and innovation.

This methodology originates from The Agile Manifesto1 , published in 2001 by seventeen software developers, focusing on four core values and 12 principles. These developers needed an alternative to linear product development processes. If reshaped for retail context, thus Agile retail values and principles would be:

Values

1. Individuals over processes and tools: Teams value collaboration and teamwork over working independently or doing things “by the book.”
2. Functioning strategies over comprehensive documentation: The project should work! Additional tasks such as documenting are less important than development.
3. Customer collaboration over contract negotiations: Customers are the stars within Agile methodology. Agile teams allow customers to guide where the project should go, so it beats tweaking details of contract negotiations.
4. Responding to change over following a plan: As echoed previously, one of the biggest benefits of Agile is that is allows teams to be flexible. This framework enables teams to quickly shift strategies and workflows without disrupting an entire project.

Principles

1. Satisfy customers through early and continuous improvement.
2. Welcome changing requirements, even late in the project.
3. Deliver value frequently.
4. Break silos of your project.
5. Face to face is the most effective way to communicate.
6. Build projects around motivated individuals.
7. Working strategies are the primary measure of progress.
8. Maintain a sustainable work pace.
9. Continuous excellence enhances agility.
10. Simplicity is essential.
11. Self-organising teams generate the most value.
12. Regularly reflect and adjust your way oof work to boost effectivenes

The four values of Agile are like the roots of a tree, deeply embedded and providing the strength and nourishment needed for growth. The twelve principles are the branches that grow from these roots, flexible yet sturdy, reaching outward to adapt to the environment. Just as a tree’s branches can grow in different directions to suit its surroundings, these principles can be shaped and adapted to meet the unique needs of any team.

In retail, these principles reshape operations by enabling faster decision-making and streamlined workflows. After every sprint, teams reflect to identify room for improvement so they may adjust their strategy for the next phase or sprint. This empowers teams to break down complex projects into manageable increments, enabling them to deliver results quickly while constantly refining their processes and strategies based on feedback. This approach accelerates time-to-market for products and services and ensures that offerings remain closely aligned with shifting consumer preferences and market dynamics.

Retail has reached its Agile moment. The post-pandemic era has seen the convergence of mobile commerce, customer-centricity, and operational volatility, making agility a synonym for resilience. According to McKinsey & Company’s report on retail agility, enterprise-level agility is key to navigating the challenges posed by global disruptions and rapidly shifting consumer behaviours. Retailers like Walmart have integrated Agile practices into supply chain operations, enabling faster decision-making and real-time adjustments in response to demand fluctuations. This agility has proven essential in managing complex logistical challenges while maintaining customer satisfaction.

The relevance of Agile to retail

The demand for speed and flexibility in retail is driven by changing consumer expectations, technological advancements, and market competition. The COVID-19 pandemic served as a catalyst for adopting Agile practices, pushing businesses to explore new approaches that fostered progress, innovation, and creativity under challenging conditions.

Case examples:

• Sainsbury's leveraged Agile to modernise its legacy workflows, enabling it to enhance digital capabilities and adapt quickly to customer needs. This demonstrates the significance of Agile in retail's digital transformation.
• Breuninger's successful transformation into a digital multi-channel retailer showcases how Agile principles enabled rapid adaptation, resulting in online sales reaching 50% of total revenue.
• Macy's innovative strategy implementation shows how iterative testing through their "First 50" stores programme has led to measurable sales and customer service metrics improvements.
• H&M has adopted a hybrid Agile model, blending Agile practices with traditional operations. By doing so, the company ensures cross-functional collaboration and rapid prototyping of in-store technologies like interactive mirrors and personalised shopping assistants.

Beyond operational improvements, Agile's importance includes retail’s broader digital transformation efforts. Its origins in software engineering make Agile an intuitive fit for managing technological initiatives, such as the integration of AI and data-driven decision-making tools. Innovations in software and AI are owed much to Agile’s approach, which allows projects to advance as soon as a success threshold is met, moving straight into implementation. This is bolstered by a constant feedback loop between the customer and teams, ensuring ongoing refinement throughout the project lifecycle.

By fostering seamless collaboration and iterative problem-solving, Agile provides retailers with a holistic framework for managing complex digital ecosystems while keeping pace with innovation2.  Furthermore, Agile’s core principles (flexibility, collaboration, and continuous improvement) support a customer-centric mindset essential in modern retail. Whether responding to real-time feedback, launching targeted marketing campaigns, or refining product offerings, Agile empowers retailers to remain nimble and responsive3.

Agile as a cultural shift

Adopting Agile is not just about new processes; it requires a cultural shift. It demands collaboration, customer-centricity, and constant improvement. For employees, this shift translates into greater autonomy, heightened responsibility, and a renewed sense of purpose, fostering accountability and pride in their work. This cultural alignment is crucial as younger generations entering the workforce expect workplaces that fuel their passions and reflect their values.

The key cultural transformations it involves are:

• Employee empowerment: Teams gain autonomy and accountability, fostering pride in their work.
• Collaboration: Breaking down silos encourages knowledge sharing across departments.
• Purpose-driven work: Employees increasingly seek roles that align with their values and passions, especially post-pandemic.

However, a multigenerational workforce presents unique challenges:

• Older employees may resist change or lack familiarity with Agile practices.
• Younger employees prioritise meaningful work over job security, often seeking entrepreneurial opportunities if their needs are unmet.

Agile’s success lies in its ability to transform workplace cultures into ones where feedback and adaptability are normalised. This cultural change resonates with a multigenerational workforce, as younger employees gravitate toward purpose-driven environments while older employees benefit from structured but flexible mentoring opportunities. For retailers, aligning Agile practices with company values creates a culture of trust and collaboration that attracts and retains top talent. When implemented thoughtfully, Agile bridges generational gaps, fostering shared learning and a sense of purpose among all employees.

*The adoption of Agile methodologies in retail is not just a passing trend, it’s a strategic necessity in today’s fast-paced, digitally driven world. As digital advancements, the rise of AI, and the constant need to stay relevant reshape the industry, Agile offers retailers a way to thrive by supporting adaptability and innovation. The key takeaway is this: retailers don’t need to overhaul their organisational structures to embrace Agile completely; instead, they can start by implementing Agile practices in specific projects to build a foundation for long-term flexibility and resilience. Agile’s emphasis on collaboration, accountability, and iterative improvement empowers retailers to respond effectively to unpredictable market changes. Fostering environments where cross-functional teams adapt quickly and align with customer needs enables retailers to drive sustainable growth while enhancing both customer and employee experiences. Ultimately, an Agile organisation becomes the optimal goal, because in an unpredictable market, the ability to adapt is the only way to stay ahead.

Retail leaders are encouraged to explore Agile methodologies as a transformative approach that ensures relevance and resilience in an ever-evolving landscape. Identifying existing practices that align with Agile principles and implementing them in the right projects positions retailers for long-term success—driving innovation, overcoming challenges, and confidently adapting to the future*

1: The Agile Alliance, “The Agile Manifesto,” August 2001.

Andrey Hristov, “The Agile Manifesto,” SD Magazine, August 2001.

2 : Stine Rømmen Anderssen, Guilherme Riederer, and Ahmad Zaidi, “In Search of Speed: A New Way for Retailers to Organize,” McKinsey & Company, October 15, 2021.

3: “Benefits of Agile Methodology in Retail.” SkillNet Solutions, November 5, 2024.

Credits: IADS (Maya Sankoh)

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CHECK OUT THE PHOTOS OF LA RINASCENTE

La Rinascente, a member of the IADS for 49 years until 2008, was purchased by Central Retail Corporation in 2011. It remains the only European department store company under Central Retail (also including Central Department Store, Robinson Department Store, Supersports, CMG), as the other companies in the European portfolio belong to the Central Department Store business unit.

Since the acquisition, it has followed an active strategy of going upmarket, not only to differentiate from the only other Italian competitor (Coin) but also to take advantage of the specificities of the Italian market, especially its strong tourism basei : the flagship store in Milan, which accounts for more than half of the group’s turnover, is a must-see for any foreign visitor.

Now, with nine stores across Italy, the company is doing well: it announced record 2023 sales, reaching 1bn€, a hefty +14% increase from the previous record set in 2019. After conducting an extensive campaign of store openings and renovations across its store fleet between 2017 and 2023, the company announced at the end of 2024 the acquisition of “Odeon”, a former 3,000 sqm cinema in Milan, to be refurbished and host the Duomo flagship store cosmetics offer by mid-2027

Taking the opportunity of a partner visit in Milan, the IADS visited the store last Christmas to assess the current situation.

A flaming debut

“La Rinascente” is the company's second name, which was initially called Aux Villes d’Italie in 1877, to be Italianised in 1880 (Alle Città d’Italia).

Everything started in 1865 when the Bocconi brothers opened a small clothing store selling men’s suits in Milan. Success was immediate, and branches were opened in Rome, Genova, Trieste, Palermo and Turin. The Milan operations morphed into a department store in 1877 as the Bocconi inspired themselves from Boucicault’s Au Bon Marché, only to be transferred to the current location in Piazza Duomo in 1889.

Following a bustling but poorly funded expansion, aggravated by WWI, the Bocconi brothers sold the business in 1917 to Senatore Borletti, a member of the second generation of the iconic Italian entrepreneurial dynasty (Maurizio Borletti, a fifth-generation member, was President of La Rinascente between 2005 and 2011). As soon as the acquisition was finalised, Borletti asked Italian poet Gabriele D’Annunzio to come up with a new name: La Rinascente was registered in September 1917, to offer high-quality products at reasonable prices to the then-emerging middle class. What could have been a simple rebranding became a prophecy in December 1918 when the Milan store was burnt to ashes in a fire just before its grand reopening, calling for a new debut and injecting a new meaning into the company's name.

While the Milan store was being rebuilt, Borletti focused on revamping the existing seven stores (Turin, Genova, Bologna, Florence, Rome, Naples, Palermo) between 1919 and 1920, and opened new ones: Padova (1923), Catania (1923), Messina (1924), Bari (1925), Piazza Loreto in Milan, Corso Vittorio Emanuele II in Rome, Taranto, Syracuse, and Trapani (all between 1927 and 1928). However, innovation began in the Piazza Duomo store: it reopened with innovative services for the era (a bank, a hair salon, a tea room and a post office) in 1921.

In the same year when IADS was created, La Rinascente teamed up with German-based department store company Leonhard Tietz (another IADS member from 1930 to 1939) to create “Unico Prezzo Italiano Milano”, a fixed-priced store known as UPIM, in 1928. It shortly merged with UPIM into a new company, of which the Swiss-based department store Jelmoli was a shareholder. This period also corresponds with an optimisation of the store fleet: the new company counted in 1931 five Rinascente stores and 25 UPIM ones, and in 1941, 52 UPIM stores and five Rinascente units.

