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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>

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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 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)

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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)

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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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A store fostering a community of customers

Established in 1881 in Stuttgart, IADS member Breuninger has long been a cornerstone of the city’s retail landscape. It has evolved from a single department store located outside of the city’s retail centre into the multi-faceted and lively mixed-use Dorotheen Quartier that has redefined urban shopping and leisure in Stuttgart. Attached to this 62,000 sqm project, Breuninger’s flagship store plays an integral role, showcasing a curated blend of luxury goods, private-label success, and customer-centric services and experience. Together, these elements illustrate how Breuninger has managed to not only maintain its relevance as a modern department store but also lead the way in building an active community of local customers.

The Dorotheen Quartier : an example of a successful mixed-use area

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feels very lively and offers an alternative to Stuttgart’s high-street shopping area, the Königstrasse, which feels outdated (home to Peek & Cloppenburg and Galleria mid-range department stores).

The Breuninger store : five floors catering to casual, premium and luxury customers

The Stuttgart store has grown over the last decades, adding a second and a third building to reach 42,000 sqm of retail space. 900 people are working in the store (in total, Breuninger has 6,800 employees). The store has three managers:

• In charge of luxury, visual merchandising, marketing, and customer relationship.
• In charge of the men’s department, cashiers, cash desks and store finances.
• In charge of the beauty and sports department as well as store replenishment.

The customer base is mostly local, with only a few tourists coming from Switzerland and Italy.

With three buildings built at different times, the store has uneven ground levels, preventing some of the floors from connecting to one another. For example, the -1 level is home for women’s shoes, kidswear and men’s and women’s underwear: while the shoe department connects to kidswear thanks to a short escalator linking two of the three buildings, these departments don’t connect to the underwear section. This makes customer circulation a bit more complicated than in other department stores.

The store floors offer:

• Ground floor: home of luxury leather goods, beauty and casual women’s fashion. It took seven years to build the leather goods department as luxury brands were reluctant to come to Breuninger in Stuttgart as they had successful businesses in Munich, a 2-hour drive away that people easily do. The brands operate under the wholesale business model. The leather goods section offers large shop-in-shops: Dior is the best brand, followed by Gucci, Saint Laurent, Loewe and Bottega Veneta. This section has been beautifully renovated and is very airy. In comparison, the beauty department design looks a bit outdated and cluttered. With 1,500 sqm, it is rather small compared to the overall store surface. Breuninger considers redoing it and will focus on leading brands and niche brands, removing the “unremarkable middle.”1 Niche fragrances are numerous and have impressive results, with this section packed on Saturdays. Not directly connected to these sections, women’s fashion casual brands are also on the ground floor. It also accommodates a small Breuninger-owned mall in the Karlspassage with stores such as a florist, a newsstand, fashion and beauty stores, a Breuninger restaurant and Breuninger confectionary, a retail hit with locals that achieves way more in sales than neighbouring successful cosmetic brands. Located at one of the store entrances, the Breuninger champagne bar is a famous and packed meeting point for local customers, acting as a community-builder. Overall, the nature of the stores in the Karlspassage and the shopping mall relatively small size contribute to the impression of a community anchor.
• First floor: women’s fashion premium and luxury sections span 7,500 sqm. Brands are mostly run under the wholesale business model and don’t have their brand concept fixtures. Instead, Breuninger set up a harmonised store concept. The first floor also offers a large sunglasses section, premium handbags, jewellery and watches. A coffee place is available on this floor.
• Second floor: men’s fashion (with the same casual, premium and luxury segmentation as for women’s) and men’s shoes span 6,800 sqm and have an even better profitability per sqm than women’s. Men’s fashion achieves roughly the same turnover as women’s fashion. A coffee place is available on this floor./nbsp]
• Third floor: sportswear and sports equipment, including a large ski section and a ski workshop. Customers can either buy or rent ski equipment (skis and shoes). There is also a bike section that grows bigger during the summer. At the time of the visit, the store staff was setting up a new Lululemon shop-in-shop. Also, there is a unisex streetwear-oriented space catered to younger generations, but its location is not optimised. In the future, Breuninger might switch this section with kidswear. Finally, there are outwear sections for both men and women and women’s occasionwear on this floor. A travel agency partially owned by Breuninger is available on this floor.
• Fourth floor: home offerings, luggage, a 44-seat hairdresser, a large restaurant, and busy customer service are available on this floor.
• -1 floor: women’s shoes, kidswear and men’s and women’s underwear are spread out in the three different buildings, as explained above. The shoe department is very airy and has club vibes thanks to special lighting. In that perspective, Breuninger is considering hosting an actual party at night. A tiramisu coffee shop is available in this section. The kidswear department has a busy kid's hairdresser and a candy tunnel offering all sorts of sweets.

Private label successful segmentation

The Stuttgart store visit is also  an occasion to highlight Breuninger’s private label strategy defined by clear segmentation, with each brand targeting specific customer demographics and market segments:

• Darling Harbour has the highest turnover, representing 50% of women's private label turnover and the second-best margin. Positioned to compete with Marc O’Polo, Darling Harbour is contemporary, cashmere-focused, with 5 to 6 collections annually. With large displays, the brand is extremely visible and has additional locations (in the outerwear section for example). Sweaters are priced between EUR 50 and EUR 230.
• Mrs. & Hugs is a bit more modern, having great success with cashmere in winter and summer dresses. The brand has the best private label margin, representing 40% of the women’s private label turnover. Customers think it’s a real brand. It is positioned at the same aspirational level as Essentiel Antwerp and Samsoe Samsoe. Since the brand is the most aspirational of all Breuninger’s private labels, they advertise the brand a lot online, on social media and in the store windows. The brand appeals to younger demographics and offers more frequent drops. Sweaters are priced between EUR 100 and EUR 300.
• Lilienfels represents 10% of the women's private label turnover. The brand is very classic, offering great materials like cashmere and leather. The margin is lower than for the other private labels (approx. the same margin as for national brands) as products are primarily ready-made designs from external suppliers. They maintain the brand as it sells well and doesn’t require too much manpower. Sweaters are priced between EUR 80 and EUR 350
• Johann & Johanna is a new premium brand with a higher price point, inspired by a traditional German wardrobe. The first results are great, with items 100% sold out in 2 months. Sweaters are priced between EUR 100 and EUR 200, with dresses up to EUR 530.
• Paul targets men between 30 and 50 and competes with brands like Fred Perry and Samsoe Samsoe. Shirts are priced between EUR 40 and EUR 200. The brand is showcased in different locations in the store.
• Strokesman’s is designed for older men as it is more classic. The brand competes with Marc O’Polo and Mr Marvis. Shirts are priced between EUR 50 and EUR 80.
• Finally, Breuninger has a home called Private Label, E.B. Home, which mainly offers home textiles.

Services build and nurture an active community of customers

With 636,000 residents, Stuttgart is a relatively small city. Besides, having a vast majority of local customers makes it key for a luxury retailer such as Breuninger to build a strong community of customers. To that end, they offer remarkable services:

• Recently rebuilt, the Beyond store loyalty programme is paramount to Breuninger’s strategy, knowing that more than 80% of the customers are local. The programme has four tiers: bronze, silver, gold, platinum. It is point-based (EUR 1 spent = 1 point) and offers various benefits such as cashback, early access to products and discounts, free shipping, event invitations, birthday presents, longer product returns and dedicated customer service.
• Most importantly, the loyalty programme offers two credit cards (basic and platinum), with which EUR 1 spent = 2 points. Seventy-one per cent of the turnover is made with Breuninger credit card holders. The platinum level equals EUR 7,000 spent annually and grants customers access to invitations to specific events and their dedicated customer service, fostering a sense of belonging and community.
• Seven personal shoppers pamper 3,100 active customers who are extremely attached to the store. The average basket with a personal shopper is more than ten times higher than what a customer purchases without such service. Several private lounges are available for personal shopping appointments. To increase the personal shopper customer base, Breuninger finances tickets to the opera or any relevant event for them to attend, introduce themselves, mingle and attract these potential new customers to Breuninger.
• Events: Breuninger was used to organise paid events proposed to their best customers. They were, for example, buying opera tickets to organise a special night for their best customers who pay for their tickets. These initiatives have been so successful in the past that Breuninger is now organising its own events. For example, they hire a singer, rent a venue, hire a catering company, and organise the whole event. Only customers who are part of the loyalty programme and spend at least EUR 7,000 annually are informed and can access those events. This is probably one of the most remarkable community-building initiative run by Breuninger.
• Customer service: in addition to traditional customer service, gift-wrapping and tax-free shopping, it includes a separate service for platinum customers, which is connected to the store staff office space. It is very common for customers to enter the office and ask for anything that they might desire. As a result, it is not the usual small and uncomfortable store office space: it’s airy, properly furnished and tidy.
• Click & collect: included in the customer service, it offers approximately ten fitting rooms equipped with special lights to try garments in different lighting conditions. Click & collect represents 28% of online orders.

They also offer services related to product categories:

• Runners: the women’s shoe section has runners to better serve customers who complained about being left alone when the sales staff went to the stockroom to fetch shoes. All shoes are equipped with a bar code scanned by the sales associates, who then choose the required size. During weekdays, the sales associates alternatively sell and act as runners. On Saturdays, Breuninger has dedicated runners. Depending on how busy the store is, shoes are delivered to the shop floor in one to three minutes.
• Made-to-measure: the department can make anything from suits to knitwear, shoes, belts and even denim pants. A suit is sold for between EUR 5,000 and EUR 10,000. The service is extremely successful. Breuninger is considering expanding it but lacks the highly skilled staff needed.
• Ski department and workshop: customers can buy or rent skis and ski shoes as Breuninger runs a ski workshop. During wintertime, customers must book appointments on Fridays and Saturdays as the department is extremely busy. During summertime, the staff working in the ski department is attached to the bike department.
• Luxury buyback: Breuninger partners with a luxury second-hand company coming in-store four times a year for customers to sell their luxury goods. Customers are given a Breuninger store voucher in exchange for the products. Breuninger finances an additional 10% voucher value.
• There are many F&B options, with almost one per floor: a candy tunnel in the kidswear department, a tiramisu bar in the women’s shoe section, Breuninger Sansibar restaurant, a champagne bar and confectionary on the ground floor, coffee shops on the first and second floors, a large restaurant on the fourth floor.

The Dorotheen Quartier exemplifies how Breuninger leveraged a real-estate project to create new sources of revenue. The thoughtfully designed mixed-use project has invigorated the area and set an alternative city centre, seamlessly blending luxury shopping, dining, residential, and office spaces to create a lively urban ecosystem. Meanwhile, the flagship Breuninger flagship store showcases a deep understanding of consumer needs with its curated and clearly segmented departments, strategic private-label offerings, and exceptional customer services, from personal shoppers to bespoke tailoring and a tiered loyalty programme that fosters long-term engagement. Ultimately, Breuninger’s success is rooted in its ability to maintain deep and personalised connections with its community of customers.

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 a presentation by Cihan Yildiz, Boyner's CTO, describing the company’s journey into this field. Today, Boyner Grup uses AI in various use cases after taking the necessary steps to ensure the company structure was adapted.

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: how AI is a game-changer for all industries

Artificial Intelligence (AI) has traditionally been defined as replicating human intelligence using machine algorithms. Over time, research and technological advancements in machine learning and deep learning have substantially expanded the scope of AI. These developments enabled computers to recognise images, understand speech, and perform tasks like facial recognition, which once seemed futuristic. The arrival of Generative AI, propelled into the mainstream by solutions such as ChatGPT, represents a particularly significant milestone. Some commentators describe the launch of ChatGPT as an “iPhone moment,” meaning it heralds a new phase of AI maturity where advanced language capabilities become available to a broad audience.

Yildiz attributes this accelerated growth in AI partly to the near ubiquity of smartphones, which now serve as vast data generators. This surge in data, coupled with more sophisticated algorithms, has opened the door to various innovative solutions that were almost unimaginable a few years ago. Generative AI exemplifies these advancements by using large datasets and specialised learning techniques to produce new content, drive complex analysis, and engage in nuanced conversations in efficient and highly adaptable ways. It is this aspect of AI—its agility and creativity—that many experts believe will shape the next wave of business and consumer applications.