WWII hit the company badly: Genova, Cagliaro and the Milano Duomo stores were destroyed, and only the Rome store and 37 UPIM units remained operational at the end of the war. Recovery was quick: the Duomo store reopened in 1950, with a façade designed by Ferdinando Reggiori and the windows by Carlo Pagani. The company thrived in the post-war period under the watch of the Borletti clan: Umberto Brustio, Senatore Borletti’s son-in-law, took the rein at the death of the latter in 1939, and then Aldo Borletti, Senatore’s son, took over in 1957. It was all about culture: La Rinascente was famous for its events dedicated to countries (Spain, Japan, Mexico…) and also for launching the world-famous Compasso d’Oro design award in 1954, in a move similar to what Galeries Lafayette and Printemps did in the 1930s.

In 1961, La Rinascente group diversified by creating the SMA Supermarket chain, following a national craze for this new distribution format introduced in Italy in 1957. The Borletti family sold the group, composed of five La Rinascente, 150 UPIM stores and 54 SMA Supermarkets, to the Agnelli’s investment vehicle (the founders of FIAT), and the Mediobanca bank. It opened a period of rapid expansion: a new hypermarket format in 1972, the acquisition of JC Penney’s Italy in 1977 (four stores), a new DYI format in 1983, until the FIAT group split in 2005 and the Rinascente group restructured under the helm of ‘Associated Investors Group’, composed of Italian investors including Maurizio Borletti. With the help of Vittorio Radice, the GM, La Rinascente revamped the Milano Duomo store with international architects renovating each floor in 2006 (India Madhavi for the ground floor, Studio Mumbai for the first floor, Rodolfo Dordoni for the second floor and Vincent Van Duysen for the third one, with plans to continue upwards), the opening of a food hall in 2007 and the “Design Supermarket”, a new lifestyle retail space, in 2009.

The company was sold to Central Retail Corporation in 2011 for €205m (after divesting from UPIM in 2010, which was sold to Coin), with a plan to expand its store coverage in Italy. New stores opened in Rome (2017), Turin (2019), and Florence (2020), expanding the network to 9 units in Italy located in 8 cities, ranging between 3,000 and 22,000 sqm.

The Rinascente business unit achieved 1bn€ in sales in 2023, with all stores growing over 2022 (including Milan, +19%) and a significant EBITDA growth of +70%. Luxury accessories and beauty are among the top-performing categories for the chain, which is characterised by a particular store layout policy: each floor is conceived and designed by a specific architect or designer. Twenty architects contributed to the renovation (or the creation) of the Turin, Florence, Milan Duomo and the two Rome stores between 2017 and today. Consequently, each store experience is unique (a feat also echoed by a careful integration into the local activities, such as the Rinascente Florence store partnership with the Pitti show) and relates well to the notion of Italian design and arte de vivere that the chain advertises. No wonder the CEO Pierluigi Cocchini talks about a “collection of department stores” rather than a chain, with each store unique in its design and offering.

Central Retail Corporation has brought La Rinascente to international fame and recognition through the launch of “Rinascente on Demand”, a chat and shop Whatsapp-based service launched in 2020 that connects global customers with staff located in Italy and ships internationally. The group claims to have achieved 45m€ in omnichannel sales in 2023.

The 22,000 sqm Milan Duomo flagship store, which draws in 8.3m visitors a year and represents more than half of the group’s revenue, announced at the end of 2024 the opening of a new unit in a former cinema, the Odeon, planned for 2027. The plan is to transfer 300+ make-up, skincare and fragrance brands, which are currently presented on the ground floor of the main building and in the Annex, to a three-floor unit of 3,200 sqm. In doing so, the company hopes to attract 3m visitors a year and expand the beauty business to 80m€ in the first year, from 50m€ in the Milan store today, and a total target of 130m€+. This will also allow the main store to evolve by reallocating the cosmetics space to luxury accessories and jewellery, doubling it to 2,150 sqm and potentially enabling the business to grow from 200m€ to 370m€.

The total investment announced is 40m€, including 30m€ for the Odeon project and 10m€ for the revamp of the ground floor in the Duomo building.

Visiting La Rinascente

La Rinascente was one of Europe's first luxury department stores to offer full takeovers to luxury brands, often with great results. No wonder, therefore, that, at the time of the visit (Christmas 2024), the store was fully decorated with Dior Parfums decors and branding on the façade and windows, complete with a pop-up in the basement of the department store. Interestingly, this collaboration with La Rinascente was only part of Dior Parfum’s plan, as the brand also sponsored the Christmas tree in the Galleria Vittorio Emanuele IIii .

The ground floor felt as cramped and packed as usual. In some ways, the structure of the building helps, as the surface is not that big, and the store feels larger than what it is. Consequently, the store quickly feels buzzy and energetic thanks to a crowded ground floor (but this feeling may evaporate when visiting the upper floors). Designed in 2006 by India Madhavi (and planned for a revamp once the Odeon new space is open), the floor is dedicated to cosmetics, fragrances, watches, and Louis Vuitton’s accessories that are displayed in a double-deck store (also accessible from the mezzanine).

The basement, which was renovated in 2009 with the “Design Supermarket” opening, is exciting, as it mixes F&B, luggage, design and art de vivre, tech, and plants. Except the Dior Parfum pop-up in the middle, which felt a bit out of place, located between Design and Izipizi sunglasses displays, the interesting part is coming from the fact that the whole floor offer feels natural and not artificially juxtaposed. In fact, la Rinascente considers that the Design Supermarket should combine design, luggage and sustainable living as one topic. Therefore, all categories are mingling well, including luggage, which is an interesting place to look at. Luggage is also cleverly located next to a space dedicated to La Rinascente-logoed items, playing on humour and Italy-centric nostalgia. For the same reason, some brand adjacencies, which might look surprising at first glance, make sense: Rimowa is located between Sonos, Vitra and Bang&Olufsen and not in the luggage section, as the brand is taken from its lifestyle angle. Finally, it is also possible to buy plants in a dedicated section facing the restaurant and café, bringing a feeling of nature in a fully artificial, underground environment without natural light.

The mezzanine, designed by India Madhavi, displays luxury items and accessories and felt empty at the time of visit (one week before Christmas) even though the ground floor was packed. On that floor, there is a multi-brand section dedicated to brands ranging from Longchamp to Versace and Givenchy, that also boasts a large Santa Maria Novella stand, the only brand selling perfumes at this floor.

The first floor is dedicated to men’s luxury and was designed in 2006 by Studio Mumbai. The second floor, designed in 2006 by Rodolfo Dordoni and redone in 2023 by Studio Andrew Trotter, is also dedicated to menswear and accessories. Interestingly, it is obvious that the focus was placed on giving a sense of natural lighting on the floor, but at the detriment of products: the white zenithal lighting gives a nice outdoorsy feeling but prevents highlighting a section or a product in particular.

The third floor, designed by Vincent Van Duysen in 2006 and dedicated to luxury womenswear, shoes and accessories, is more coherent from a lighting point of view and offers a rather classical use of branded low-rise display units. This gives a much-needed sense of space on a floor where the ceiling's low height is felt. The fourth and fifth floors, dedicated to other women categories, were designed by Studiopepe in 2021 for the fourth level and David Chipperfield in 2020 for the fifth floor. Some brand adjacencies are interesting, such as a selection of sports shoes and sneakers from Autry, located between Rag & Bone and Max Mara.

The sixth floor is dedicated to homeware, including bed accessories and tableware. The seventh floor mixes gourmet food, seasonal animation and rooftop bars and restaurants (an astute way to make sure that the traffic will flow vertically throughout the store – perhaps a reason why the lifts are not so efficient, and customers are often taking the escalators to go up). At the time of the visit (Christmas), a significant space of 60sqm+ was dedicated to panettones (traditional festive cakes) at the escalator exit, including branded-themed locations, suggesting that La Rinascente maximises its impact to its touristic clientele by selling a selection of products ranging from small souvenirs and entry-price point Italian food to higher ticket items.

Is Milan an ideal ecosystem for a free-standing department store?

Milan is a global hub for shopping, calling in for the latest retail mono-brand concepts. As a consequence, the cost of real estate is high. After remaining the second or third most expensive retail street in the world for years, Via Montenapoleone is now the most expensive one, topping up 5th Avenue in New York.

Milan is ambitious, too: the city is readying for the 2026 Winter Olympic games and is also looking at ambitious new projects, such as the Milano Santa Giulia mixed-use project, a 110-hectare area planned for 2034 that will add 80,000 sqm of retail space, with an investment of €4bn.

However, the city seems more a haven for mono-brand concepts than multi-brand retail, which does not fare well outside of La Rinascente.

The iconic 10 Corso Como, founded in 1991 by Carla Sozzani, was sold in 2020 to Bergamo-based retailer Tiziana Fausti, who has since then focused on international expansion while radically changing the store concept in Milan to make it more modern (the new concept was unveiled in September 2024), but probably losing some soul in the process as the store lost its specific touch (see pictures).

In a similar move, luxury fashion multi-brand retailer Antonia also focuses on Asian development. While it keeps its two locations in Milan (the latest opening in 2022), Antonia has scaled down its Italian operations, including the collaboration with Excelsior, the luxury department store launched by Coin in 2011, that she stopped in 2017 (Antonia Giacinti, Antonia’s owner, was Excelsior’s artistic director from 2011 to 2017). Excelsior itself closed its location in Milan at the end of 2018. Coin announced in 2023 that Excelsior would reopen inside a new mixed-use retail centre, The Medelan, however this is still not the case at the time of writing.

In short, La Rinascente enjoys a competitive advantage thanks to its scale. There is no real fullfrontal competition in town, with a few exceptions that cannot match the size and firepower of the department store. From that perspective, Milan is a particularity in Italy, where 52% of the luxury turnover is done through a historical network of 220 multi-brand stores nationwide, and in the world, where most, if not all, of the fashion and luxury hubs in capital cities include more than one department store.

Overall, while La Rinascente felt very efficient in attracting and entertaining a crowd mixing tourists and Italian visitors, thanks to some interesting features -especially in the basement and the top floor- it also gave a sense of its age, especially on the floors that have not been renovated recently. From the lighting perspective, the usage of space and volumes, and the store structure itselfiii , the visit left a state of disappointment in the store experience, especially after seeing the stores in other Italian cities.

In addition, using different architects for each floor leads to a very incoherent feeling that is more visible in this store than in the others, as it mixes non-renovated spaces with recently revamped ones.

While this fortunately does not translate into sales performance, more space and a store rejuvenation would be welcome as the store's sales keep growing. For that reason, the announcement of the Odeon space and the parallel revamp of the Duomo store will be worth watching, not only to understand the CEO’s vision for the company but, most importantly, as it will for sure add to the Milanese experience even more than what it is today. The only caveat is that one may wonder if an investment of €10m for the ground floor will suffice to give a complete sense of newness or if this is only the beginning of a grander plan to continue enhancing this world-class flagship location.

i: This is a synergy Central Retail plays with Thailand, which explains why La Rinascente is included in its “The 1” loyalty program.

ii : This shopping arcade links Piazza del Duomo with the Teatro alla Scala theatre.

iii: A topic where nothing much can be done, given the fact that the building itself is a protected monument

Credits: IADS (Selvane Mohandas du Ménil)

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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)

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Every IADS event is designed to allow the Association members to learn from each other, and the General Assembly is no exception. This is why the 2024 edition took place in Türkiye. It was the perfect opportunity for one of the IADS’ newest members, Boyner Grup, to showcase the progress made since the COVID-19 pandemic and how it radically reinvented itself to adapt to the new market conditions.

The text below is a synthesis of two presentations made by Nurçin Koçoğlu, CMO, and Efsun Janset Yilmaz, E-commerce Deputy General Manager, to explain the extent to which Boyner's transformation process has challenged the company's structures and successfully reimagined every touchpoint with its customers.

It has been stripped of confidential information, including the Q&A section, which IADS members can find in the meeting recap related to the 2024 General Assembly on the IADS Website.

When times change, retailers need to do the same… but how? Boyner has a method.

Boyner has always been proud of its customer-centricity, and the group has often been the most innovative in Türkiye. In addition to being the first department store in the country, it introduced the first instalment credit card in 1998 and was also the first retailer to offer customer assistance in 2003. Given that the COVID-19 pandemic significantly changed consumer behaviour, especially among younger generations, the company recognised the need to recalibrate its foundation.

For this reason, Boyner embarked on a comprehensive study four years ago to decode their customers' emotional expectations. The findings revealed a desire for an immersive, boundaryless shopping experience that transcends traditional channel barriers. Customers were not merely looking for products, which was Boyner’s value proposition then, but seeking inspiration and an emotional connection akin to a seductive shopping experience.

The teams found that they had to develop new, transformational ideas to adapt. Boyner as a group had to transform itself if it wanted to go from retailer (selling products) to a “multi-brand lifestyle company” as it aimed to become, offering experiences and emotional engagement1.

To achieve this vision, Boyner launched a multi-level project in 2020 involving 120 team members across marketing, logistics, and cultural sectors to redefine the brand’s identity and experiential offerings. In addition to redefining the brand platform, values, and vision, they were tasked with imagining the company's future and presenting new ideas on every aspect of the business (including logistics, IT, marketing…, etc.) to the leadership monthly.

This reinvention was facilitated by Boyner's proprietary customer data, either directly or through its dedicated subsidiary, Hopi. It encouraged a transformation based on crafting individual interactions with customers at every step of their journey, from the store to the products offered, the digital ecosystem and how everything should interact.

A multi-layered approach for a new generation of stores 

The most visible result of this internal effort was the new store concept, with the first iteration implemented in Cadde. It took a bold approach, mixing art (including collaboration with 10 artists to decorate the store), sustainability (how the store was designed, built, and decorated), and a focus on sport and lifestyle to target younger customers.

However, the results of the study went deeper and involved more structural changes in the mindsets than simply a new store concept:

• Make the stores more experiential, planning to renovate 40% by 2024. To enhance the experience, Boyner struck a deal with Costa Coffee, a chain not present in Türkiye, to have their first store at the entrance of the new Boyner store, enticing customers with the smell of coffee. At Istinye Park, the second iteration of the new concept, Costa Coffee is integrated into the middle of the store to allow customers to relax during their purchases. Today, eight Costa Coffees have been deployed, always linked with Boyner stores.
• The introduction of Boyner Dynamic, addressing a new type of clientele by focusing on the active category,
• Collaborations with artists at the product level (launch of capsule collections) and when designing the new concept, with an art collection on display in the store, digital artworks, and a giant 3D screen. Customers can also customise their purchases and gifts. Consequently, stores feel as much like a gallery as a retail environment, designed to enrich the customer journey by stimulating all senses.
• New approach to community management with new types of events, such as the Boyner Dynamic Fest, designed to encourage interaction and inclusivity.

These changes had rapid effects: NPS in renovated stores increased by 24% on average.

A method to gather communities around the Boyner points of sales

Boyner’s community-driven events, including the Dynamic Fest and partnerships with sports and art communities, position the company as a lifestyle hub to align with modern consumers’ emphasis on experiences. The Dynamic Fest, which attracted 8,000 attendees this year (up from 7,000 last year), exemplifies Boyner’s efforts to build communities around shared interests. These events are co-created with brands and marketplace partners and designed to welcome everyone: customers can come with their friends, pets, and kids… the event had a satisfaction rating of 4.8 over five this year.

Coming to the notion of community, the Dynamic Festival is also a significant success for its disinterested approach: participants value this event for the connection and value-sharing it allows. This year, Boyner mitigates the cost by asking its partners to participate, including the marketplace brands. It is also a great opportunity to coupon special offers.

From intuition to data-driven decision-making 

Boyner's advanced data infrastructure underpins these initiatives, supporting real-time insights on their 4.4m active customers (out of a 12.1m customer base), predictive modelling, and micro-segmentation. The data strategy enhances Boyner's CRM and leverages AI for tasks like sentiment analysis in customer interactions, enabling faster responses to emerging issues. This AI and data science integration has allowed Boyner to optimise customer journeys, with 100 unique paths designed to cater to specific needs based on 154 micro attributes. It also allows “inspiration walls” powered by data.

Along with improving the customer journey, AI is deeply integrated into the company’s operation at every level. For instance, AI has been used to design a capsule collection of 32 products for Fabrica, a private label, reducing the design-to-market time from 3 to 1 month. Customer complaints are analysed and summarised weekly and forwarded to the relevant stores and contacts for action.

As a result, the customer base in the younger age segments has increased by 162% in 3 years, and 24% identify as Boyner-only customers.

Next year, the next step is to implement an approach similar to what is being done in private banking in terms of personalisation and tailor-made interactions, for online and in-store contact points with a 360° approach. It will be implemented in the loyalty scheme during the first quarter and in the omnichannel programme in the second one. By empowering sales staff with enriched customer data, Boyner aims to offer bespoke recommendations and exclusive offers, aligning perfectly with its mission to transform shopping into a memorable and meaningful experience while creating new revenue streams through more profitable omnichannel customers.

But how to reinvent itself online too?

Today, the online and omnichannel current situation at Boyner is as follows:

• 18% of total customers are considered “omnichannel” (+24% increase), who spend +35% in new concept “experience” stores and spend +25% more.
• 30% of total sales are made online and while time spent by users increased by +35%, unpaid traffic has also consistently increased by 30% over the past two years.
• 40% of total traffic is unpaid, with the goal to reach 50% next year (growth has exceeded +30% over the past two years due to using CRM), as this is a key element of Boyner’s strategy to mitigate rising user acquisition costs.

This is not an accident, as this stems from the changes brought to the business in the past years. Collaborations with sustainable and inclusive projects create emotional engagement (this approach is deeply ingrained in the organisation, as teams include a person contributing to sustainable and DEI initiatives). Boyner’s commitment to social responsibility and sustainability further enhances its brand value, especially among younger consumers who are increasingly purpose-driven.

In addition, hyper-personalisation is now integrated throughout an omnichannel journey, offering customised experiences and fostering deep customer loyalty, especially among younger consumers—a demographic that has grown significantly in Boyner’s base in recent years.

Boyner doubles down by deploying new initiatives:

• A new delivery channel, Boyner Now, offering a very energetic and much-appreciated service and experience coming as a complement to Boyner.com, the e-commerce arm,
• The launch of a marketplace,
• The launch of an influencer platform, Inclub,
• The systematic use of AI in various innovative activities related to e-commerce (customisation, gaming, efficiency, mostly).

A glimpse at Boyner Now

Boyner Now, launched in June 2022, is a fashion quick-commerce platform which addresses common online shopping challenges by offering same- (90 minutes) or next-day delivery options, enhancing convenience, and providing real-time tracking for customer satisfaction. The 'try before you buy' feature allows customers to receive products (used by 60% of customers), try them at home, and only pay for what they keep, with flexible payment options available (including paying on the spot via credit card to the delivery person). Despite a minimum delivery promise of 90 minutes, Boyner Now achieves an average delivery time of one hour, covering 40 locations with 25 stores, and grows by 20% per month.

The platform's sales account for 6% of Boyner's total, a significant achievement given its limited geographical reach compared to Boyner.com's nationwide presence. Boyner Now is performing especially well during the gifting season (sales are tripling) thanks to its ease of use (customers pick a product that is almost immediately delivered to their loved ones). This is why Boyner has developed an AI-powered gift assistant that simplifies the gifting process for customers (Now Gifting).

Understanding the marketplace strategy

In July 2024, Boyner expanded its digital footprint by launching a marketplace operation, adding over 500 new brands and 40 new categories to Boyner.com within three months. This marketplace includes popular fashion and lifestyle brands such as Dyson, Seiko, Casio, and Apple, which are unavailable in Boyner's physical stores. The marketplace aims to contribute 15-20% of Boyner's turnover in the coming year, and expansion to international brands is underway, hopefully contributing EUR 30m next year, after a year of existence.

Nurturing influencers with Inclub

Boyner's influencer platform, Inclub, launched as an MVP, which supports 200 influencers (influence marketing contributes 15% of sales, and Inclub is here to amplify this strategy). Onboarding has been designed to be extremely simple, and the app offers detailed reporting in real-time, allowing sales to be tracked. The next iteration of this idea will be to develop a system that will enable micro-influencers to sell products directly from Boyner’s website in 2025.

Going all-in with AI

Boyner is reimagining its website and app to create a more fashion-forward, content-rich, and interactive platform, positioning itself as a social commerce channel thanks to AI technologies. It is all about personalisation, gamification, and efficiency strategies:

The company's AI-driven projects include Türkiye's first AI-designed collection, developed in collaboration with Design Studio. This initiative reduces the design-to-production timeline from two to three months to just one month, resulting in an 80% sell-through rate for the 8,000 products manufactured (basic, clean looks, everyday products).

Additionally, Boyner utilises AI for demand forecasting and planning, allowing real-time capacity planning, monitoring demand and tracking allocations. This cascades to the customer level, with personalised shopping recommendations, enhancing the overall customer experience at checkout: AI helps Boyner make additional recommendations to customers (either based on the most successful items or the items viewed by the customer during the purchase journey) to suggest new styles, similar products, or complete the look.