Business perspectives

Boyner regards Artificial Intelligence (AI) as a powerful catalyst for transformation across numerous industries, especially retail, where data-driven decision-making can dramatically improve efficiency and spark innovation. According to Yildiz, who has led several AI initiatives at Boyner, businesses should adopt a systematic approach to AI implementation to leverage its full potential. During his presentation, he underscored the importance of understanding AI’s evolving capabilities, its immediate applications, and its expected long-term impact on operations and customer engagement. His perspective highlights that AI can remarkably quickly reshape an organisation’s strategies, processes, and culture when introduced through carefully chosen projects.

Current forecasts suggest that Generative AI will attract around three trillion US dollars in investment between 2023 and 2027 globally, indicating the extent to which companies believe in its transformative capacity. Nearly half of all technology companies are expected to embed Generative AI into their offerings, a sign that AI is becoming not just a technical addition but a foundational element of future products and services. Enterprises typically move through three distinct phases when they adopt AI: first comes the learning phase, during which teams become familiar with AI tools and concepts; second is the testing phase, which involves running small pilots to validate new ideas; and finally, the investing phase, where proven AI models are scaled to the enterprise level.

Even though only a fraction of AI use cases today explicitly involve Generative AI, results show that those use cases alone can drive notable increases in efficiency and customer satisfaction. Studies indicate a nearly thirty per cent improvement in operational efficiency, matched by a thirty per cent uplift in customer experience measures. Projections for the future amplify this trend. By 2028, a third of enterprise software is expected to include agentic AI features, compared to a negligible portion in 2024. Similar shifts are anticipated in digital storefronts, where a significant share of interactions could be managed by AI tools rather than human agents, and in daily work decisions, an increasing number of which will be delegated to AI systems that can analyse data and deliver real-time recommendations.

How Boyner crafted its vision and roadmap

In its approach to AI, Boyner has closely followed Gartner’s strategic guidelines, focusing on high-impact opportunities, including price promotion strategies, optimisation of markdown processes, and improvements in in-store product availability. The company also prioritises personalisation, social media monitoring, and demand forecasting. Leveraging these focus areas, Boyner articulated five central pillars that define its AI roadmap: personalisation, data-driven insights, efficiency, innovation and creativity, and continuous improvements.

The company’s priority is personalisation, which aligns with the ongoing Boyner Now initiative and other efforts to tailor experiences for individual customers. Boyner also intends to develop a platform that generates data-driven insights, allowing it to consolidate all relevant data and transform it into accessible, actionable information.

Furthermore, Boyner remains committed to operational efficiency, building upon Gartner’s assessment that AI could help address nearly a quarter of retail's overall costs. Alongside these goals, the organisation embraces creativity and innovation as essential catalysts for new AI-driven solutions, ensuring that experimentation is encouraged at all levels.

The final pillar is the cultivation of a Kaizen-style system of continuous improvement, a principle that guides Boyner in regularly assessing and refining its AI applications to keep pace with rapidly evolving technologies and market demands.

Using partnerships to become AI-ready

To put these ideas into practice, Boyner devised a strategy it calls “AI readiness,” designed to ensure that every relevant stakeholder, from data scientists to C-level executives, understands AI's value proposition and is equipped to manage its risks and benefits. This process begins by defining a clear vision and identifying what AI can accomplish for the organisation. Boyner also articulates key performance indicators that guide measuring success, highlighting aspects such as revenue impact, customer satisfaction, and risk mitigation.

Collaborations with key partners like Gartner and Microsoft form another critical dimension of this readiness strategy. While Boyner maintains in-house development capabilities, it also relies on external expertise to stay aligned with cutting-edge advancements. Aligning AI with Boyner’s broader organisational strategy is a critical first step, ensuring that all departments recognise how AI projects serve shared corporate objectives. Boyner invests in awareness programs, teaching employees about Generative AI and providing them with tools built on Microsoft’s OpenAI services. The company encourages grassroots innovation by offering workshops and safe sandbox environments and ensures that the best ideas are brought to light. Following these initial learning and testing stages, Boyner evaluates all AI use cases and solutions based on ethical principles and data privacy standards and ultimately presents a tactical roadmap backed by executive sponsorship.

Current AI use cases

Boyner’s commitment to AI is exemplified by the fact that every new or experimental AI solution it develops moves swiftly into production, where it can deliver real value.

One such example is the automation of order and product sorting, allowing the logistics team to handle items more efficiently across the supply chain. In addition, Boyner has introduced an AI-based product import tool that extracts attributes from product images and retrieves any missing details through web scraping, significantly reducing the time and manual effort required to add items to its e-commerce catalogue.

Personalisation efforts take shape through micro-segmentation, allowing Boyner to offer tailored promotions, such as raincoat discounts only in regions experiencing adverse weather conditions. The marketing team has also implemented sophisticated in-house Marketing Mix Models to allocate budgets strategically, incorporating profitability targets and, in the future, data from CRM systems and omnichannel sources.

Another key innovation involves a Semantic AI Assistant that improves the e-commerce platform’s user experience through content summarisation and intelligent responses to customer inquiries. Moreover, Call Center voice-to-text transcription has been introduced to capture and analyse customer conversations, further enhancing service quality.

While these AI solutions bolster operational efficiency and customer satisfaction, Boyner has also championed Generative AI-driven chatbots. These include tools that assist customers in choosing gifts, manage stock levels in real time, and even handle internal human resources inquiries, as evidenced by the success of the People Chat application.

To unify these efforts, Boyner consolidated four disparate data warehouses into a single AI-ready platform, making it easier to draw connections between different data points and support informed, evidence-based decision-making.

Boyner’s journey with AI offers a compelling example of how an organisation can systematically integrate data-driven solutions into its operations and thereby reshape its future. By paying close attention to the learning, testing, and investing cycle, and by forming strategic alliances with prominent technology partners, Boyner has managed to introduce AI solutions that deliver tangible benefits. These benefits range from logistical efficiencies and robust customer experiences to increased creative capacity and a forward-looking corporate culture.

Yildiz concluded that Boyner’s focus on empowering all employees to experiment with AI tools—while maintaining strict safety and privacy protocols—goes a long way toward embedding AI in the company’s DNA. This approach secures buy-in from both leadership and frontline staff. As Generative AI continues to mature, Boyner looks to deepen its expertise, exploring new frontiers in retail automation, customer personalisation, and knowledge management, all while keeping an eye on responsible practices. In doing so, Boyner serves as an illustrative case study for other organisations: the potential of AI to drive meaningful change is substantial, but realising that potential requires consistent engagement, thorough preparation of data, and a measured, adaptable roadmap.

Credits: IADS (Selvane Mohandas du Ménil)

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Riding the AI wave: decision-making tools for department stores

The IADS Academy programme, a 29-year-old tailor-made mentoring workshop open only to our members’ high potentials, promotes cooperation and future orientation. Over the years, the IADS Academy has trained 190+ executives from 29 companies in 22 countries, some of whom reached top positions in member and non-member companies (for IADS member companies alone, 4 CEOs).

The 2024 topic was as follows:

AI and department store activities - Given the number of possible AI applications, how can retailers develop a decision-making tool (in terms of investments, teams and time)?

Once in the forecast, how can they decide and prioritise the right areas of application (examples: product development, customer loyalty, in-store operations, productivity-saving operations...)?

The following is an attempt to report all insights the Academy group considered and worked on during the journey to their final presentation shown to the IADS member CEOs.

Introduction: department store's never-ending transformation

The retail industry is undergoing the AI seismic shift and department stores, long-standing symbols of traditional commerce, are in the midst of this transformation. AI is no longer a futuristic concept but a technological breakthrough, as were the printing press, electricity, and the internet, making it a present-day reality and necessity. As for those game-changing innovations, AI is designed to make life easier, especially in an increasingly complex world.

To navigate this complex landscape, department stores need tools that not only assess their readiness for AI but also guide their strategic decisions. Those are the two value propositions introduced by the 2024 IADS Academy cohort. This article explains their findings on creating a decision-making tool for AI initiatives in department stores, exploring the challenges, solutions, and opportunities that lie ahead.

The paradigm shift: from human to “machine customers”

Attracting customers and hopefully catching a share of their wallets is at the core of any retail company. These customers, so far human beings, are difficult to navigate as their emotions drive them. Also, they are impulsive, lazy, highly demanding, and easily distracted, especially with a shrinking attention span. They are often late and lack urgency. To answer this, department stores spent decades and immense resources such as advertising and marketing campaigns, CRM and loyalty programmes, data analytics systems, and sales strategies to target and reach these coveted human customers.

Customers have always evolved over time, but technology drives a new type of evolution. What can be called “bound customers” came to life with the rise of Web 2: these human customers are supported by machines executing requests, such as when they shop online. Department stores had to adapt to answer the needs of this new omnichannel breed. The next type of customer is not totally there yet, but retailers have started dealing with what the Academy called “adaptable customers”: leads are shared with the machine, and the machine executes.

Tomorrow, retailers will serve AI-powered “machine customers”, with the machine leading and executing, a fundamental paradigm shift for retail. While its human counterpart will still exist as a department store customer, the “machine customer” will develop and require new adjustments, yet again. Analytical and logical, highly observant, goal-focused, tireless, and emotionally unaffected, equipped with a strong memory, they will operate autonomously and make purchasing decisions based on extensive research.

This future is already there, as proved by Perplexity AI's latest innovation. In November 2024, they launched an AI-powered shopping assistant in the US that allows users to research and purchase products directly through its platform. This new feature, “Buy With Pro”, streamlines online shopping by enabling one-click checkout for select products, saving users time and enhancing their shopping experience. If “Buy With Pro” is unavailable for a product, users are redirected to the merchant's website to complete their purchase. Additionally, Perplexity AI offers a visual search tool called “Snap to Shop”, which allows users to find products by uploading photos. The assistant integrates with platforms like Shopify to provide unbiased product recommendations tailored to users' searches.

AI disruption is on the way for all economic sectors. In retail, analytical AI already supports better customer segmentation, predictive maintenance and fraud detection, to name a few. For department stores, generative AI has become a reality as it already generates content, code and efficient chatbots. What comes next is multi-modal AI, which can think, feel, process, and create.

This shift underscores the urgency for department stores to adapt to a new reality where human and machine customers coexist. Using the surfing metaphor, retailers should take steps to catch the AI revolution wave, deciding whether to ride it or let it pass and paddling hard to catch it before it crashes over them. The Academy's message was clear: AI is not just a trend but an imminent wave that must be embraced.

Assessing department store AI-readiness: the AIRI framework

To help department stores navigate this wave, the Academy cohort introduced the Artificial Intelligence Readiness Index (AIRI), a comprehensive assessment tool designed by the University of Singapore to evaluate an organisation's readiness for AI adoption. Based on extensive research and testing, AIRI focuses on five critical pillars to evaluate company readiness:

• Business value to understand how AI can generate tangible benefits.
• Organisation to gauge the cultural and structural adaptability of the company.
• Infrastructure to ensure the availability of robust technological foundations.
• Data, as its quality and accessibility, should be assessed.
• Ethical practices to establish governance frameworks to manage risks and ensure compliance.

The assessment tool has four levels:

• Unaware: staff in the organisation perceive AI as a threat to jobs and do not understand its potential.
• Aware: the organisation and its employees trust AI applications.
• AI-ready: the organisation trusts AI applications, has the necessary resources and infrastructure, and is ready to move forward.
• Competent: the organisation is at the forefront of AI and sets the standards for others.

The AIRI framework operates like a game of Jenga: if one pillar is weak or missing, the entire structure risks collapse. By scoring organisations across these four dimensions, AIRI provides actionable insights into where improvements are needed. For instance, some companies might excel in infrastructure but lag in ethical practices or data quality. The tool also offers two approaches to implementation: top-down (organisational level) and bottom-up (functional level). This flexibility allows department stores to tailor their AI strategies based on specific needs and priorities.

The Academy group used the AIRI tool to assess their departments and companies and found that most department stores fall between the Unaware and Aware levels. During the Academy presentation, CEOs were invited to quickly evaluate their AI level (without using the AIRI tool), and most considered their organisations AI-ready. This discrepancy shows how relevant it would be for departments and organisations to use the AIRI tool.