AI is also infused into the customer experience through gamification, ensuring that every time the customer returns online, the experience differs and brings surprises. A hundred different journeys have been created and based on micro-segmentation of customer profiles, as identified using AI.

The search function being crucial in e-commerce, Boyner partners with Google, Meta, and TikTok, focusing on predictive audience analysis and creative enhancements. The company emphasises the importance of dynamic media and micro-segmentation in its digital marketing efforts, aiming to move away from static displays and deliver tailored messages across platforms. There is also an ongoing collaboration with Microsoft to implement natural language search.

Product reviews and comments are essential for Boyner, as they can increase conversion rates by 15-20% compared to products without comments. An AI-powered comment summariser helps condense customer feedback, making it easier for shoppers to make informed decisions. This is also contributing to significantly reduced return rates.

In an era defined by rapid shifts in consumer behavior and rising expectations, Boyner stands out as a retailer that has successfully transformed itself into a “multi-brand lifestyle company.” By embracing customer-centricity as its guiding principle, leveraging data and AI to personalise experiences, and creating immersive, emotion-rich store environments, Boyner has managed to engage younger audiences and deepen loyalty across its customer base. Its multifaceted strategy—reimagining physical spaces, building vibrant communities, expanding through marketplace offerings, and integrating influencer platforms—demonstrates how a legacy retailer can adapt and thrive in the age of omnichannel commerce. As Boyner continues to experiment, refine, and scale its innovative initiatives, its journey offers valuable insights into how retail can evolve to meet the evolving needs and desires of today’s consumers.

Credits: IADS (Selvane Mohandas du Ménil)

1We started to report this new strategy in 2022: <https://www.iads.org/web/iads/5469-iads-exclusive-boyner-the-multi-brand-lifestyle-company.php>

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The fastest growing major economy in the worldi, India has an unconventional approach to spending. Generally a saving economy, consumer spending around festivals in India is significantly boosted across categories like clothing, jewellery, groceries and confectionery, and luxury goods. The festival season in India refers to an approximately 45-day period starting in September with pre-festival sales and ending with Diwali, occurring usually at the end of October or the start of November. With a population of over a billion people, the consumer expenditure over this festival period is a key economic driver for the country.

Parallelly, the Indian retail industry is a major component of its economy (see our report following the Retailers Association of India presentation during the FIRA meeting in 2023 here). It contributes over 10% of the GDP and accounts for around 8% of employmentii. Combining a substantial middle class with increasing purchasing power and a largely unexplored retail market, India is a new favourite for global retail giants. This is evident with behemoths like IKEA, Decathlon and Sephora to name a few. Luxury brands have also garnered traction in the Indian market with the propensity of consumption for luxury goods in India rising with the expansion of the middle class. The advent of the Unified Payments Interface (UPI) transformed the Indian retail industry. UPI is a real-time digital payment system developed by the National Payments Corporation of India (NPCI) and regulated by the Reserve Bank of India (RBI). According to a PwC India report, UPI accounted for over 78% of total retail digital payments in India and expects that it will contribute 90% of total retail digital payments by 2026iii.

Experiences driving economic value

In this analysis, a festival refers to a day or period of celebration, typically for religious reasons. While Indian festivals are primarily religious, they are culturally significant and may have linkages across religious and regional communities. While Indian festivals occur throughout the year, festival season refers to a broadly two-month period (September and October, with the possibility of including the start of November) that covers a nine-day festival called Navratri (literally ‘nine nights’, it is known as Dussehra or Pujo in some parts of the country) followed by the five days of Diwali. In some states, this season can start as early as mid-August. The periods before and in between these festivals are also interpreted as festival season due to continuity and commercial activities.

The economic value of festivals in India is underscored by providing an experience that brings together over a billion people. These festivals combine:

• Co-creation: individual or community participation in various events like dances, music and other cultural activities,
• Storytelling: a religious or cultural narrative that surrounds the emergence and importance of the festival,
• Connection: broader community engagement through aesthetics, gifting, and so on,
• Escapism: a break from everyday life and connection with something larger than self,
• Loyalty: faithfulness to the concept ensuring ideological continuity.

![HBR Pine and Gilmore (1999)

Pine and Gilmore’s theory on the experience economy explains this further. Based on the four posited realms of an experience, each Indian festival is a vast enough concept to offer options for all possible combinations envisioned. For example, escapism is achieved at the intersection of active participation and immersion during Navratri by participating in traditional dances in large communal spaces. Each festival also requires its specific kind of decoration developing the aesthetic sense of the experience. During Diwali, the festival of lights and prosperity, places are decorated with various kinds of lights including traditional oil lamps, ‘diya’.

The theory goes on to expand on how experiences can command premium pricing as the most differentiated category of economic goods. While this theory revolves around companies selling experiences, it is applicable to the case of these large Indian festivals. From street hawkers to multinational companies, every seller commoditises festivals to increase sales.

Impact and adaptations

Indian festivals generate enormous primary and secondary economic activity. A significant amount of consumer goods categories such as garments, FMCG, jewellery, liquor, automobile, traditional industries and more make a notable portion of their sales (between 30 and 40% of sales for automobiles and appliances to as high as 50% on groceries and confectionary) during festival season. The country also has a significant informal market which is highly engaged during this time. Despite inflation, consumer spending during the 2024 festive season has remained steady with industries escalating their sales expectations and targets.

The Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) traditionally observe ‘muhurat trading’ which refers to a 60-minute window to trade on Diwali as the festival signifies prosperity and good luck. Various studies have been conducted to research the economic impact of festivals on stock indices with differing results. The broad consensus is that the pre-festival effect is significant due to the large quantities of products bought and sold. One study on the BSE indices over a three-month period shows that they absorb the effects around Diwaliiv.

It is around Diwali that most households purchase high-value items such as appliances, jewellery, smartphones and automobiles given the combination of auspicious timing for consumers and robust promotional offers. Around 30-40% of sales of automobiles occur during the festive seasonv. The appliance industry has also seen around 30% growth driven by e-commerce sales and heightened demand for premiumisation. Jewellery, another paramount sector, saw domestic prices surge by over 15%. However, the All India Gem and Jewellery Domestic Council (GJC) still anticipated a 30% increase in gold jewellery retail sales during the 2024 festive season. Local and international brands found new ways to combine luxury and affordability to engage customers.

International e-commerce platforms and brands in general have adapted their strategies to take advantage of the Indian festive season. For example, Amazon India in 2024 strengthened its workforce with around 110,000 new hires in tier two and three regions to meet festive demandvii. All global brands present in India have promotions and events during this period. This is also a time for new launches and campaigns, collector’s editions of luxury products, and specialised gifting.

The Indian diaspora also provides a notable market for Diwali-related products and events. For example, in the UK, the 2021 census showed that 3.1% (or approximately 1.86 million people) identified as having Indian ethnicity. In recent years, brands have also held Diwali events outside India with high-level diaspora and Indian invitees; Condé Nast Traveller and Cartier hosted a Diwali Ball in London studded with VIPs and artistsviii.

Business case: Amazon India

Amazon India is one of the best examples of an e-commerce brand adapting to the Indian market and its specificities. Amazon India launched the Amazon Great Indian Festival(AGIF) in 2015 which is now its biggest sale event of the year in India. What started off as a five-day sale in October, has surpassed itself year-on-year with a duration of over a month (between September 27 and October 29) in 2024, its best performing year so far.

Amazon India saw a 70% increase in sellers crossing INR 10 million (EUR 112,923) compared to 2023. Over 42,000 sellers experienced their highest-ever single-day sales during this period. The usage of Amazon Pay ICICI Bank credit card surged 50% over last year. One-third of all customers embraced Amazon Pay UPI during AGIF 2024 - a staggering 20% yearly jump, with 80% users from tier two and three cities.

One of the first e-commerce movers to create a special event for festival sales, Amazon India set the standard for both international and Indian brands to adapt to consumers’ growing expectation of intense promotional offers during festivals. Following the Covid-19 pandemic, the company shifted its focus to targeting consumers outside of metropolitan cities, in tier two and three regions. In 2024, over 85% of customers of the AGIF were from non-metro cities. This is a key development as the expansion of India’s middle-class hinges on growth outside major cities. Though Amazon India has significant competitors in the Indian market, international companies can draw inspiration to reach the non-urban Indian consumer that constitutes the bulk of the middle class.

The potential for Galeries Lafayette’s India ventures

Galeries Lafayette announced in 2022 that it would open two locations in India: in New Delhi and Mumbai. It is clear that to establish their salience in the Indian market, the veteran French department store will have to cater to regional differences between the political and commercial capitals while matching up to the advanced e-commerce ecosystem of India.

Festival season will, without a doubt, be a key timeframe. Luxury brands are already taking note of the Indian festival season. From Jimmy Choo’s Diwali capsule collection to Christian Louboutin’s collection entitled ‘The Diwali Edit’, there are an increasing number of brands catering to Indian luxury shoppers. Giving its shoppers a unique experience during festival season could set Galeries Lafayette apart. With differing clientele in Mumbai and New Delhi, this may mean tailored events for each city while ensuring it doesn’t lose customers to FOMO (‘fear of missing out’).

Domestic travel

There is also a rise in domestic travel during festival season. The three main categories are individuals returning to their native places to celebrate with extended family and domestic travel for spiritual reasons as well as for leisure. Post the COVID-19 pandemic, there has been a rise in spiritual tourism. In 2024, Agoda, a travel booking platform, reported a notable 10% increase in searches for spiritual destinations during festival season. Across religions, Indians seem to have a higher propensity for pilgrimage and holy destinations.

About three-quarters of urban Indians planned travel during the festive September to December period with similar preferences regarding domestic and international across generations with more than 20% of respondents to the survey citing the festive atmosphere as a reason to travel during this periodix. Shorter vacations and long weekends along with festive promotional deals drive this tendency.

Conclusion

While the concept of festivals is not unique to India, they manifest in a distinctive manner at a colossal scale in the country. Moreover, having not just singular but multiple festivals to create a season subsequently enables economic actors to capitalise on the seasonal peak as a whole. It is tempting to compare the duration from Black Friday to Christmas in the West and Lunar New Year in China and though similar in certain economic aspects such as commercialisation, there is no discernible festival economy in those countries.

India’s expanding middle class, growing preference for premium products, and rising disposable income, combined with the traditional festival economy results in a notable and planned consumer spending spike annually. Innovative brands and platforms are tapping into this by fabricating similar experiences to boost sales. For example, India saw a record number of Black Friday deals which were used by many sellers to get rid of excess stock left over from the festival season.