A new team member: Lola, department stores’ AI instructor

The Academy introduced a second value proposition in the form of a department store-only generative AI tool, Lola (a name randomly chosen by the Academy group), a new department store team member. While AIRI provides a roadmap for readiness, Lola, the AI chatbot built by the Academy cohort, acts as a guide for execution. Developed over a few months using data from IADS members and other reliable sources, Lola is specifically tailored for the retail industry. Lola is not just another chatbot but a generative AI tool designed to provide tailored, contextualised insights and actionable recommendations.

Lola’s capabilities were demonstrated live during the Academy presentation to CEOs. Its responses were not only more relevant than any generic gen AI tool, but also enriched with examples from real-world department store information. Unlike generic AI tools like ChatGPT, Lola is fed with precise retail-specific data curated by experts. This makes it uniquely positioned to address challenges faced by department stores, from optimising foot traffic analysis using CCTV footage to improving conversion rates through advanced customer segmentation.

However, Lola is still in its “infancy”, as it is a proof-of-concept that requires continuous learning and refinement. To grow into a robust decision-making assistant, it needs to be nurtured with high-quality data aligned with ethical standards.

Building an experimental culture within organisations and beyond: leveraging the IADS resources

One of the key takeaways from the Academy cohort was the importance of fostering an experimental culture within organisations. AI adoption is not just about technology; it requires a mindset shift at all levels of management. Leaders must champion innovation while ensuring that employees feel empowered rather than threatened by AI. Management support goes beyond CIOs or CTOs, it starts with CEOs and executive sponsors who set the tone for organisational change. They also highlighted the need for upskilling employees to handle new responsibilities brought by AI technologies.

In the future, the Lola experiment should use the endless resources of the IADS. Lola would be fed not only with broad information about AI but also with AI-specific data from IADS members and all the data from the IADS years of research. While it will support IADS members' decision-making about AI, it will become a broader information tool for members to ask about any topic and get an answer instantly. To make Lola a reality, IADS members and the IADS need to establish governance guidelines, guarantee a secure environment and establish the use process.

Conclusion: catching the AI wave together

The journey toward AI adoption in department stores is akin to mastering the art of surfing: it demands observation, vigilance, preparation, and agility. Through their dual value propositions, the AIRI assessment tool and the pioneering Lola generative AI agent, the Academy group has laid a foundation for a structured and practical approach to AI adoption. By identifying readiness gaps and fostering a culture of education and trust, the AIRI tool offers a clear roadmap for organisations navigating the complexities of AI integration. Meanwhile, Lola shows how generative AI can be tailored to the unique needs of the retail sector, providing actionable insights and decision-making support. Lola can certainly become the IADS members’ private agent.

As one presenter aptly noted during the Q&A session, “AI is not just a tool; it’s a way of doing things.” By aligning AI initiatives with business strategies and fostering collaboration across teams, department stores can ride the AI wave with confidence.

Credits: IADS (Christine Montard)

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Introducing the NRF Big Show

The 2025 edition of the NRF Big Show took place last 12-15 January 2025. It was reportedly a record show, with an attendance of more than 40,000 visitors from 105 countries, 1,000 exhibitors and 500 journalists . Just like last year, the lines were long, and energy was palpable, even though one can wonder if traffic was evenly distributed over all days or if more action took place on day one, with the audience then disseminating in side events, meetings and visits during the following days.

The sense of energy was also echoed in the streets and stores of New York, with a clear message: the US market is back on track, confident and optimistic. NRF reported that US sales in December were up 2.19% month-on-month in December and +8.41% year-on-year, thanks to a well-performing Thanksgiving.

The key outcomes of the conferences and events were :

-    AI is now a tangible reality, with many exhibitors claiming to be part of the game (to the point of saturation). Many use cases are already in use in stores or within companies: Dick’s Sporting Goods uses an AI-powered pricing model to handle its markdown strategy across 11m SKUs. This re-orients the conversation: the story is not anymore about “AI or not AI” but “how to deal with investments, ROI and potential financial risks when implementing AI in operations?” as successful implementation requires substantial investment and a willingness to embrace trial and error. Somehow, this guides the implementation of new use cases towards simpler ones with more immediate ROI, which might explain the following:

• The omnipresence of computer vision in fraud detection as presented by Diebold Nixdorf, Zebra, and Microsoft,
• 3D assets for faster ad creation and “digital twins” for warehouse management, as touted by NVIDIA in the opening keynote, with Lowe’s creating a digital twin of its 1,700 stores to simulate various layouts and optimise merchandising.
• Going further than “simple” AI, Agentic AI was the big buzzword, with Microsoft presenting an agent that indicates the SKUs to move from warehouse to stores according to real-time sales. Google, NVIDIA, Salesforce, and SAP all announced similar new launch announcements.

-    Unified commerce: Customers are increasingly hungry for seamless personalisation across all channels through digital tools and platforms, interpreted by many as “physical retail has a future, provided it reinvents its stores to acquire more data and becomes competitive with e-commerce”. H&M announced during the conference a testing campaign with RFID coupled with AI, allowing salespeople to localise products better and be assisted during the sale process. Many guest speakers insisted on the importance of in-store experience, with the prediction of seeing in 2026 the rise of “fantailing”, embodied by Taylor Swift: spending is increasingly driven by entertainment, events and cultural passions.

-    Gen Z and Alpha customers are an increasing reality that retailers need to consider (especially given that Gen Z is more eager to visit a physical store than a Millennial). This raises questions about their concerns, such as sustainability, its costs, what needs to be done, the regulatory environment, or how to remain time-proof and culturally relevant.

IADS Note: From a more general perspective, our take is that this edition displayed an AI-powered frenzy, with acres of exhibition space dedicated to suppliers often offering “magical” solutions to retailers. In our opinion, which is shared with some analysts, one of the issues retailers now face is to cut through the noise and be able to select the right AI solution in a jungle of options, many of which seemed to be “solutions looking for a problem”, simply forgetting that AI is a facilitator. Another significant issue is to ensure cybersecurity as AI implementations open up the range of available vulnerabilities. This is why the IADS has re-ignited its partnership with the Retail and Hospitality Information Sharing and Analysis Center (RH-ISAC).

What follows is a subjective selection of conferences, news and stores that we believe could be interesting for our members as we try to cut through the noise and self-promoting topics.

Heritage meets innovation: Digital growth strategies with Mattel and Reebok – Jamie Cygielman, Sr VP/GM, American Girl, Ivy Solari, VP digital commerce, Reebok.

American Girl's journey from its 1986 origins as a catalogue-based business sending out 500,000 mail orders to its current status as a digital-first retailer under the Mattel umbrella demonstrates the brand's adaptation to changing consumer behaviours. The company leverages its first-party data to understand customer buying patterns, collection preferences, and demographic information. Their rewards programme has become a key tool for building customer relationships through various initiatives, including e-certificates, exclusive events, and product launch priorities.

Reebok's transformation has been equally significant, though following a different path. Originally a wholesale-focused footwear and apparel manufacturer, the company has undergone substantial organisational changes. Following Adidas's divestiture, Reebok's intellectual property is now owned by Authentic Brands Group (ABG). U.S. operations were recently transferred to Galaxy Universal from Spark, which has merged with JCPenney to form Catalyst brands.

The physical retail strategy of both brands reveals distinct approaches to customer engagement. American Girl operates flagship stores in key locations like New York City and Chicago, alongside newer expressions in Los Angeles and Dallas. These stores exemplify the "retailtainment" concept, offering experiences beyond traditional shopping, including tea services, doll hair salons, and celebration spaces. The strategy has proved successful, with store visitors spending 25% more over their lifetime with the brand than non-store customers.

Reebok's retail presence has historically focused on outlet locations targeting value-driven consumers, but plans are underway to expand into full-price, experiential stores by 2025-2026. The brand maintains a strong wholesale presence across various channels, from big box stores like Costco to fashion-forward retailers like Urban Outfitters.

Digital engagement strategies have evolved significantly for both brands. American Girl's social media success relies heavily on video content across Instagram Reels and TikTok, structured around three pillars: cultural trends, nostalgia, and storytelling through dolls. The brand has found particular success with micro-influencers, perceived as more authentic than traditional high-follower influencers. Their YouTube strategy, primarily through YouTube Shorts, has effectively driven demand among younger audiences while maintaining traditional catalogue distribution for its proven effectiveness in driving child engagement.

Reebok's digital strategy emphasises partnerships and cultural relevance. The brand recently announced collaborations with athletes like Bryson DeChambeau and maintains relationships with basketball icons Shaquille O'Neal and Allen Iverson. The brand has successfully executed cross-industry collaborations, such as its Barbie-themed product line with Mattel, demonstrating its ability to leverage partnerships for broader market appeal.

Both companies are carefully balancing upper and lower-funnel marketing investments. American Girl maintains year-round brand campaigns while intensifying lower-funnel activities during the critical fourth-quarter holiday season. Reebok has recently increased upper-funnel investment with its new brand campaign while maintaining strategic lower-funnel activities during key selling periods.

Key takeaways:

1. Data-driven omnichannel integration is critical: Modern retail leadership requires seamless integration of digital and physical channels, powered by robust data analytics. American Girl's utilisation of first-party data from its house file and rewards program, combined with its experiential retail locations, has created a 25% lifetime value increase for store visitors. Data-informed omnichannel strategies can significantly enhance customer value and brand engagement.
2. Physical retail evolves beyond traditional commerce: To remain relevant, physical retail spaces must offer more than transaction opportunities. American Girl’s success with experiential elements like tea services, doll hair salons, and celebration spaces demonstrates that stores should function as brand experience centres. This is further reinforced by Reebok's strategic .pivot from purely outlet-focused locations to planned experiential stores.
3. Social media strategy requires authentic, platform-specific approaches. Both brands' experiences highlight the evolving nature of social media engagement in retail. The shift from high-follower influencers to micro-influencers demonstrates the growing importance of authentic content over reach. The success of video content across platforms like YouTube Shorts, Instagram Reels, and TikTok, combined with platform-specific content strategies, shows that retailers must develop nuanced, platform-appropriate content strategies rather than taking a one-size-fits-all approach to social media.

Game-changing: Culture’s influence on navigating volatility and fueling long-term growth – Brian Cornell, CEO, Target, Abubakarr Bangura, Group Vice President, Target, Michael Bush, CEO, Great Place To Work

Over the past 11 years, Target has added $35 billion in revenue, representing a 50% increase in size, while building 250 new stores and remodelling 1,200 locations. The company has expanded its workforce to over 400,000 team members, developed a $30 billion own-brand portfolio, and tripled its digital business. Cornell emphasised that these achievements weren't simply the result of boardroom decisions but were driven by investments in people and culture.

The company's culture, centred on “care, growth, and winning together”, has proven to be a powerful differentiator (even though Cornell admitted it was often easy to forget the “care” part of the motto). This is evidenced by metrics from Great Place to Work surveys, showing that 70% of Target employees consider it a great workplace and feel personally cared for. The company ranks third on the Best Workplaces in Retail list and leads among organisations with over 100,000 employees.

Abubakarr Bangura, a high-ranking Target executive, was invited on stage as a testimony of this policy. Bangura’s journey from Sierra Leone to leading 80 Target stores across five states in one of America's fastest-growing regions exemplifies the company's commitment to talent development. His region has experienced 14% population growth and attracted over $100 billion in new income across states like Texas, Florida, the Carolinas, Georgia, and Tennessee, serving as an innovation hub for the company's latest initiatives.

Target's approach to leadership development is particularly noteworthy. The company recently launched a six-month-long Store Director Development Programme, co-created with store directors, which has already shown remarkable results. Among the 1,000 participants (out of a total target of 2,000), 100% believe they can grow their careers with Target, and 92% report improved performance. The program's success stems from its collaborative design.

The discussion also addressed the issue of AI in retail. Target has implemented an AI chatbot called Stores Companion, which helps frontline teams with operations and customer experience. Rather than viewing AI as a threat, Target positions it as a growth enabler, similar to how e-commerce has created new opportunities. The company's unique model, where stores fulfil 95% of sales, demonstrates how technological integration can enhance rather than replace human roles.

Investment in employee education remains a priority, with Target's Dream2B program offering tuition-free education opportunities. Notably, 90% of programme participants are frontline workers, highlighting the company's commitment to developing talent at all levels.

These investments have yielded tangible results, with Bangura’s region seeing a 71% improvement in store director retention and a 63% reduction in executive team turnover over three years, leading to a 4-5 point improvement in guest experience scores.

For retail leaders navigating similar challenges, the discussion emphasised several key principles:

-    Listening to frontline teams,

-    Investing in talent development regardless of company size,

-    Maintaining human connection while embracing technological advancement.

Cornell stressed that success in retail's future will depend on effectively balancing technological innovation with meaningful human interaction.

Key Takeaways:

1. Culture of care is fundamental to success: Target's success demonstrates that prioritising a culture of care is not just about employee satisfaction but drives business performance. With 7 out of 10 employees saying they feel cared for as people (not just employees), and an 83% retention rate, Target's approach shows that investing in people yields tangible results. This is evidenced by their store director development programme, which achieved 100% of participants feeling they could grow their careers with Target, and 92% reporting improved performance.
2. Leadership development must be co-created and systematic: Target's approach to leadership development emphasises the importance of co-creation with frontline leaders and systematic implementation. Their six-month store director development programme, co-created with store directors, has been scaled to 2,000 leaders. This systematic approach to development has led to concrete results, including a 71% improvement in store director turnover rates and a 63% improvement in executive team turnover rates over three years, directly impacting operational performance and guest experience scores.
3. Technology integration requires a growth-focused culture. As retail faces AI and technological transformation, success depends on creating a growth-focused culture that helps employees embrace change rather than fear it. Target's approach includes:

• Implementing AI tools like their Store Companion chatbot while simultaneously investing in employee development,
• Offering programmes like Dream2Be (tuition-free education) with 90% participation from frontline workers,
• Maintaining a balance between technological advancement and human interaction, recognising that both will be crucial for retail's future.

Three brands, one growth strategy: The power of Macy’s, Inc.’s bold new chapter – Tony Spring, CEO, Macy’s Group, Olivier Bron, CEO, Bloomingdale’s, Maly Bernstein, CEO, Bluemercury

Macy's Inc. is implementing its "Bold New Chapter" strategy, a three-year transformation plan adressing fundamental retail challenges while positioning its portfolio brands for future growth. The strategy emerged from consumer research involving 60,000 customer interviews and focuses on enhancing retail fundamentals: merchandise assortment, service experience, marketing modernisation and supply chain efficiency.

According to Spring, early results are promising, with the company reporting positive indicators in its initial execution phase. Specifically, Macy's has seen three consecutive quarters of improvement in net promoter scores and comparable store sales growth in its first 50 focus stores, where enhanced merchandise assortment, improved visual presentation, and reinforced fitting room service have been implemented. The company also leverages advanced technologies, particularly in inventory operations, using algorithmic approaches to optimise fulfilment and reduce split shipments.

Blue Mercury has consistently performed in 15 consecutive quarters of comparable sales growth. The beauty retailer's success stems from its neighbourhood-focused approach and personalised beauty consultation model. CEO Maly Bernstein emphasised the company's strategy of creating custom beauty plans for customers, supported by enhanced staff education and training and a recent brand refresh that reinforces its position in luxury beauty for modern consumers.

Under new CEO Olivier Bron, IADS Member Bloomingdale's is executing its strategy of elevating the brand from aspirational to luxury positioning. Bron highlighted the unique customer mix and brand assortment that distinguishes Bloomingdale's, emphasising that its customers are often exclusive to the brand and not typically found in standalone luxury boutiques. In luxury, customers are not that interested in buying a product than an exciting and compelling story, which is why Bloomingdale’s focuses on experience and relationship to convey that story to them. As a consequence, Bron mentioned that a key area of investment was in the stores themselves, to be coherent with this strategy. Also, he noted that such a strategy was a good answer to the growing culture of “dupes” in the US.

Addressing the persistent question of department store relevance, Spring defended the format's viability, reframing it as a "physical marketplace" model offering unique merchandise curation and channel flexibility advantages. While remininding that the company was closing up to 150 stores, he emphasised that the portfolio approach, combining Macy's, Bloomingdale's, and Blue Mercury, provides significant operational synergies in warehousing, legal, finance, and brand negotiations (even though he acknowledged that these brands' value might not be fully reflected in Macy's share price).

Adressing integrating artificial intelligence in retail operations, all three brands leverage AI for personalisation, forecasting, and planning while maintaining a careful balance between technological advancement and human connection. Spring highlighted the ongoing tension between privacy and personalisation, emphasising the importance of responsible data usage in building customer trust.

Regarding the current retail environment and potential policy changes, Spring addressed concerns about tariffs and immigration policy impacts, noting that the company has experience navigating similar challenges from 2016 to 2017 through supply chain diversification and partner collaboration. The consequence of the upcoming regulatory shift on immigration remains a question mark.

The executives' assessment of the American consumer revealed an optimistic outlook, with customers characterised as both cautious and excited about retail's future. Bron emphasised consumers' desire for inspiration and exceptional experiences. At the same time, Spring noted the intersection of technology and humanity in current retail dynamics through establishing fair and mutually beneficial trading relationships with the rest of the world.

Key takeaways:

1. Transformation through consumer-centric strategies: Macy's Inc. is undergoing a significant transformation with its "Bold New Chapter" strategy, rooted in extensive consumer research. The company focuses on retail fundamentals such as enhancing merchandise assortment, improving service experience, modernising marketing efforts, and optimising supply chain efficiency. This consumer-centric approach is yielding positive early results, with increases in net promoter scores and store sales growth.
2. Leveraging brand synergies and AI: The portfolio of Macy's Inc., including Macy's, Bloomingdale's, and Blue Mercury, benefits from operational synergies that support backend efficiencies and brand negotiations while maintaining distinct brand identities. The use of AI across operations to enhance personalisation, forecasting, and planning exemplifies how technology can be integrated to augment both customer experience and operational efficiency, while still preserving the human element in retail.
3. Positioning for the future amidst external challenges: The leadership remains attentive to external economic and policy challenges, such as tariffs and immigration changes, which could impact operations. However, they are ready to adapt through strategic diversification and collaboration.

Lacing up for success: Transforming retail experiences and deepening customer relationships - Mary Dillon, CEO Foot Locker

Foot Locker celebrates its 50th anniversary by reimagining its approach to an evolving consumer while staying true to its heritage. Its strategic vision centres on becoming the premier destination for sneakers and discovery across its various banners, including Foot Locker Global, Kids Foot Locker, Champs Sporting Goods, and WSS.

The company's transformation is built on three fundamental principles:

• Enhancing customer satisfaction through the "Power Portfolio" initiative. A cornerstone of this effort is the new “Reimagined” store concept, with eight locations already operational worldwide, including a flagship store on 34th Street in New York City. These stores feature innovative elements such as the "Drop Zone" showcasing trending products, the "Kick It Club" for communal try-ons, and customisation stations. The basketball-focused "Home Court" section pays homage to the company's legacy while offering a multi-brand experience featuring Nike, Adidas, and Puma products. By the end of 2025, Foot Locker plans to have refreshed approximately two-thirds of its global fleet of 2,500+ stores. Regarding digital, the company launched a completely redesigned mobile app on major platforms, integrating seamlessly with its enhanced loyalty programme. This revamped loyalty system extends beyond providing access to product launches, incorporating broader rewards, perks such as free shipping and returns, and unique experiences like NBA game access.

• Leveraging the expertise of their "stripers" (store associates), thanks to a practical approach to in-store technology, including equipping them with handheld devices for improved inventory visibility and point-of-service access, as well as implementing virtual shoe sizing technology, especially in the kids' section. These technological enhancements enhance operational efficiency while allowing staff to focus on customer interaction.

• Fostering strategic growth partnerships with brands: a multi-year agreement with the NBA as an official marketing partner and a collaboration with the Chicago Bulls demonstrate Foot Locker's commitment to maintaining its leadership position in basketball culture. These partnerships manifest in various initiatives, including major activations during events like NBA All-Star Weekend.

Despite broader industry challenges, including a tough recent quarter, Foot Locker remains ahead of its transformation goals. Expanding into women's footwear has emerged as one of the company's fastest-growing segments. This expansion aligns with the company's goal of broadening sneaker culture and attracting new consumer segments while maintaining strong relationships with core customers.

Key Takeaways:

1. Reimagining the retail experience: Foot Locker's "Power Portfolio" initiative boldly redefines the in-store experience, emphasising innovation and customer engagement by focusing on creating a vibrant, experiential shopping environment that celebrates sneaker culture.
2. Digital transformation and integration: The redesign of Foot Locker's mobile app and the enhancement of the loyalty programme demonstrate a pivot towards digital integration. By linking the app with loyalty rewards and offering features like virtual shoe sizing, Foot Locker is enhancing the customer journey and ensuring that digital investments translate into tangible benefits.
3. Strengthening brand partnerships and cultural ties: Foot Locker's renewed focus on basketball, through partnerships with the NBA and the Chicago Bulls, underscores the strategic value of aligning with cultural icons and sports heritage. These partnerships reinforce Foot Locker's brand identity and solidify its leadership in sneaker culture.

Interesting stores:

Note: we will add the locations below to the New York City Guide.

Dyson SoHo, 155 Mercer St.

Banana Republic SoHo, 552 Broadway

Whole Foods Market Daily Shop, 1175 Third Avenue

Skims, 647 5th Avenue

A subjective selection of innovative startups - AI

The NRF Retail’s Big Show replaced this year the “Innovation Lab” exhibition space by the “Innovator Showcase”, a selection of 50 companies already in operation and with robust solutions (the Innovation Lab was more a showcase for POCs). Here is a selection of companies from this space:

Lili AI: a natural language tool that enriches product attributes on e-commerce platforms according to consumers’ searches and sends them to Google Ads or other recommendation tools. Revenue is said to grow +3 to +25% thanks to this solution, which is already used by Macy’s or Abercrombie & Fitch.

G2RL: a tool allowing to predict and recommend what to do with returned products, make the best economic decision and look for re-commerce opportunities.

Vanish Standard, a Japanese company allowing store employees to create content for their e-commerce websites. The platform measures customer engagement and employees are commissioned on sales made through this new tool. CLV is said to triple for customers interacting with these videos.

Curated for you: a tool that personalises product pages and content according to customers’ tastes and expectations.

Credits: IADS (Selvane Mohandas du Ménil)

PRINTABLE VERSION

IADS recently held a meeting spotlighting the men’s fashion brands and trends that stood out in 2024 and are set to lead the way in 2025. Backed by thorough market research, IADS and NellyRodi shared a handpicked selection of 18 brands to keep on your radar for the year ahead.

Take a closer look at these standout names and explore the photos by clicking the button above!

MUST HAVE

AIMÉ LEON DORE

Based in Queens, NY, Aimé Leon Dore is renowned for blending streetwear with classic and preppy influences, offering a modern vintage aesthetic that plays with streetwear culture. Known for collaborations with brands like New Balance and Porsche, Aimé Leon Dore creates powerful, timeless designs that redefine streetwear with an edge.

Check out the Aimé Leon Dore website here

CHECK OUT Aimé Leon Dore INSTAGRAM

LEMAIRE

Lemaire is distinguished by its understated elegance and gender-neutral style, merging Parisian chic with Asian influences for a modular wardrobe. Known for luxury quality, the brand features loose cuts, fluid lines, and neutral colours, using high-quality fabrics from Europe and Japan to emphasise craftsmanship.

Check out the LEMAIRE website here

check out LEMAIRE instagram here

NORSE PROJECTS

Norse Projects is a Danish brand renowned for its minimalist and functional style, deeply rooted in workwear traditions. It offers a perfect balance between style and utility, crafting high-quality products designed to endure. Known for its Nordic casual elegance, Norse Projects transcends being just a brand—it's a lifestyle choice, emphasising durability and timeless design in modern menswear.

Check out the nores projects i website here

check out norse projects instagram here

OFFICINE GÉNÉRALE

This Paris-based brand is recognised for thoughtful clothes that blend casual officecore with upscale allure. Officine Générale modernises tailoring through iconic pieces like relaxed jackets and perfect-fit trousers. The brand's ethical mindset and multi-generational appeal are reflected in every aspect of its collection.