Festivals in India are vast experiences that generate economic value within its social and cultural fabric. Brands must constantly innovate to fully capture the potential of this unusual period while understanding its cultural underpinnings. These events are also celebrated in different manners across different states, regions and communities. The diversity of India reflects the need to make sure that brand offerings and communication is in line and relevant to its target group. A one-size-fits-all approach has hardly ever provided fruitful results in the massive nation and during a time as important as the festival season, the margin for error can be very low. A final example to illustrate this - during Diwali, it is common in North India and among certain communities to gamble as this is considered an auspicious time. However, in the south and among other communities, gambling is considered an unholy activity during a spiritual time. A wide betting campaign in this case is likely to do more harm than good given its dispersed audience. Understanding micro contexts in India is key and even more so to maximise the opportunity presented by the Indian festival economy.

Credits: IADS (Anchita Ranka)

i] [IMF World Economic Outlook – July 2024

ii] [https://www.ibef.org/industry/retail-india

iii] [https://www.pwc.in/assets/pdfs/consulting/financial-services/fintech/publications/the-indian-payments-handbook-–-2023–2028.pdf

[iv] Chougule, A.R., & Khamborkar, A. (2014). A Study of Seasonality in Stock Market: With Special Reference to Diwali Effect.

[v]<https://www.grantthornton.in/en/insights/thought-leadership/festive-auto-survey-2024-report/>

[vi] <https://retail.economictimes.indiatimes.com/news/consumer-durables-and-information-technology/consumer-electronics/festive-sales-buoyed-by-online-sales-premiumisation-appliance-makers-expect-up-to-30-growth/114672455?action=profilecompletion&utmsource=Mailer&utmmedium=newsletter&utmcampaign=etretailnews2024-10-28&dt=2024-10-28&em=YXJhbmthQGlhZHMub3Jn>

[vii] <https://retail.economictimes.indiatimes.com/news/e-commerce/e-tailing/amazon-india-strengthens-workforce-to-meet-festive-demand-in-tier-2-3-regions/114455833>

[viii]<https://www.cntraveller.com/article/conde-nast-traveller-diwali-party-2024>

[ix] <https://travel.economictimes.indiatimes.com/news/research-and-statistics/research/three-quarter-of-urban-indians-plan-festive-season-travel-domestic-destinations-leads/112884913>

Printable version here

*Every IADS event is designed to allow the Association members to learn from each other, and the General Assembly is no exception. This is why the 2024 edition took place in Türkiye. It was the perfect opportunity for one of the IADS’ newest members, Boyner Grup, to showcase the progress made since the COVID-19 pandemic and how it radically reinvented itself to adapt to the new market conditions.

The text below is a synthesis of a presentation by Yalin Ozcan (who was CEO at the time) of Hopi, the loyalty business unit within the Boyner Grup. In ten years, Hopi evolved from a points-based loyalty programme to a retail media offering and a fintech, offering a wide array of services to customers and other retailers.

It has been stripped of confidential information, including the Q&A section, which IADS members can find in the meeting recap related to the 2024 General Assembly on the IADS Website.*

Introduction: from loyalty to FinTech

Hopi’s origins are deeply tied to Türkiye’s unique credit card and instalment culture. In 1998, Boyner (then known as Çarşı, the first name of the department store unit) took the notable step of issuing its own credit card without bank backing. Instalments became a loyalty incentive in response to local economic constraints, preceding the introduction of points-based rewards. This venture was eventually sold to HSBC, but it laid the groundwork for future programmes.

By the time Hopi launched in 2015, Boyner was, therefore, no stranger to credit-based loyalty and already had gift cards and other payment options, which were widely accepted and used by customers. Yet Hopi was conceptualised as a multi-merchant coalition from its inception, as the plan was to create a totally new type of business.

Hopi has evolved in less than ten years from a straightforward loyalty initiative into an expansive B2B2C platform delivering not only traditional loyalty services but also advanced marketing, advertising, and financial solutions.

A multi-merchant loyalty programme

In its initial incarnation as a loyalty programme, Hopi took root within Boyner department stores but was conceived from the outset to transcend that origin. The reason behind its expansion beyond Boyner’s walls lay in the realisation that instalment offerings alone had ceased to provide competitive differentiation on the Turkish market. Consequently, Hopi quickly broadened its scope to include over 300 merchant partners spanning various retail categories, from gas stations to supermarkets. Some of these partners are Boyner’s competitors, reflecting Hopi’s strategy of building a genuine coalition of retailers that enhances the programme’s national appeal.

Operating independently from Boyner, Hopi recorded 25 billion TRL (707 million USD) in GMV 2023, with the plan to double that figure in 2024. It handles some 80,000 transactions daily, supported by strict adherence to privacy regulations that mirror Europe’s GDPR standards. Such compliance ensures that while Hopi can extract insights from customer data, this information remains securely protected.

The technical integration with merchant cashier systems facilitates instant reward transactions at the point of sale, fostering a frictionless customer experience. With a membership base of 18.2 million in a nation of approximately 85 million people, Hopi’s loyalty programme coexists with individual retailers’ own initiatives, demonstrating its flexibility and inclusiveness.

Transition into MarTech capabilities towards an AdTech provider

As Hopi accumulated detailed customer knowledge, it seized the opportunity to enhance its value proposition from a simple loyalty platform to a marketing technology provider. Central to this shift was the introduction of Paracik, an in-app currency functioning as a versatile tool to incentivise spending and refine consumer engagement strategies creatively. Campaigns like the so-called “lollipop campaign” allowed brands to reward customers with Paracik upfront while retaining the option to reclaim unused balances. This approach has proven effective, driving turnover increases up to 2.3 times in certain segments, such as electronics retail.

Hopi also encouraged sharing Paracik balances among friends and relatives, recognising that socially connected rewards could motivate additional customers to join and spend more. In practice, for every Hopi user who shared Paracik, an average of 1.6 friends became active shoppers, boosting cart sizes, GMV, and overall engagement. By leveraging its data-driven insights, Hopi expanded its client base beyond traditional retailers to include brands eager for targeted and innovative marketing approaches.

Building on this MarTech progress, Hopi logically extended its capabilities into advertising technology. Its ability to segment consumer data and precisely target audiences made it an appealing partner for over 100 brands across diverse sectors like finance, cosmetics, and technology—some of whom are not even participants in the original loyalty programme. Hopi’s AdTech services deliver a competitive advantage over conventional loyalty-based promotions by offering advanced audience segmentation and selecting optimal advertising channels. This evolution from a consumer rewards platform to a fully-fledged marketing and advertising partner positioned Hopi to help businesses navigate a complex digital landscape and optimise their marketing investments.

Adding FinTech services to the range of activities

Hopi’s foray into FinTech represented a significant strategic pivot. While credit cards and loyalty points had long dominated the Turkish retail environment, roughly 20 million individuals remained without access to banking services, with a substantial proportion being women who manage their finances indirectly through family accounts. Recognising an opportunity to broaden its customer base and foster financial inclusion, Hopi introduced prepaid cards and mobile payment solutions. Rather than developing the economic infrastructure from scratch, Hopi partnered with Türkiye’s largest FinTech company, selling a stake in Hopi to this strategic ally to ensure a seamless integration of embedded finance services.

These new financial offerings include digital loans and credit services that can be approved quickly and easily within the Hopi app, removing traditional barriers to accessing credit. Within just ten months of launching these FinTech capabilities, Hopi received nearly one million finance applications, approving over half—significantly above the typical 30-35% approval rate seen among local banks. This surge translated into substantial extra transaction volumes surpassing 450 million TRL (13 million USD) in GMV and adding a lucrative, commission-based revenue stream to Hopi’s portfolio.

A journey leading to the creation of a comprehensive B2B2C ecosystem

Hopi's current incarnation epitomises a versatile B2B2C platform serving multiple stakeholders. Approximately 18.3 million users interact with the platform, generating around 83,000 daily transactions, with 300,000 daily users benefiting from a comprehensive shopping, loyalty, marketing, and financial ecosystem. On the business side, 550 partners rely on Hopi’s robust framework for building or enhancing their loyalty and customer relationship management programmes. Crucially, Hopi can provide a retailer with an entire loyalty or CRM solution from the ground up—something that would typically be resource-intensive and complex to develop independently.

Hopi’s underlying approach is enabled by its broad and varied data sources, surpassing what any retailer could accumulate individually. Complementing their existing loyalty programmes, partners gain additional insights and capabilities through Hopi, which has established itself as a leader in B2C loyalty services. The company’s ambition now is to secure its position as an indispensable partner for consumer-facing businesses, both domestically and, in time, internationally.

Hopi’s evolution encapsulates more than just the story of a loyalty programme growing into a multifaceted ecosystem—it highlights a strategic vision shaped by data, innovation, and market responsiveness. By continually adapting to consumer behaviors, regulatory frameworks, and the technological demands of modern commerce, Hopi has created an environment where retailers, brands, and customers all find tangible benefits. Its journey from credit-based instalment incentives to a fully integrated B2B2C platform—offering loyalty solutions, advanced marketing campaigns, targeted advertising, and accessible financial services—demonstrates its foresight and resilience in a rapidly shifting landscape. As Hopi now looks beyond national borders, its pioneering blend of capabilities stands as a model for how businesses can transcend traditional boundaries, ultimately becoming indispensable partners for consumer-facing enterprises worldwide.

Credits: IADS (Selvane Mohandas du Ménil)

Printable Version here

Annual Department store results

The IADS Global Department Store Monitor was originally launched in May 2021 by Dr. Christopher Knee as the ‘IADS 100 Report’ after realising that comparable department store data was either unavailable, poorly understood, or not exploited by analysts. This was characteristic of an ever-evolving industry, making it difficult for outsiders to understand, including events such as privatisation, mergers, change in ownership, or simply not categorising numbers by business uniti.

Since then, the report has been renamed and rebuilt into a new format to enable dynamic comparison among department stores over a specific period and a series of years. To track and compare sales and profits from companies worldwide while accounting for fluctuations in exchange rates, the renewed version of the monitor includes current (as of today) and fixed exchange rates (as of 2021) to isolate the impact of sales growth from the effect of exchange rate changes.

Also, given that accounting standards across countries are not uniform, the fiscal year is referred to as FY 2023-2024 throughout the monitor to compare results across the occurrence of the same world events. This uniformity helps maintain a baseline in the events that have occurred throughout the year to draw fair conclusions. The conception of this monitor was driven by the need to juxtapose pre- and post-COVID-19 results. The 2025 edition of the IADS Global Department Store Monitor reviews 59 department stores with publicly available information to create a benchmark for global department store stakeholders regarding the 2023-2024 period.

This report attempts to capture the global economic retail scenario post-COVID-19 and whether pre-COVID-19 numbers have been regained or are faltering.