CHECK OUT THE OFFICINE GÉNÉRALE WEBSITE HERE

Check out Officine Générale instagram here

CASABLANCA

Casablanca is celebrated for its luxurious designs that blend leisurewear with a sporty aesthetic. Drawing on its founder's dual heritage, the brand fuses Parisian elegance with Moroccan charm, offering high-quality pieces with bold prints and rich colours. Its playful sporty aesthetic evokes a high-society lifestyle, using tailoring techniques to create tennis-inspired statement pieces that reflect its Mediterranean roots.

check out the CASABLANCA website here 

check ouT CASABLANCA instagram here 

ON TREND

HOMME PLISSÉ

Known for its innovative pleating techniques, Homme Plissé offers modern menswear that combines comfort with avant-garde design. The brand features lightweight fabrics and unique textures, embodying a distinct Japanese aesthetic. By adapting Issey Miyake's iconic pleats for men, Homme Plissé embraces a gender-fluid approach, drawing timeless inspiration from Miyake's designs.

Check out the Homme Plissé Website Here 

CHECK OUT HOMME PLISSÉ INSTAGRAM HERE

JEANERICA JEANS

Jeanerica Jeans focuses on sustainably developed premium denim, offering a versatile selection designed for elevated everyday wear. With an emphasis on ethical production, the brand promotes product longevity and features small local production to ensure quality. Jeanerica is the go-to denim house for achieving the perfect full denim look.

check out the JEANERICA JEANS website here 

check out JEANERICA JEAN instagram here

WALK IN PARIS

Walk in Paris is a cultural label that captures the essence of 90s hip-hop with its cosmopolitan fashion. Known for its "lazy chic" streetwear inspired by the 70s, the brand offers a French vision of the American dream. It extends its cultural influence into music and dance and has collaborated with notable names like Schott and Le Meurice, making it a standout in the modern fashion landscape.

check out the WALK IN PARIS website here 

check out WALK IN PARIS instagram here

SAMSØE SAMSØE

Rooted in Scandinavian simplicity, SAMSØE SAMSØE crafts versatile items that embody sophisticated utility and a contemporary lifestyle. Its collections focus on modern essentials, offering easy-to-assemble looks that seamlessly integrate into any wardrobe. The brand recently showcased its commitment to basics with an exhibition in Le Marais, highlighting its dedication to timeless design and practicality.

checkout the SAMSØE SAMSØE website here 

check out SAMSØE SAMSØE instagram here 

RAISING TALENTS

MAGLIANO

Magliano is an Italian fashion brand celebrated for its deconstructed style and artful subversion, offering unconventional designs that blend poetry with irony. The brand pays homage to Italian subcultures and has earned recognition, including winning the Karl Lagerfeld Prize at the LVMH Prize 2023. With a spontaneous and zany identity driven by the designer's vision, Magliano continues to push boundaries in contemporary menswear.

Check out the Magliano website here

Check out Magliano instagram here

HED MAYNER

Hed Mayner is a fashion brand renowned for its oversized silhouettes and high-quality, conceptual designs. Celebrated for audacious proportions and the reinterpretation of traditional garments, the brand draws influences from spiritual attire, casual sportswear, and military tailoring. With a visionary spirit, Hed Mayner has collaborated with brands like Desigual and Reebok, consistently exploring new dimensions in contemporary fashion.

check out Hed Mayner's instagram here

A KIND OF GUISE

A Kind of Guise is a fashion brand that blends contemporary style with timeless elegance, offering class and functionality. Known for its local luxury crafts and Balkan-inspired embroidery, the brand emphasises unique hand-crafted details. It exclusively uses ethically produced materials, showcasing global savoir-faire by drawing aesthetics from diverse world cultures to create high-quality garments.

check out the A KIND OF GUISE website here

check out A KIND OF GUISE instagram here

SÉFR

Séfr is a Swedish fashion brand that embodies the essence of vintage-inspired Scandinavian minimalism. Known for its elaborate silhouettes, neutral colours, and detailed design, Séfr seamlessly blends retro influences with a modern sensibility. The brand offers luxury clothing at premium prices, crafting statement pieces that reflect heritage with an edge and crafted clarity.

check out the Séfr website here

check out Séfr instagram here

HIDDEN GEMS

DRAPEAU NOIR

Drapeau Noir embodies discreet, timeless masculine elegance with a focus on simple and accessible designs. Crafted in Europe, the brand emphasises fine materials and quality craftsmanship, creating a comfortable wardrobe that reflects the true Parisian boy style. As an ethical project, it prioritises human relations and know-how, ensuring that each piece is not only stylish but also responsibly made.

Check out the Drapeau Noir website here

Check out Drapeau Noir instagram here 

KARDO

Kardo celebrates Indian clothing traditions with a modern twist for today's men. The brand is known for its slow fashion approach, using traditional weaving and dyeing techniques often handmade by local craftsmen. Kardo's collections feature geometric patterns and natural colours that reflect its rich heritage, offering limited-capsule collections that emphasise individuality and craftsmanship.

Check out the KARDO website here 

CHECK OUT KARDO instagram here

CMMN SWDN

At the crossroads of streetwear, retro influences, and classic tailoring techniques, CMMN SWDN elevates everyday fashion with hybrid silhouettes and bold patterns. The brand's aesthetic is characterised by the juxtaposition of contrasting elements, drawing inspiration from African cultures to create an avant-garde approach to menswear that challenges conventional norms.

Check out the CMMN SWDN website here

CHECK OUT CMMN SWDN INSTAGRAM HERE

RIER

Rier draws from the cultural heritage of the Alps to create clothing that combines elegant practicality with artisanal design. The brand is known for its felted wool coats and thick wool knits, reinterpreted for a modern wardrobe. Rier collaborates with family-run businesses to maintain a human-scale network, ensuring authenticity and quality in every piece while highlighting its last collaboration with Salomon.

Check out the RIER website here

check out RIER instagram here

GREG LABORATORY

Greg Laboratory is the innovative solo project of renowned designer Greg Jackson, known for his work with New Balance, District Vision, and Aimé Leon Dore. The brand is celebrated for its "Study of Uniform," offering a fresh take on modern silhouettes by integrating technical outerwear construction into traditional menswear tailoring. With a focus on quality and a gender-neutral approach, Greg Laboratory creates clothes for another reality, blending functionality with cutting-edge design to redefine contemporary fashion.

CHECK OUT THE GREG LABORATORY website here

Check out Greg Laboratory instagram here

Access the printable exclusive and our full White Paper below.

Printable version of exclusive here

IADS White Paper - Middle Managers

Since its inception in 1928, the IADS’ purpose has been to coordinate information between department stores worldwide and research their activities to help them address the many challenges they must face. This translates into many responsibilities carried out by the IADS, all solely intended to provide insights to its members and help them have a broader understanding of the shifting business environment.

Every year since 2020, the IADS has produced a White Paper on a specific topic perceived as important for its members. In 2020, the purpose was to collect the learnings from the pandemic and how to make sure department stores would be prepared for the next crisis. The 2021 White Paper was dedicated to digital transformation and its impact on the organisation. In 2022, it was all about the development of sustainability, CSR and ESG in retail businesses. The 2023 edition was dedicated to retail media.

In 2024, the White Paper was dedicated to middle management. The IADS believes that middle managers’ distinct blend of operational knowledge, leadership, and adaptability enables them to deal with retail challenges, but also address transformation and foster innovation. In an era of automation and AI, middle managers have strategic importance as they are pivotal in integrating new technologies, redesigning roles, and ensuring that human judgment and creativity complement technological advancements.

Introduction: middle managers, the overlooked pillars of retail

Middle managers in retail are often seen as cogs in a machine, tasked with implementing corporate directives while ensuring day-to-day operations run smoothly. As “managers of managers”, they have served as connectors between the C-suite and frontline teams, ensuring operational efficiency. Yet this perception fails to capture the depth of their responsibilities. They are not merely intermediaries but strategists, problem-solvers, and motivators who directly influence employee engagement, customer satisfaction, and financial performance.

However, decades of centralisation, cost-cutting, and technological advances have diminished their roles. Once seen as essential to a company’s heartbeat, middle managers were sidelined and perceived as bureaucratic overhead. In reality, middle managers are expected to juggle competing priorities from facilitating operations to managing teams and monitoring performance, productivity and financial effectiveness. They have dual accountability to both corporate leadership and frontline teams, making their role uniquely challenging and impactful.

As retail evolves into an omnichannel ecosystem where agility and innovation are paramount, the role of middle management continues to be questioned. The IADS believes their role will be increasingly critical in driving innovation, including AI, and organisations should equip them with the tools and authority they need to succeed. Finally, in the wake of the AI revolution, middle managers are best positioned to re-bundle roles, theirs and their teams.

The multifaceted role of middle managers in retail

Middle management scope is a mix of strategic and tactical responsibilities. As explained in the IADS white paper, middle managers wear many hats, making their role one of the most dynamic and demanding in the retail industry. Also, their duties are sometimes unclear: while they have clear objectives, it is up to them to decide the best way to achieve them. Their responsibilities can be broadly categorised into four key areas:

• Facilitating operations: at its core, middle management is about turning strategy into action. They facilitate any needed changes in an organisation and create an effective working environment for day-to-day operations.
• Monitoring performance, productivity and financial effectiveness: they monitor their department's performance and are responsible for reporting to the management above them. They build action plans to improve results or fix issues.
• Communicating: perhaps the most overlooked aspect of middle management is its role as a communication bridge. Middle managers translate high-level corporate strategies into actionable plans for frontline staff while simultaneously relaying feedback from the ground up. This two-way communication ensures alignment between strategic goals and operational realities.
• Managing teams: one of the most essential functions of a middle manager is recruiting, motivating, leading and inspiring their team. These tasks require emotional intelligence as much as technical skills. A McKinsey survey cited in the white paper found that 75% of respondents identified their boss as the most stressful aspect of their job. After all, employees leave managers, not companies. Conversely, supportive middle managers foster trust, psychological safety, and motivation among their teams. As a result, middle managers significantly influence employee satisfaction, directly impacting performance and productivity.

Another key aspect of the middle manager's role is that they rely on the contributions of their line managers and collaborate with other departments to achieve results, which means they depend on the results of others and not only on their direct contribution. Even if they tend to have a team of support personnel and a network of HQ contacts to help them do the job, they must be extremely good at relationships, communication and interaction with others. Middle managers must identify, understand, and harness their networks to drive performance and achieve goals. They become influencers.

Middle management empowerment and appreciation work hand in hand

Middle management is 80% leadership, and 20% is management. As leadership is crucial, organisations must empower middle management to unlock their full potential. To that end, companies should invest in leadership development by providing targeted training programmes to build skills such as conflict resolution, data-driven decision-making and change management. Organisations can also empower middle managers’ decision-making by granting them greater autonomy that can foster a higher sense of ownership.

Empowering middle managers means providing them with resources and granting them the authority and means to implement significant changes. The IADS believes empowering middle managers in retail can deliver tangible benefits for organisations, from better management capabilities to enhanced decision-making skills and higher staff engagement. Also, empowerment can lead to a culture of continuous improvement, as autonomy helps middle managers make decisions, implement changes and develop a unique sense of identity and belonging.

Retaining good middle managers is more difficult than for senior managers. As a result, the achievements of middle managers should be recognised to boost morale and retention. In that perspective, promotion is not always an adequate solution, and it does not mean taking a step higher on the company ladder. There are other options to recognise middle managers' performance:

• Compensation remains a way to acknowledge performance and promote middle managers. C-suite executives traditionally have a higher salary than middle managers. Sometimes, giving a middle manager the same compensation as a C-suite member can show how much the company cares.
• Giving stock and stock options is an interesting option for listed companies.
• A bigger sphere: rather than promoting middle managers to a higher position or the C-suite, they can expand their scope without changing the essentials of their jobs.
• Title changes can acknowledge a new level of seniority mirrored with increased responsibility and rewards.
• Challenging assignments to test new ideas about how to make things better.
• Autonomy and flexible work arrangements.
• Involve middle managers in the company strategy, and important decisions can help them feel valued, trusted and empowered, which can, in turn, improve the quality of the decisions made.
• Include them in a project outside their daily routine: a top head buyer could be involved and valuable in a warehousing project, for example.