Fiscal Year 2023-2024 : Slow and steady resilience

The global outlook during this period was characterised by uncertainty amid turmoil in the financial sector, high inflation, the impact of Russia’s invasion of Ukraine (which started in February 2022) and marking three years of the COVID pandemic, which was finally declared over as a health emergency in May 2023. Recovery was slow but steady due to widening divergences among economic sectors and regions. 2024 also saw a changing political landscape with over 70 elections globally. However, despite fears of a hard economic landing, the global economy was surprisingly resilient despite significant central bank interest rate hikes. Inflation also began to decline across emerging and advanced economies.

During FY 2023-2024, major retail industry transformations were afoot:

• From a regional perspective, US department stores saw their market share decline, dropping from 14% in 1993 to less than 3% in June 2024. This prompted strategic consolidations such as Saks Fifth Avenue’s USD 3 billion offer for Neiman Marcus Group that was turned down (eventually closing the deal at USD 2.7 billion in December 2024). Macy’s received a USD 5.8 billion offer from private equity firms Arkhouse and Brigade Capital Management however ended takeover talks in July 2024. The department store also announced its plan to shutter 150 stores while shifting its focus to attracting younger customers in February 2024.
• In Asia, India solidified its position as a growing luxury market with an expansion of around 3.4% in 2023 and attracted 27 new international retail brands in 2024. Not just domestically, Indian brands such as SABYASACHI arrived at Bergdorf Goodman in November 2024. On the other hand, China faced a retail slowdown commencing in July 2024 due to economic challenges such as rising local government debt and reduced private-sector spending. Hong Kong saw a similar decline in the second half of 2024 due to the shift in consumer behaviour among mainland Chinese visitors. In Japan, Seven & i Holdings completed the sale of Sogo & Seibu department stores to Fortress Investment Group in October 2023.
• The retail industry is undergoing a transformation due to AI-driven hyper-personalisation, with the global market for AI in retail valued at USD 11.61 billion in 2024 and projected to grow at 23% annually through 2030.
• Department stores advanced their sustainability commitments against growing regulatory demands. Harrods published its first-ever ESG report in June 2024 highlighting its progress in the reduction on Scope 1 and 2 carbon emissions and setting future goals.

Fiscal Year 2023-2024 financial results: The post-Covid boom in retail is tapering off

In 2024, the global economy, including the retail sector, faced significant market uncertainty, slow economic growth, and unfavourable interest rate environments across regions.  The post-COVID-19 peak of 2021 and 2022 has passed, and growth has now stabilised across the retail sector, with department stores largely following this trend, albeit with regional divergences. Some broad observations from the Global Department Store Monitor for FY 2023-2024 covering 59 department store companies indicate that:

• The average global year-on-year sales growth in FY 2023-2024, after two years of significantly positive sales growth in 2021 and 2022, shows a slightly negative sales trend of around –1.6%.
• The share of department store sales in total retail sales is stabilising and has almost returned to pre-COVID levels.
• This is also due to the reduction of total global retail sales after hitting a peak in 2021 and 2022. Global retail consumption is starting to slow down due to considerations such as reduced purchasing power, slowdown in the luxury sector, environmental responsibility considerations and other factors that differ regionally.

In the Americas, department store sales have stabilised and are contributing more to their owners’ retail sales than pre-COVID. This is due to increased department store sales and lower total retail sales per company. The average sales trend for these group-owned department stores is negative compared to 2021 and 2022, suggesting that the post-Covid peak has passediii. On the other hand, stand-alone department stores are almost stable and slightly positive in year-on-year sales growth.

In the Asia-Pacific region, department store sales have stabilised but have not yet reached pre-Covid levels regarding contribution to their owners’ total retail sales. Department store sales have reduced due to a global retail slowdown, especially in Japan, South Korea and Hong Kong. The average sales trend for department stores was negative, after two consistent years of sales growth in 2021 and 2022. In India and the Philippines, on the other hand, department stores saw a positive sales trend.

Similarly, in Europe, sales in group-owned department stores have risen and crossed the pre-COVID contribution to their owners’ total retail sales. European department store performance has been decent on average. However, total retail sales have reduced. Both, department stores owned by groups and standalone department stores saw a muted positive sales trend of less than 1% on average.

Americas: Marked by restructuring and innovation

In Chile, Falabella (-10.7%) saw a negative sales trend but increased its profit. Falabella’s increase in profit may be explained by its sale of two major assets during the financial year. It also invested over USD 100 million into enhancing its omnichannel capabilities, store network expansion, and sustainability efforts. Cencosud Paris (+6.6%) saw an upward sales trend but declining profit. Cencosud Paris undertook several store transformations and launched its digital wallet CencoPay. Ripley (-7.1%) saw a declining sales trend and increased its losses. It introduced cafés and beauty salons in its flagship Lima stores following its strategic decision to reinvent itself as a lifestyle destination.

Mexican department store El Palacio de Hierro (+10.6%) increased its sales and profits during this fiscal year. It recently revamped two stores and relaunched one in Mexico City. Similarly, Liverpool (+23.2%) also saw rises in its profits and sales. Post-pandemic consumer sentiment in Mexico has tended towards value for money and convenience. Liverpool acquired Nordstrom in the US and established a significant North American-Mexican retail alliance.

In the US, Nordstrom (-5.7%) and Macy’s (-5.5%) saw a decline in sales and reduction in profit, although it stayed positive. Nordstrom was privatised by family ownership and Mexican retailer Liverpool. Macy’s announced that it would close 150 stores and focus on expanding Bloomingdale’s and Bluemercury operations. It also faced pressure from investors to create a real estate subsidiary for better asset management citing Dillard’s successful operating model. Similarly, Dillard’s (-1.73%) and Kohl’s (-3.35%) saw fewer sharp sales downturns but while Dillard’s saw a slight dip in its profit, Kohl’s plunged much further into loss. Dillard’s was the best performing department store among its competitors; it achieved superior results through focused operations and disciplined capital management. Kohl’s undertook leadership changes and tightened its budget to cope with its results. All major US department stores went through a tough financial year prompting mergers such as Saks- Neiman Marcus which was finalised in December 2024 and privatisations such as Nordstrom.

Asia-Pacific: Diverging results across South, East and South-east Asia

The 2023 sales trend in China has been fairly stable. Parkson Retail Group Ltd (+9.9%), Wangfujing (+13.2%) and Wushang (+13.2%) reported positive sales growth. Several Chinese department stores included in the Global Department Store Monitor showed stable sales numbers with negligible deviation. New World (-34.4%) and Maoye (-5.1%) reported negative sales trends; while the former’s negative sales growth mounted, the latter was able to reduce its negative sales growth from the previous financial year significantly. In FY 2023-2024, the Chinese economy was characterised by real estate crises, high youth unemployment rates, and a generally cautious consumer sentiment. With moderate expansion, China saw the emergence of new trends; rural areas outperformed urban areas regarding consumption. The luxury sector showed a decline of 18-20% overall but rural consumers showed more propensity for luxury consumption while their urban counterparts exhibited luxury fatigue. Government stimulus measures and local economic conditions also influenced rural customers. Aspirational urban consumers that once fuelled luxury growth preferred products and services that enhance their quality of life like travel and health.

In Hong Kong, Wing On showed modest sales growth of almost 1.5% but was able to achieve a good pre-tax profit after marked losses in the previous year. Sogo was privatised mid-2022 and has not released public financial statements sinceiv. Hong Kong saw a shift in consumer behaviour from mainland Chinese consumers. Inbound tourism has not recovered as quickly as expected and tourist expenditure saw a drastic fall compared to 2018 levels. The Hong Kong Dollar was strong which encouraged locals to shop abroad, adding to the decline of retail sales in Hong Kong. Given this perspective of the Hong Kong retail scene, department stores have been remaining afloat.

Indian department stores, Lifestyle and Shopper’s Stop have been performing well. While the 2023 sales numbers for Lifestyle are not available yet, it has been consistently growing sales since the COVID-19 pandemic and announced plans to open at least 50 new stores in the next three to four years. Shopper’s Stop reported a positive sales trend of 5.4% after two consistent years of double-digit sales growth. Despite Amazon divesting its stake in Shopper’s Stop, the department store saw a growth in sales driven by beauty. The Indian retail market is booming with several foreign brands entering the country during the year. In Sri Lanka, Odel (-11.5%) saw a continuing downtrend in sales and almost doubled its losses. The country saw a sluggish economy ridden with inflation and political instability. The consumer expectation of digitisation and personalisation is strong and sales at Odel have consistently declined with its owner, Softlogic Group, seeking investors for the retail store.

Japan has seen a strong pattern of recovery post-COVID, with all department stores finally achieving the green in this financial year. Tobu (+3.45%), Kintetsu (+4.39%), Takashimaya (+5.1%), Marui (or 0101) (+7.97%), and H2O (Hankyu Hanshin) (+9.6%) showed growth with Tokyu (+11.44%), J Front (Daimaru Matsuzakaya) (+15.3%) and Isetan Mitsukoshi (+17.54%) reaching double digit sales growth. Isetan Mitsukoshi especially has shown steady recovery since experiencing a significant operating loss in Financial Year 2020-2021 due to the impact of Covid-19, with particularly strong performance in Financial Year 2023-2024 which represented the highest operating income since the merger of Isetan and Mitsukoshi in 2008. All reported department stores had positive profits surpassing 2022 levels. In Japan, department stores saw their growth rate decline dramatically from 10.8% in the first half of 2024 to just 2.3% in the second half. However, stores in tourist areas outperformed other stores by a large margin. Japan's luxury market experienced a significant sales spike driven by international tourists capitalising on a weak yen and resilient domestic spending. The weakened domestic currency overinflates Japan’s retail performance and is likely economically unsustainable.

Korea has seen an overall decrease in sales growth, with the most severe decreases being in Lotte (-5.9%), Shinsegae (-12.8%), and Hyundai (-16%), while Hanwha Galleria (+0.5%) was the only department store to remain stable. The spinoff of Galleria can explain this as a separate entity starting in 2023. Following this trend, there have been slight decreases in operating profit figures. During the fiscal year, the South Korean economy saw a downturn marked by high interest rates and rising prices. While department stores posted growth in the previous fiscal year, they could not maintain it in the rough economy during FY 2023-2024.

Interestingly, the pre-owned luxury market performed well and much better than the declining luxury sector in both South Korea and Japan. Even before the depreciation of the Japanese yen in the first half of 2024, Japan’s secondhand market saw strong growth driven by TikTok where secondhand shopping in Japan has become a trend. In 2023, South Koreans were the world’s largest online shoppers in resale with almost 62% shopping for secondhand luxury goods.

In the Philippines, SM (+6.8%) showed a positive sales and profit trend. Robinson’s Retail (+7%) showed a positive trend for sales but reduced profit, though the latter remained positive. The FY 2023-2024 growth was attributed to store expansion initiatives and recovery from pandemic restrictions. Robinson’s Retail’s department store segment grew at more than its combined retail operations at 8%. It was driven by improved category performance in travel-related items, sportswear and improved gross margins from a better category mix. The retail industry in the Philippines has seen steady growth, driven by rising consumer spending and a youthful population. The focus of Philippine retailers has now turned to expanding omnichannel integration.

In Malaysia and Singapore, Parkson Retail Asia faced concerns regarding operating as a going concern. Its subsidiary for Vietnam operations filed for voluntary bankruptcy later in April 2023. The Singaporean economy saw declining growth in the retail sector. This was also driven, in large part, by tourists opting to shop in cities that provide cheaper alternatives. Though Malaysia posted decent growth in the retail sector, this did not translate into better performance for department stores.

In Indonesia, Matahari (+1%) saw a small positive sales trend combined with a massive jump in profit. Overall, Indonesia’s retail sector has perfomed well.

Central Retail in Thailand saw modest sales growth of 5% and a slight increase in profit. The country also experienced strong economic growth and an uptick in luxury sales.

Australian department store David Jones was sold by Woolworth’s in March 2023 hence no results are available for the last fiscal year. David Jones saw a significant decline in sales after its sale to Anchorage Capital Partners. However, reinvestment was planned for both in-store and online shopping experiences. Myer (-2.9%) saw a slightly negative sales and profit trend. It purchased Apparel Brands in October 2024 to expand its loyalty programme, Myer One. Both Australian department stores are reducing their number of stores overall; while David Jones is reducing the size of its physical stores, Myer is reducing its locations while focusing on a younger consumer.

Europe: Decent performance across countries

The UK saw mixed results with rising profits and reducing losses being the broad trend. However, Selfridges (according to press sources) and Fenwick (-14%) saw deepening losses attributed to high inflation, increased competition, and a challenging retail environment. Selfridges saw notable property devaluation, changes in ownership stakes, and impending loan repayment. This decline in valuation was attributed to external market factors including rising interest rates and rents. Fenwick closed its flagship and sold it to developers, reflecting its sales decline. Harvey Nichols decreased its losses but remains in the red. On the contrary, John Lewis (+1.4%), Liberty (+6.6%), Harrods (+8%), Fortnum & Mason (+9.1%) Marks & Spencer (+9.6%), all showed positive sales trends and an increase in profit. John Lewis reduced its losses and increased its profit. This was attributed to the effectiveness of strategic initiatives such as relaunching the ‘Never Knowingly Undersold’ promise and joint loyalty programme with Waitrose that showcased its resilience and market adaptability. Liberty saw success across product categories and subscription services despite a decline in e-commerce revenue. Harrods was sued by the victims of alleged sexual abuse by its previous owner but managed to post a notable sales growth and profit despite this bad publicity. At Fortnum & Mason, sales recovered, and turnover returned to pre-COVID levels. This was primarily driven by international customers supported by opening a new store at the Hong Kong airport. It was also reported to have been considering entering the US market. Marks & Spencer saw a big rise in profit supported by a substantial investment in enhancing staff compensation and family leave policies. It saw private label success including its own beauty brand. The UK saw an unexpected upswing in department store and non-food store sales during the year's second half. Despite the calculated loss of over GBP 10 billion due to the removal of tax-free shopping for tourists in 2021, UK department stores managed to grow their sales.

In Denmark, Illum (+10.5%) and Magasin du Nord (+0.5%) reported positive sales trends; Illum lessened its loss while Magasin du Nord saw a slight decrease in its profit. Denmark saw positive consumer sentiment but a reduction in net spending for all categories except groceries.

In Finland, Stockmann (-3%) saw a negative sales trend but a rise in its operating profit. Due to its struggling financials, Stockmann in Helsinki considered a potential name change to that of parent company Lindex and the sale of the department store.

In Sweden, Ahlen’s (-19.5%) saw a downtrend after consecutive years of growth after the pandemic. After its ownership change in 2022, it has not broken out its profit for department stores. Sweden saw higher prices due to inflation, with consumers transitioning to lower-cost goods and actively reducing consumption for environmental reasons. NK (+4.2%) saw a positive sales trend, but it reduced its profit during the 2023 financial year.

The Norwegian retail market showed signs of expanding with potentially becoming a new luxury destination driven by currency devaluation, tax-free shopping and disincentivising luxury imports, as well as an uptick in tourism during warmer months. According to press sources, Steen & Strøm in Oslo witnessed sales growth of 14% in the first half of 2024v.

Kaubamaja (+9.8%) in Estonia saw a significantly positive sales trend and rise in profit. However, Estonia saw a 1% reduction in total retail trade volume, comprising a 3% drop in textile, clothing, and footwear store sales.

In France, while Galeries Lafayette does not release its financial results, according to press sources, the company returned to its pre-COVID sales volume of EUR 3.85 billion by the end of 2024 and is currently implementing its EUR 400 million investment plan over the next five years. Similarly, Printemps does not share revenue or profit figures but confirmed in the press that it entered 2023 profitablyvi.

In Greece, Attica (+18.8 %) saw an upward sales trend and an increase in its profit. Although it was fined EUR 400,000 for misleading pricing practices, it was still able to grow financially. In general, the rent for retail spaces in Greece followed an upward trend.

El Corte Inglés (+2.6%) in Spain saw a positive sales trend and a drastic rise in its operating profit. Spain saw robust growth in consumer spending reflected in department store sales.

In Switzerland, Jelmoli (-4.2%) saw a negative sales trend and improved its EBIT while remaining in the red. Coop (+1.34%) saw a positive sales trend and an increased profit figure. In Switzerland, luxury department stores such as Jelmoli and Globus faced declines due to a shift in the retail landscape. Jelmoli’s flagship store in Zurich is now closed waiting for Manor to takeover.

Middle East and Africa: Operating in a complex environment

In South Africa, Woolworth’s (-16%) showed a significant drop in sales and profit explained partly by the closure of over 30 stores. Woolworth’s sold David Jones to Anchorage effective in March 2023. The South African economy saw an increasingly complex environment due to load shedding, inflation, and global supply chain disruptions. The South African Reserve Bank raised interest rates multiple times to combat persistently high inflation of almost 6% as of August 2024. The national power crisis required retailers to undertake substantial costs for alternative energy sources like generators and battery systems.

What to expect from Fiscal Year 2024-2025 and beyond

Retailers are presently gathering the results for the current FY 2024-2025. However, clear global challenges throughout the year will undoubtedly impact their results:

• the election of President Donald Trump in the US and impending tariffs, some of which have already been enforced, across the globe are sure to restructure global retail supply chains. Though inflation across other economies has been decreasing, the US market fears stagflation – a combination of high inflation and slow growth - despite Trump’s pro-domestic growth agenda. The ripples of US American economic actions will no doubt be felt worldwide, with the EU, China and Canada, among other countries, discussing retaliatory tariffs. Canadian department store Hudson’s Bay has already applied for creditor protection given a weak recovery post-COVID and tensions with the US. India, conversely, is preparing a tariff reduction proposal with the US.
• The potential US TikTok ban pending its sale to a US owner adds to the uncertainty, given that it is an essential social media channel that drives trends and influences consumer behaviour in the fashion industry. Furthermore, the rise of TikTok Shop, which emerged as the second-largest e-retailer behind Amazon during UK's Black Week, represents its influence over the fashion and retail sectors. Already available in the US, the UK and Spain, it is poised for entry in other European markets later this year. The global economic forecast of 2025 is hence dodgy and will digress from 2024 results sharply.

In Asia, Vietnam’s total retail sales are projected to reach USD 350 billion this year and with a young, expanding middle class with rising purchasing power, Vietnam is rapidly becoming a key player in Asia’s retail landscape. Luxury retailers such as Tiffany & Co and Montblanc have opened their first flagship stores in Hanoi and Ho Chi Minh City. The Indian market will continue to grow with Galeries Lafayette’s first Indian department store set to launch this year in Mumbai and a second one in Delhi in 2026 in partnership with Aditya Birla Group.

In the EU, revised sustainability directives CSRD (Corporate Sustainability Reporting Directives), CSDDD (Corporate Sustainability Due Diligence Directive), and ESPR (Ecodesign for Sustainable Products Regulation) mandate comprehensive environmental reporting and due diligence from retailers by 2028. Nordic countries such as Norway are seeing dramatic rise in tourist shopping due to tax-free benefits. Steen & Strøm doubled its tax-free shopping revenue in 2024. This is further supplemented by an increase in climate tourism where visitors flock to cooler countries due to climate change.

The next edition of the Global Department Store Monitor will examine the results from FY 2024-2025. While the global retail landscape is constantly changing, the factors discussed above will have a definite impact on department stores, adding to their current transformation, which includes prioritising omnichannel presence, experiential retail, and adapting to changing consumer preferences.

[i] And a reason for international analytic platforms such as the International Association of Department Stores to exist in the first place.

[ii] Companies’ accounting standards reflect both whole and broken fiscal years which is indicated in the monitor by marking it as Fiscal Year 2023-2024.

[iii] Note: here are only three Latin American department stores owned by groups that are analysed in this section due to the limited availability of public financial data, so inferences may not be fully extrapolatable.

[iv] Since results are not published, this department store is not included in the Global Department Store Monitor.

[v] However since results are not published, this department store is not included in the Global Department Store Monitor.

[vi] Ibid.

Credits: IADS (Anchita Ranka)

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The French department store Printemps is making a bold leap into the U.S. market by opening its first American outpost in Manhattan’s Financial District. After four years in the making, the 2-story, 4,000 square meter location at One Wall Street opened last 21st of March (on Spring Day, which means Printemps in French). Interestingly, it is not advertised as a store but as an immersive luxury experience, blending fashion, gastronomy, and hospitality.

With around one-tenth of the Paris Haussmann flagship store surface, Printemps aims to challenge the traditional department store model by focusing on experiential retail, offering visitors a space to linger, discover and indulge. Also, the opening of Printemps, a new retailer name for US consumers, is expected to contribute to the renewal of the Financial District, introducing a new luxury shopping option in NYC. Advertised as “not a department store” on local cabs and billboards, Printemps is a very ambitious project. What is it all about? Many retailers have bit the NYC dust in the past. What is Printemps’ plan to differentiate, in a crowded market, to oversollicited customers?

It starts with the real estate

One Wall Street: from New York landmark…

One Wall Street is an architectural and historical gem that has played a prominent role in New York City's skyline since its construction in the early 20th century. Originally built as the headquarters of the Irving Trust Company, the building was completed in 1931. At the time, it was one of the tallest buildings in the Financial District, standing at 199 meters and 50 stories tall. One Wall Street is most famous for its stunning Art Deco interiors, particularly the Red Room, a large reception hall embellished with over 2.5 million red and gold mosaics designed by artist Hildreth Meière. The space was initially conceived as a banking hall meant to impress clients and reinforce the prestige of the Irving Trust Company. A 35 story annex was added to the original building in 1965.