Finally, mentoring middle managers is often an untapped practice for empowerment. As businesses navigate complexities, the IADS white paper explains how mentoring fosters a culture of continuous improvement by allowing discussion of challenges, sharing successes, and seeking guidance. It is also a way for middle managers to refine their communication skills, ensuring clear directives, constructive feedback, and optimised team collaboration. Also, mentoring provides insights into the company’s vision, mission, and strategies, empowering and guiding middle managers to make decisions that contribute to overall success.

There are many forms of mentoring, from traditional one-on-one to reverse or group mentoring. However, peer mentoring is a powerful and effective support system that truly harnesses the power of relationships. By building valuable relationships among peers, managers can share real-time challenges with colleagues in a safe space, allowing for mutual advice and feedback. Peer mentoring provides honest coaching on improving systems, processes, and people management.

Re-bundling roles: middle managers' impact on innovation and transformation

The rebundling of middle management roles through AI integration represents a paradigm shift for retail. This transformation is not about replacing their roles but amplifying their potential. The IADS believes middle managers’ roles can be redefined to ensure they can focus on their core responsibilities by reducing the amount of administrative work and low-added-value tasks and transitioning from task executioners to strategic leaders who drive innovation. By automating routine tasks and providing actionable insights, AI not only improves operational efficiency but also elevates the role of middle management into a pivotal force for business success.

With the AI revolution, middle managers should be seen as innovators. As automation and AI redefine the workplace, middle managers bridge technology and human employees by facilitating technology adoption. While AI can handle administrative tasks, the human judgment, empathy, and creativity that middle managers bring remain irreplaceable. This re-bundling of tasks will allow middle managers to focus on what they do best: connecting people, solving problems, and driving innovation. The very nature of their dual tactic and strategic role will allow them to understand the areas where AI will make a difference and how to reshape their team's role. Their experience in change management will make them perfect guides for teams to accept and use AI tools.

Generative AI can improve middle managers' managing capabilities. Emerging tools show a promising future, be it personalised training and capability-building programmes, recommendations based on individual needs and preferences or creating immersive role-playing scenarios. Generative AI could also boost a manager’s capabilities as a career counsellor, as AI-powered talent platforms could provide a broader range of potential career paths and the specific job experience and training needed to achieve them. Also, AI can optimise team performance by identifying team strengths and areas for development. Generative AI will also help middle managers better monitor performance as AI tools can automate the creation of reports and dashboards, freeing middle and frontline managers alike from data compilation and giving them the necessary time for analysis, more meaningful reports and relevant action plans allowed by refined data.

Conclusion: a call to action for retail leaders

Middle managers occupy a critical yet often underappreciated role. They are the glue that binds corporate strategy to frontline execution, ensuring that ambitious visions translate into tangible results. Middle managers are no longer just implementors or "managers of managers." They are connectors, innovators and change agents, essential for navigating the complexities of today’s retail. Their in-house relationship networks and ability to adapt to changing circumstances and drive operational efficiency will be critical to ensuring the organisation’s sustainability and growth.

While it is financially unrealistic to expect CEOs to grow the middle managers’ layer, they can recognise their importance. This can be done through various benefits and perks and even by offering the best middle managers a seat at the strategy table. It is also a matter of simple recognition: exchanging with them, walking around, asking questions, and having lunch with them are all measures to show gratitude and how they care.

Also, by investing in this pivotal layer of leadership, department stores can unlock new performance levels, agility, and innovation. Good middle managers are retail’s “unicorns”, rare, valuable, and vital to the industry’s future. It’s time to recognise their potential and empower them to lead the way.

The IADS believes retailers can transform middle management from a bottleneck into a competitive advantage by investing in leadership development, fostering open communication, granting autonomy, and leveraging technology to help redefine roles. In doing so, they enhance organisational agility and create a more engaged workforce. Middle managers may not always be in the spotlight, but they are undoubtedly the unsung heroes shaping innovation and excellence. For retail executives, the challenge is clear: rethink how middle management is perceived, supported and empowered.

Credits: IADS (Christine Montard)

Printable version here

Check out the pictures here

Last November, the IADS had the opportunity to visit the recently revamped Oxford Street John Lewis store with its higher management. This was the perfect opportunity to review John Lewis's recent history and see how this overhaul fits into a larger narrative of change for a company that has been going through difficult moments in its recent history.

John Lewis & Partners: the English Grand Old Lady

John Lewis was founded in 1864 as a drapery shop on Oxford Street by the eponymous businessman. He then acquired the Peter Jones store (opened in 1877 in Sloane Square) after Jones passed away in 1905. That was the beginning of the expansion: the Jessops & Son store in Nottingham was the first store outside London to be purchased in 1933. It was rebranded as a John Lewis store only in 2002 . Then, the company acquired the Selfridges Provincial Stores company in 1940  and a store in Reading, Heelas, in 1953 (here again, the name survived untouched until 2001).

Going beyond acquisitions, the department store company started in the seventies to build new stores to relocate city-centre units in the then-newfound malls: the Jessops store in Nottingham was relocated from its historic city-centre location to the Victoria Centre mall in 1972, the Bainbridge’s store in Newcastle (founded in 1838 and sold to John Lewis in 1952) was relocated to the Eldon Square shopping centre in 1976, for instance. Soon, the company started to build from scratch new units without a pre-existing base, such as London’s Brent Cross in 1976 (in a new mall), Milton Keynes store in 1979 (in the middle of a newly-erected city), the Cheadle store in Manchester (1995), Canary Wharf in 2011, or the White City store in the Westfield mall in 2018. Today, the company operates 34 stores exclusively under the John Lewis name across England, Wales and Scotland. The largest is the historical Oxford Street store (39k sqm), followed by the Glasgow store, which opened in 1999.

The department store group acquired a supermarket chain, Waite, Rose & Taylor (later shortened to Waitrose), in 1937. Today, Waitrose operates 329 stores in the UK, including 65 “little Waitrose” stores (a convenience store format) and several locations in the Middle East.

As a group (including Waitrose), John Lewis is special because it was designed as a “partnership” back in 1929: every team member is a de facto company shareholder. While the partnership constitution was published in 1928, promoted by John Spedan Lewis, son of the founder, it was not coming out of the blue: he had set up a staff council and a charitable donation committee as early as 1919, and in 1920, then de facto partners received their first bonus in the form of share promises. Caring for employees has been in the DNA of the company since its inception: John Lewis Partnership implemented a medical service in 1929, 19 years before the National Health Service was created in the UK, and in 1950 the partnership was secured through the Second Trust Settlement (ultimate control of the company was secured to Trustees). Finally, starting in 1970, partners began to receive their bonuses in cash rather than cash and shares.

Finally, the last iconic element about John Lewis & Partners is the pledge, made in 1925, known to every English citizen: “never knowingly undersold.” In effect, this meant that any customer seeing a price difference with the competition (national chains) during a period of 28 days after purchase could claim a refund of the difference. This was a very powerful marketing tool for 97 years until the pledge was retired in August 2022.

Recent ups and downs

John Lewis recent difficulties did not start with the COVID-19 pandemic as, in 2018, profits slumped to almost zero due to the cost of the Never Knowingly Undersold pledge. While Brexit did not foster a positive mood in terms of inflation, this situation came from the increasingly competitive landscape, including online, with pure players who had different cost structures. No wonder, therefore, that the pledge was changed in 2022 to “for all life’s moments”, to the country's dismay, a measure seen as vital to balance the business in the wake of a continuous online business progression (even though this was a costly £500m decision).

Leadership, as a consequence, was challenged: the fifth Partnership Chairman, Sir Charlie Mayfield (a company veteran, who joined John Lewis in 2000), stepped down in 2020 after thirteen years, to be replaced by Dame Sharon White, while then Executive Director, Paula Nickolds (who had joined John Lewis in 1994 and succeeded to Andy Street in 2017), was replaced the same year by Pippa Wicks, coming from Coop.

new, sometimes non-retail related projects:

Facing a growing discontent, Pippa Wicks left in 2023 and Dame White became increasingly challenged. The same year, the CEO position was created to address the needed changes, with Nish Kankiwala appointed with the mission to cut costs, which generated much speculation about the Partnership’s specific structure’s future. After immediate measures (such as headquarter size reduction, jobs cuts, and the scrapping of non-retail plans), 2024 saw the appointment of a new Managing Director, Peter Ruis, the company’s former buying and brand chief, a new chairman, Tesco veteran Jason Terry as a replacement of Dame White (whose tenure was the shortest in the partnership history), and the “Never Knowingly Undersold” pledge return in September, with great success: 25 online retailers (including Amazon) are now systematically monitored in all categories, and customers are given a 7 days price guarantee, through cash refunds (not vouchers). The pledge return had immediate results within the two weeks following its re-implementation, in terms of sales, margin and NPS.

These changes coincided with a change in John Lewis’ fortune since the company posted a £42m pre-tax profit in 2023-2024, up from a £78m loss the previous year, which gave the company enough confidence to confirm their target of reaching £400m profit by 2027-2028. Under Ruis’ leadership, John Lewis focused on its retail assets to become relevant again, and this translated into team reorganisations and new investments, with the Peter Jones store slated for a massive overhaul, coming on top of a £800m budget dedicated to stores improvements, including £6.5m to immediately inject novelty in the Oxford Street store. In parallel, John Lewis improved its private labels, customer services (it recently announced a deal with Pay Now Buy Later operator Klarna) and additional sources of revenue (through, for instance, a retail media platform operated with Dunnhumby unveiled last October).

In its latest financial exercise (2023-2024, closed in January 2024), the John Lewis department store unit posted a total of 4,765£m in trading sales (-4%), a revenue of 3,644£m (down -4% vs. 2023, and from 3,961£m at its peak in 2018), and a trading operating profit of 689m£ (+2%), i.e. 14% on trading sales, and a net operating profit of £147m, up from a loss of £160m the previous year, and three years of continuous losses. These results were achieved through a total of 13.4m customers in the year, of which 53% used digital channels for their shoppers. The rest visited the remaining 34 department store units in the UK (completed by smaller format stores and community-centric units).

The loyalty program has 6m members, who spend triple the average clientele and are growing +15% year on year. A new app, co-developed with Dunhumbby (the Tesco Club card creator and John Lewis’ partner for retail media), has been launched with new, individualised services, such as individualized coupons and promotions or exclusive events.

What is new in Oxford Street?

The John Lewis Crown Jewel store is the company’s oldest and largest, covering 39,000 sqm on seven floors. It includes food in the basement, tech on the top floor and a roof garden with F&B options (the store boasts cafes, bars and restaurant options on each floor). Regarding traffic, the store welcomes 22,000 customers a week, primarily domestic (all the more since the tax-free shopping scrapping ), and coming with public transportation (the nearby car park does not seem to impact traffic), with an average conversion rate of 35% in regular weeks and 65% during peak times, mainly coming through the two main entrances on Oxford Street (one leading directly to beauty, the other one to fragrances).

To give a sense of comparison, the Peter Jones store is the third largest but posts half of the Oxford Street store’s turnover. Also, compared to the rest of the John Lewis stores, the Oxford Street one is rather specific regarding customer nature, younger and more affluent than the average John Lewis client. Therefore, it is no surprise that the new management focused on producing extremely quick results in this location to materialise the change (through new brands, new instore design, emphasis on quality, services and experience) and invested £6.5m in revamping specific zones in the store, such as the beauty hall, a long-time traffic magnet and now the largest in the country.

Given the store's size and the many categories presented, the below list of points of interest is a subjective selection based on what has been renovated and upgraded.

Ground floor: the beauty hall

The ground floor includes a rather disconcerting number of categories: beauty, hairdryers, women’s accessories and handbags, menswear and men’s shoes, and sunglasses.

The beauty zone (20% of the total business) was one of the main areas of focus for the store revamp: For the first time, John Lewis separated beauty from fragrances, introduced 75 new brands, teamed up with majors to renovate 90% of the 41 beauty counters in the past nine months, and launched a self-discovery area where customers can spot new beauty brands without salespersons’ assistance.

Make-up is located close to hair care; it is a new category per se, including brands such as Dyson. Finally, fragrances are presented in a new self-standing concept that will be reproduced in other John Lewis stores.

First floor: jewellery, watches and women’s shoes 

The first-floor houses lingerie, nightwear, women’s shoes, womenswear and jewellery.

Initially located on the ground floor, the jewellery category was set up in an entirely new concept on the first floor. It uses a profusion of light and open space to give an impression of choice while focusing on the products. It also addresses profitability concerns (and leaves more space for more profitable categories on the ground floor). Open displays with small brand reminders allow for stacking more brands and easing their change when needed. It is interesting to note the attention to lighting: products are emphasised thanks to the ceiling spots and smaller, focused lights integrated into the tables themselves.

The piercing stand, a must for many Brittons, is strategically located nearby. This stand allows customers to select their piece of jewellery and wear it on the go (it is operated through a concession model). Interestingly, the personal shopper area is also very near, which allows customers to potentially complete their looks with shiny accessories while transitioning to the nearby womenswear area.

The “Shoe Room” is entirely new, with an open concept, a radical difference from the previous structure with “brand boxes”.

Womenswear (40% of the total business) has also evolved, introducing 100 new brands each half of the year, an unprecedented rhythm for the company, to become the “house of best brands”. Regarding the business model, the store dropped SOR and went into full concessions, allowing for more high-profile collaborations. This approach has been implemented in the 4 top John Lewis stores since September 2024. The department also emphasizes the John Lewis private label, which in the WRTW category represents 50% of John Lewis' total private label sales (which, in turn, represent 20 to 25% of the total store sales).

Second floor: Waterstones bookstore, Benugo Café

This floor houses bed, bath and linen products, home accessories, gifts, lighting, mirrors, the first Waterstone’s shop-in-shop, and the Benugo Café.

It took 6 months from initial conversations to opening a 200 sqm Waterstone bookstore on this floor, selling 20,000 titles. Due to the speed of execution, some crucial details remain to be fixed. For instance, the Waterstone cash desks cannot process John Lewis’ sales and vice versa. Teams are actively working on this crucial point, which prevents from mixing loyalty programmes in the store.

Both Waterstones and Benugo are concessions (Benugo operates various shops in the store). Their rather surprising location (in front of beds and pillows, a rather quiet section) is simply due to the fact that they took a former back-of-store space that was available and ready for a productive upgrade. Waterstones has proven to be a real traffic magnet since then.

Third floor: furniture studio and the upcoming Jamie Oliver school

This floor is home to beds, bedrooms, furniture, a kitchen, sofas and seasonal stores (Christmas, with a stunning 85% sell-through rate).

While the set-up is inspirational and allows customers to project themselves, IKEA-style, John Lewis leaves much liberty to brands to fit their shops in shops, contrary to the lower floors. Here, the most striking is the profusion of customer promises, from free delivery to free return, the possibility of choosing every detail and customizing sofas, for instance, and the return of the 100-year-old pledge in a very visible manner.

John Lewis executives were excited to announce the planned opening of a Jamie Oliver café and cookery school next spring. This is obviously a very efficient way to signal all the ongoing changes at John Lewis and generate buzz.

Fourth floor: the Lego stand

This floor is home to baby & children wear, haberdashery and crafts, and everything kids. The most striking is probably the very large Lego shop in shop with a complete offer and decor, located at the exit of the escalator. Toys remain a very efficient category for John Lewis (a stark difference with other department stores in the world, and which shows also how John Lewis has managed to remain connected to its customers’ everyday lives). It struck a deal with Lego, trading a prime location in terms of visibility and traffic, for a complete revamp of the space at the brand’s expenses.

Fifth floor: computers

This floor houses TV, audio and everything tech (5% of the total business), sports, and travel goods.

John Lewis has put much effort into their tech space, reproducing a 1960’s IBM machine as a central display unit. The rationale was to upgrade the overall feeling to remain competitive with the nearby Apple concession (the second brand in sales for the whole store). Each brand is given demo space, screens, stools to allow customers to stay and test in actual conditions laptops… but the most intriguing is, here also, the repeat of customer promises as well as the educational effort: operating systems, screens and CPU capabilities are explained in simple terms to allow customers to make their choices confidently.

How does John Lewis cope with the promise of a superior standard of service?

To stand with its promises, John Lewis is counting on its app to measure in real-time its customers’ satisfaction, but not only. They also measure customers’ trust through a panel of 1,000 members that answer questions every month, coming on top of stores’ individualised NPS.

This goes hand in hand with new initiatives: for instance, in-store mobile payment was launched and generalised to the whole store in August 2024. To further differentiate from online competition, John Lewis also emphasizes its guarantees (visible all across the store). When it comes to online sales, stores are incentivised when sales are made from their POS (even though products are then shipped from the central warehouse).

Conclusion: what to think of the much-hyped Oxford Street store revamp?

*According to people familiar with its previous version, the store's changes bring a radically different experience during a visit. According to them, a visit to the basement, which has not been revamped in a similar fashion, gives a proper idea of what the store was like a year ago (or, from that perspective, the luggage section on the fifth floor).

From that perspective, this is, therefore, a success, even though it has to be euphemised by the fact that the relatively low investment (6.5m£ does not represent much to spend in a 39,000 sqm store) also meant that some aspects were left aside: what to think, for instance, of the fact that the escalators paintings were not retouched?

The new spaces (beauty, jewellery, womenswear) and partnerships (Waterstone, Benugo, Jamie Oliver) can instead be seen as “proofs of concepts” that change can happen even at John Lewis, and its materialisation to the general public and the associates (one must remember that they have gone through serious challenges in the past years). From that point of view, this is a total success, as a new type of energy was clearly palpable during the visit, with sales associates enthusiastic and proud to explain how they were doing things differently.

Another striking point was the transparency and reassurance given to everyone: customers on the sales floor (with guarantees in terms of price-matching, delivery delay, 25 years guarantee on sofas, free delivery upon a sales threshold, and return options) but also to staff, through clear, transparent explanations on how bonuses are calculated, for instance. It is difficult to know if this is a new initiative or a well-established tradition. Still, one must recognize that even visiting John Lewis’ offices gives an entirely different impression from its competitors not so far away. The new company management seems confident that their actions will bring concrete and quick results, and they might be right in thinking so.*

Credits: IADS (Selvane Mohandas du Ménil)

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Last month, the IADS attended the presentation of the State of Retail 2024 - Europe: Transition and transformation in non-grocery retail, a report carried out by Eurocommerce in collaboration with McKinsey. Usually dedicated to grocery retail, this report addresses key trends shaping the specialty retail landscape in 2025 for the first time. It combines market data with surveys of 30 European executives and approximately 15,000 consumers across six European countries (France, Germany, Italy, Poland, Spain and the United Kingdom). The scope focuses on six retail categories: furniture and furnishings, DIY and hardware, consumer electronics, sporting goods, beauty and personal care, and pet care.

Introduction: trends and the European consumer

Eurocommerce presented the key numbers and trends in the European retail industry. While the industry’s nominal turnover increased by 2.3% annually, inflation-adjusted growth slowed by 1.8%, below 2019 levels. Real growth is projected to be 0.6% per year through 2028, however the dynamics vary by category and country.

Across Europe, the proportion of retail sales between grocery and non-grocery categories varies. For example, in Germany and the United Kingdom (UK), non-grocery items account for more than half of retail sales while French consumers allocate almost 60% of their budget to groceries. Furthermore, European households remain cautious about future spending post-Covid. Retail sales of discretionary items hinge on purchasing power, which varies across Europe. The challenge for retailers here is that the expected slowing of real income growth could undercut purchasing power gains. More than half of low-income households have saved as much as possible in the past 12 months instead of spending. The combination of cautious spending and eroding purchasing power suggests that consumer spending is polarising; adapting to the needs of both high- and low-income groups will be critical for retailers as the favour for discounter options and private labels continues.

The average European consumer has changed significantly:

• Purchasing behaviour: omnichannel journeys are becoming increasingly prevalent, with more than 50% of consumers using online and in-store options to research and purchase non-grocery items.
• Price sensitivity: transitioning from a focus on low-cost options, one in three consumers prioritise value for money. This characteristic includes promotions, discounts, a wide product range, trustworthiness, and a fun shopping experience.
• Loyalty: with low levels of loyalty, more than 60% of consumers actively seek opportunities to trade down. Convenience is the top factor in purchasing decisions, both online and offline.
• Approach to sustainability: consumers also have a paradoxical approach to sustainability where one-third cited it as their second-biggest concern, yet it hardly affects purchasing decisions.

The growing presence of omnichannel journeys

Following rapid e-commerce penetration during the Covid era, brick-and-mortar retail recaptured some of these gains post-pandemic. More recently, e-commerce has started increasing again but remains below 2019 levels. Given the growing presence of omnichannel journeys in consumers’ shopping habits, more than 50% reported using online and in-store options to research and purchase non-grocery items. The rise of omnichannel is evident in the context of other consumer trends, such as a preference for convenience, value for money and a general decline in retail sales.  /nbsp]

Consumers decision journeys are now predominantly omnichannel. The first step is often beginning to research products online through brand, retailer, competitor, or third-party websites (social media and marketplaces). Next, they visit stores to get advice and experience the products. Finally, they return online to purchase the item at the best prices.

It is notable that brick-and-mortar retail plays an important role in the omnichannel journey. Over one-third of consumers choose physical retail for convenience and almost a third prefer it for the opportunity to experience products. Functioning as fulfilment centres, showrooms, and community hubs, physical stores provide unique experiences that cannot be replicated online.

Non-grocery retail channels (multi-brand and brand-owned) still capture the largest share of consumers’ declared spending. Consumers are motivated to purchase from non-grocery channels given the broad range of products and services retailers offer, the availability of specific items at the time of purchase, their trust in the retailers, and their love for the in-store experience. This trend is expected to persist, with net future purchasing intent in non-grocery retail channels at its highest over the coming years.

Despite this maintenance of spending intentions in these retail channels, department stores are increasingly challenged by online resellers, which are gaining ground across all surveyed countries. Specialised multi-brand and brand’s own stores capture the largest market share in all markets.

In the face of growing consumer polarisation, omnichannel retail caters to all groups and gives them the added value of convenience, the most important factor affecting purchase decisions. Investing in and providing a seamless omnichannel experience keeps consumer journeys within retailer-owned channels. This necessitates cross-channel harmonisation to meet the needs of different kinds of consumers.

Building new ecosystems to restore loyalty

Increasing diversity and fragmentation in the retail sector give consumers more choices. This results in lower customer loyalty, an increase in the variety of retailers visited and a decrease in the size of shopping baskets per visit. Furthermore, consumers’ focus on value for money includes promotions, a rewarding experience, a variety of products and trustworthiness. To take advantage of this, retailers must capture the consumers’ interest, both high and low spending groups, by going beyond products and traditional retail to services that enhance customer experience.

Retailers are creating ecosystems that include services to combat decreasing customer loyalty. These include retail media networks (RMNs), repair, maintenance, travel and insurance services. While travel and insurance services have become staples at El Corte Inglés, El Palacio de Hierro or Falabella, Macy’s media network has recently been expanded to include personalised post-purchase offers1. Creating a comprehensive ecosystem for customers’ needs can reward retailers with higher customer loyalty and a larger share of their spending, as shown by the predominance of El Corte Inglés in Spain. Introducing and strengthening private label capabilities can also enhance customer loyalty while affording the retailer better margins.

Existing assets can be leveraged to develop an ecosystem strategy, as suggested during the 2023 General Assembly by Michael Jacobides, strategy professor at the LBS (IADS Exclusive here). Tapping into all available tangible and intangible assets can drive growth and reduce investment needs. Brands, loyalty programmes, stores, applications, products, services, and expertise, can all potentially be used in the new ecosystem.

By putting customers’ needs at the centre of the retailer’s value proposition, they can build a portfolio of traditional retail and services that better serve customers while increasing revenue. Digitisation and advancing technologies have made it easier for retailers to explore segments beyond core retail to create a network of services.

Demanded sustainability won’t come out of the consumer’s pocket

Climate change and sustainability are still on the minds of European consumers. Thirty percent of survey respondents cited sustainability as their second-greatest concern. Consumers expect sustainability: across all segments, more than one-third of consumers reported paying close attention to environmental friendliness when shopping for non-grocery goods.

However, this awareness of sustainability has yet to influence buying decisions. When asked whether retailers offering a broad range of sustainable products is important in purchasing decisions, consumers ranked this driver at just 32 out of 40.