Over the decades, One Wall Street has changed hands several times, reflecting shifts in the financial industry. After serving as Irving Trust's headquarters, the building became home to the Bank of New York Mellon, following a series of banking mergers and acquisitions. In 2014, the building was acquired by Macklowe Properties for USD 585 million (and backed by Dilmon LLC, the family office of Qatar’s Sheikh Hamad bin Khalifa Al Thani) to embark on a massive redevelopment project to convert the office tower into a luxury residential and retail destination. Macklowe then secured a USD 750 million construction loan from Deutsche Bank in 2018 to fund the project.

… to a mixed-use destination with problems

Besides Printemps, One Wall Street offers local residents a 4,000-square-meter Whole Foods grocery store and a 5,000-square-meter Life Time wellness and fitness club. The project also boasts 9,000 square feet of resident amenities, including a private dining room and a pool.

Estimated to be a USD 1.5 billion project, the building repurpose is the largest office-to-residential conversion in NYC history. It also illustrates a significant shift in the Financial District as it transforms into a more family-friendly residential area, with ongoing office conversions, high-end retail, and cultural attraction openings, including the Perelman Performing Arts Center. On the corporate side, a new breed of companies have been settling down: tech companies, media companies such as Condé Nast and up-and-coming fashion labels like Theophilio, Rosie Assoulin and Bode. These changes will contribute to making the Financial District more lively and generating traffic.

However, as of November 2024, One Wall Street has faced significant challenges, with sales figures far from expectations. Out of 566 available units, only 113 had been sold since sales began in 2021 for USD 230 million, representing 14% of the anticipated USD 1.7 billion in sales. In 2022, developers were already looking for a USD 1.1 billion loan to help refinance the project. In 2023, in response to these slow sales, Macklowe secured a USD 300 million inventory loan from Deutsche Bank to manage the unsold units. Macklowe dumped two sales brokerages and now markets the units with his team.

One Wall Street is not the only project facing issues in the Financial District, as new residents are not flocking quickly. In addition to numerous rentals, the area has more than 220,000 condo units, with thousands unsold despite the median price dipping from USD 1.275 million in the second quarter of 2023 to USD 985,000 in the third quarter of 2024.

New York, New York: if I can make it there

From Galeries Lafayette and others…

New York has always been a retail magnet. Galeries Lafayette previously attempted to establish a presence in NYC. In 1991, they opened a store in Trump Tower on Fifth Avenue. After a promising debut, customers considered the store too French and complained that the supposedly exclusive brands were not. The targeted USD 65-70 million turnover could never be achieved, only reaching USD 24 million in sales in 1993. With high operating costs and stiff competition, losses peaked at 97 million in 1992 and 93 million in 1993. The store closed in November 1994. Other foreign retailers entered the U.S. and eventually shut down: Takashimaya, Topshop, Tesco, Carrefour and Joe Fresh.

… to Printemps

Luxury has never thrived in the Financial District in the past. Big names failed: Saks Fifth Avenue and Milan’s 10 Corso Como both left the area after less than five years, though Tiffany & Co. and Hermès opened stores on Wall Street in the past decade. Located close by, the Brookfield Place mall houses Gucci, Bottega Veneta, Louis Vuitton and Zegna. Also illustrating the area evolution, other high-street retailers are available close to One Wall Street: Zara, Anthropologie and Urban Outfitters.

Printemps didn’t disclose how much turnover the store is expected to generate, but CEO Jean-Marc Bellaiche says they have a “reasonable business plan.” Printemps bets on 150,000 people entering the store daily and targets local residents with a household income estimated at USD 170,000. Commuters and visitors from out of town are also targeted but should not account for the most significant chunk of customers. Echoing the new Selfridges’ loyalty programme, which rewards purchases and time spent using the store services and amenities (such as the skateboard room and the cinema, for example), Printemps says they will measure success in terms of the time customers spend in-store, not only in terms of sales per square foot. However, is this strategy relevant enough to generate the necessary volumes to make the store viable? They give the store two seasons to know if it’s a success or not.

When it comes to finances, Printemps has a special link with the building as the department store is owned by the Qatari-backed investment fund Divine Investments SA, which is supported by Dilmon LLC, a company financing the project along with Macklowe. As a result, it’s most likely that Printemps’s rent is very low or close to nothing. Low rent will certainly be necessary to help compensate for other significant costs as described in Vogue Business: “Printemps will own the products that are sold there. Printemps will employ the people who work there. […] It’s both an experiment and a gauntlet thrown.” Not to mention the cost of building this ultra-luxurious store concept.

Finally, Printemps wants to develop its e-commerce presence in the U.S. The company has launched a dedicated U.S. website to complement the store opening, us.printemps.com. This platform will be designed to provide American customers with access to Printemps' curated luxury offerings, aligning with its strategy to create a seamless omnichannel experience locally.

Don’t call it retail, but hospitality

Design and interior aesthetics

Parisian architect Laura Gonzalez was in charge of the store's interior. Shoppers will encounter mirrored walls, marble staircases, lavish hardwood floors and intricate detailing that echo the brand's Parisian flagship, as well as vintage furniture that is all moveable and for sale. The landmarked Red Room has been transformed into a beautiful shoe salon with a forest of “trees” lighting up footwear displayed on circular onyx tables. It is an impressive introduction to the store.

Printemps New York is not designed to be a conventional department store. Instead, Bellaiche describes it as a “hospitality project” where “French sophistication and curation meets American hospitality,” that encourages visitors to spend time inside rather than rush through quick purchases.

Inspired by a Parisian apartment and dubbed an “apartment store” by Thierry Prevost, General Manager of Printemps America, the store is divided into ten uniquely designed rooms, each offering a distinct shopping experience. The Boudoir houses eveningwear in a gold and lacquered ambiance, while La Garçonnière (translating to bachelor pad) houses menswear, and the Playroom features casualwear, gifts, and sneakers displayed under an LED ceiling that changes visuals (Nike takeover at the time of the opening). The Salle de Bain beauty and spa area, with four beauty cabins, offers luxurious treatments such as facials and nail services, reinforcing the store’s hospitality-driven approach.

Curated offerings

The store doesn’t advertise itself as a concept store even though it could be considering its surface, its layout and its interior designs. The store will sell men’s and women’s ready-to-wear, casual wear, outerwear, vintage, active, accessories, beauty, wellness and gifts. Unlike traditional department store layouts and the usual branded shop-in-shop model in fashion or beauty departments, Printemps NYC favours a multi-brand, curated selection of luxury goods from 450 established brands and niche labels landing in NYC for the first time. Dior, Manolo Blahnik, Valentino, Maison Margiela, JW Anderson, Jacquemus, Jean Paul Gaultier, Manolo Blahnik, Aquazzura, Balenciaga, Nike, Acne Studios, Simone Rocha, Carven, Jil Sander and Bottega Veneta are among the roster of brands, which will be completed by niche brands such as Vautrait, Le Monde Beryl, Corsi Design, Aeyde and Magda Butrym as well as small and artisanal French brands such as Joseph Duclos, Pinel & Pinel and Capulette. Big names such as Louis Vuitton are missing. As a result, the store offers a mix of exclusive items from high-end brands, artisanal products and vintage offerings. Additionally, Printemps integrates its private label, Saison 1865. Encouraging circularity, the Atelier & Repair service offers customers options beyond standard retail transactions.

It’s unsure whether these offerings will be enough to lure the affluent customers the store is targeting. But the mix of highs and lows indeed adds flair to the store. Printemps is not the only department store looking to behave more like an independent multi-brand store. Many luxury department stores try adding flair to the succession of shop-in-shops, thanks to curated multi-brand areas meant to differentiate and demonstrate the specific store's taste. For example, this is the case with L’Endroit and Le Market in Printemps and la Creative Galerie in Galeries Lafayette, in their Paris's Boulevard Haussmann flagship stores.

Finally, to differentiate from the department store’s traditional layout, one of the first contact points for shoppers will be a café, a similar strategy seen at the Boyner’s Cadde store, which has a Costa Coffee right at the entrance. Also, similar to the Printemps Haussmann store, a gift section featuring cheaper items such as candles will be featured at the store entrance.

Culinary experiences and events 

Now integral to any elevated retail experience, food offerings have become a department store staple. Research by Harrods showed that when customers engage with their 26 restaurants and bars, they spend twice as long in the building and twice as much money. Printemps follows a similar strategy and dedicates a third of the shop floor to F&B offerings. They have appointed Chef Gregory Gourdet as its culinary director who created five different concepts for the store: an all-day casual café, a classic Parisian-inspired raw bar called Salon Vert, the Red Room Bar for cocktails, and The Champagne Bar. There is also a French wine shop. However, the most critical F&B option is undoubtedly the Maison Passerelle restaurant. It aims for a Michelin star and is considered one of the 10 most important restaurant openings in NYC in 2025. It is instrumental to the strategy, and bookings are said to be already flooding in. Fine dining is increasingly vital to department store success: El Corte Inglés also successfully opened a Michelin star restaurant, RavioXO, in Castellana stores in 2022.

Beyond fashion and dining, Printemps integrates culture into its retail experience. The store will host curated events, brand takeovers (Jacquemus at the time of the opening), and even meditation sessions, further positioning itself as a destination rather than just a place to shop. With a focus on retail-tainment, Printemps hopes to fill the void left by Barneys New York and Jeffrey, former fashion landmarks that once led the city’s luxury shopping scene.

Printemps certainly plays by the book and ticks many boxes of what a department store is nowadays: a beautiful store concept, F&B options, a curated multi-brand offer, services and events, all with a Parisian flair that New Yorkers will probably like.

The story of One Wall Street and Printemps’ arrival in the Financial District is emblematic of a broader transformation in urban retail and real estate. As traditional office spaces become increasingly obsolete in a post-pandemic world, developers and retailers alike reimagine the possibilities of mixed-use destinations. One Wall Street’s conversion reflects this shift, blending residential and retail to attract affluent buyers.

Yet, with sluggish condo sales and a volatile retail market, Printemps’ long-term viability remains uncertain. Will Printemps and One Wall Street rewrite the narrative, or will they become yet another cautionary tale in the city’s high-stakes retail experiment? As stated in the Financial Times by Neil Saunders, managing director of Global Data, “they are definitely launching at a challenging time. Consumers are becoming a little more reluctant, the luxury market is a lot softer than it has been, and the environment is very competitive. That said, there is a case to have something else that’s a bit different. There is an opportunity for them to carve out a niche, but it won’t necessarily be easy.” Only time will tell, but one thing is sure: nothing is ever static in New York, and reinvention is the game's name.

Credits: IADS (Christine Montard)