There is a gap between consumers’ declared priorities on sustainability without manifesting in purchasing decisions. They expect retailers to meet sustainability priorities without it coming out of the consumer’s pocket. In this vein, circularity as an alternative has worked well and is seeing gains as it meets cost considerations while enhancing sustainable objectives.

This explains the current momentum around circular models. Retailers with sustainable or circular offerings in certain categories experience strong growth. This is especially true in consumer electronics and appliances, where refurbished items allow consumers to get a better value for their money, and in sporting goods, where equipment rental and second-hand purchases are on the rise.

Overall, retailers are faced with a complex decision on sustainability. Focusing on these priorities could improve incremental long-term revenue growth by integrating new sustainability and circularity practices into their operations at the cost of short- to medium-term growth. More and more retail groups now focus on circularity (such as FNAC-Darty’s refurbished electronics and appliances offering) and sustainability (for example, cosmetics brand Davines) as key value propositions.

Note on CEO sentiment: cautious optimism

Most of the 30 European non-grocery executives surveyed by Eurocommerce expected market conditions in 2025 to improve or remain the same. Cautiously optimistic, the sector is adapting to ongoing economic challenges. Margin pressures and consumer downtrading, driven by rising costs and heightened price sensitivity, remain top concerns for CEOs in the coming year. Executives are prioritising investments in omnichannel experiences to meet evolving consumer demands, along with expanding private label offerings.

More than 70% of CEOs believe that by 2030, delivering a seamless omnichannel shopping experience will be the cornerstone of success. Approximately one in three executives also cite factors such as developing robust private label strategies and reinventing store formats to excite customers. On the other hand, only 20% of leaders believe improving the sustainability of products will be important to win in their segment by 2030.

Conclusion: omnichannel is key, sustainability is (unfortunately) not

The retail landscape is undergoing a significant transformation driven by polarising consumer spending. Retailers must cater to both high- and low-income groups to maximise their reach by adapting to omnichannel strategies that cater to all groups, offering a seamless shopping experience and giving them the added value of convenience which is the most important factor affecting purchases. Reduced customer loyalty driven by this fragmentation of consumers and the availability of large numbers of retailers, calls for the development of an ecosystem of value-added services and private labels to recapture consumers. The focus on value for money for consumers includes promotions, a rewarding experience, a variety of products and trustworthiness. As the sector navigates economic challenges, executives focus on enhancing omnichannel experiences and expanding private label offerings as key strategies for success.

There is a gap between consumers’ declared priorities on sustainability without it reflecting in purchasing decisions. They expect retailers to meet sustainability priorities without the cost being passed on to consumers. In this vein, circularity has worked well and is seeing gains as it meets consumers’ cost considerations while meeting sustainable objectives. This approach addresses consumer expectations and positions retailers for incremental long-term growth. While sustainability is not yet a top priority for many leaders, integrating these practices could become increasingly important as consumer awareness continues to grow.

Credits: IADS (Anchita Ranka)

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*Known for its rapid economic growth during the past two decades, China is now navigating a period of moderated expansion. The current economic and societal landscape is marked by a complex interplay of challenges and opportunities: a significant real estate crisis, high youth unemployment rates, a shrinking and ageing population and newfound Asian pride. These factors are reshaping consumer behaviour and economic priorities within the country.

Despite these challenges, as stated by IADS’ partner NellyRodi in their What’s Up China conference held in Paris in October, there are sectors poised for growth, including sportswear, consumer health, and experiential travel. Understanding these dynamics and local macro-trends is crucial for businesses aiming to navigate the evolving Chinese market landscape effectively.*

China’s 2024 economic and societal context

It’s the economy, stupid!

China’s economic growth, once characterised by double-digit increases, has slowed considerably. While 2023 saw a modest recovery with a +5.2% GDP and a +7.2% consumption growth, there has been a -7.5% decrease in exports. The transition from rapid expansion to more moderate growth presents significant challenges illustrated by the 2024 economic landscape marked by a profound real estate crisis, slower consumption and an average 20% unemployment rate among the younger generations. Slowing down compared to 2023, China’s GDP only grew by +5% during the first half of 2024, while retail sales only increased by +3.7% during this period. The outlook for 2025 is both cautious and optimistic as GDP growth should resume. On its side, the IMF growth forecast sits at +4.5%.

Demographics: China is getting old 

The demographic shift is another key concern. China has now become the second-highest population in the world (it was previously the first), and the UN estimates that the country will lose 100 million by 2050. As a result, the replacement of the Chinese population is not guaranteed anymore. Overall, the total population could decrease from 911mn in 2025 to 700mn in 2050. Even more than its shrinking, the main issue is China’s population ageing rapidly, with a declining and historically low birth rate and an increasing proportion of the population over 65 years old. In 2023, more than 20% of the Chinese population was over 60 years old, and this group should reach 25% in 2050. Government initiatives to address this issue have had limited success so far. They have been distributing child benefits, extensively communicating on the birth rate and, since 2021, allowing all couples to have three children. Also, to maintain the workforce, the government raised the retirement age for the first time since the 1950s, from 50 to 55 for women in blue-collar jobs and from 55 to 58 for females in white-collar jobs. Men will see an increase from 60 to 63. The Chinese demographic future is brighter, though: bigger than Gen Z, the generation aged 5 to 15 now, will relieve demographic pressure in the coming years.

Western lifestyle 

The family structure is changing, with young people delaying marriage and parenthood, further complicating the demographic picture. The traditional family life model is challenged as the number of marriages decreased for 9 years, slowly rising again since 2023. Besides, the young population challenges the work status quo and no longer accepts the “9-9-6 model” (working from 9 am to 9 pm, 6 days a week). In 2021, the Supreme Court even ruled that this system was illegal. In reality, most of the Chinese population still works according to the model. Still, resistance is truly growing as people want a better work-life balance, with 76% of the population born after 2000 aspiring to a high level of flexibility. Freed time is dedicated to activities centred around well-being, sport and travel. Finally, 3-tier and 4-tier cities gain popularity among young adults as they offer a better lifestyle with less population and nature nearby.

Chinese consumer behaviour: myths and reality

The middle class is shrinking

Key to local consumption and once optimistic about the future, the Chinese middle class represented 400mn people in 2023. With 70% of family assets tied up in property, the current real estate crisis hits hard as 28,9% of the middle class lost 10% to 30% of their fortune, and 11.4% lost more than 30% of it. Now, many are even slipping back toward poverty. This is a significant issue for the Chinese Communist Party, which the middle class has always supported in exchange for prosperity.

Besides, Chinese starting salaries have declined by -1.3% during the 2023 fourth quarter, the most recent period for which data are available. Bonuses fell by -17.5% on average compared to the previous year (-27% in the internet and telecommunications sector and -35% in the financial sector), directly impacting consumption and luxury spending in 2024. It’s no secret that luxury brands face a major crisis, as illustrated by the latest LVMH results for 2024 third quarter: sales in Asia (excluding Japan) fell by 16%, while Japan — a key destination for Chinese customers leveraging a weak yen exchange rate — steeply decreased, growing 20% compared to 57% in the previous quarter.

Today, the middle class, whose aspirational customers once fueled the luxury growth, is more refined overall and has different needs and cravings, especially as they favour products and services that truly enhance their quality of life. As a result, other sectors benefit from the slowdown in luxury. The Chinese middle class invests in education, with an increase of +12.7% between 2022 and 2023. Quality food expenses grew by +8.5%, health by +9.2%, and travel by 7%.

The luxury shame impact on the HNWI and the UHNWI  consumption

The Chinese government has targeted influencers who flaunt their wealth on social media, resulting in bans for high-profile personalities. This has contributed to the ‘luxury shame’ phenomenon, where HNWIs and UHNWIs refrain from displaying their wealth. However, the HNWIs did not stop spending; instead, they shifted brands. They are becoming more discerning and opting for brands offering classics that retain value over time rather than trendy products. This is why brands like Hermès and The Row don’t experience slowdowns.

Also, McKinsey & Company describes a more nuanced picture of the luxury sector. While luxury brands are seeing their sales decline in mainland China, Chinese overseas spending on luxury goods in the first half of 2024 has already exceeded the 2019 level. Chinese consumers might simply choose to make these purchases outside of China. In parallel, UHNWIs tend to relocate outside of China. Their number in China shows a slowdown, from 495 billionaires in 2023 to 406 in 2024. Singapore and Tokyo’s real estate is booming thanks to those tentative relocations.

Asian tourism rather than Western tourism

In 2023, with $196.5bn spent, Chinese tourists became (again) the highest tourist spenders, but they completely shifted their tourism habits. Exit Europe and welcome Asia! They favour local tourism, as it’s easier, cheaper, and supported by the government's push for local consumption. Having a newfound Asian pride, tourists' top destinations in 2024 were Korea, Japan, USA, Thailand and Hong Kong. Italy ranked 10 and France… 23. Compared to 2019, Lunar New Year tourism in China increased by +73.1% in 2024. 765 million domestic trips were made across the country during the Golden Week holiday in October 2024, a year-on-year increase of 5.9%. Expenditure by domestic tourists reached $99.30bn, a year-on-year increase of 6.3%. However, per capita spending was 2.09% lower than before COVID-19.

China’s opportunities for growth

It’s not all bad

Despite historically low consumer confidence, concerns over high living costs, job security and the property slump, consumption growth still exists. Sportswear, urban outdoor apparel, and consumer health have seen double-digit growth. The beauty and wellness sectors present significant opportunities. The hospitality sector, particularly experiential travel and personalised services, also shows strong potential. The food and beverage sector, including alcohol-free options and gourmet products, offers promising avenues for growth.

Consumer segments worth watching

Despite high youth unemployment rates, the urban Gen Z remains optimistic about their financial future due to strong family support. They prioritise spending on dining out and cultural entertainment. Baby Boomers in tier-1 cities have benefited from past economic growth and hold positive consumption views despite low current consumption growth expectations. Millennials in tier-1 and tier-2 cities remain a significant growth engine for many companies but exhibit less confidence than their tier-3 counterparts. This confidence is attributed to lower living costs and better job security in tier-3 and tier-4 cities.

The macro trends identified by NellyRodi

These trends reveal a complex interplay of factors, including national pride, a growing focus on well-being, emotional shopping, personalisation, and digital technologies' influence.

• Local pride: “Guochao”, a new and strong sense of national pride, is driving increased demand for domestically produced goods and services. There is a strong shift in the perception of “Made in China.” It has been perceived negatively for many years and is now a symbol of pride. This is particularly evident in the sports and beauty sectors. This calls for non-Chinese brands to adapt culturally to compete with rising Chinese brands. The “Guochao” market should reach $388bn by 2028. Another striking example comes from Chinese sportswear brand Anta: their turnover in H1 2024 outpaced Nike by 20% and Adidas by 160%.
• The rise of women: contributing to the luxury market, Chinese women are increasingly entrepreneurs and members of company boards and, as such, become influential consumers, exhibiting independent spending habits and rejecting stereotypical marketing approaches.
• Well-being and health: they have become a top priority for Chinese consumers, driving demand for premium healthcare products, services (including plastic surgery), and experiences. Health is considered the ultimate luxury, reflecting the growing interest in mental health, holistic wellness, and preventative care. Also, China is the digital healthcare global leader (doctor-patient platforms, online pharmacies).
• Responsibility and sustainability: China’s CO2 emissions decreased by -65% between 2005 and 2023. Growing awareness of environmental issues drives demand for sustainable products (including second-hand) and eco-friendly practices, especially as consumers link durability to security and their aspiration for better times. Brands are increasingly incorporating sustainability into their marketing and product development strategies.
• Escapism: A desire for escape and personal growth fuels demand for travel, outdoor activities, and experiences that foster self-discovery. ‘City walks’ and the ‘20 minutes in the park’ movement gain traction, highlighting the role of nature in relieving stress.
• Ultra-digitalisation: China’s advanced digital infrastructure and the widespread adoption of online platforms are transforming the consumer landscape. The omnipresence of digital technologies in daily life impacts shopping experiences, brand engagement, and information access. There are countless platforms constantly evolving to increase innovation.
• Entertainment first: immersive experiences offering more than products have become necessary to enhance consumer engagement and brand loyalty. The use of augmented reality, virtual reality, and gamification is creating unique shopping experiences. Short-term pop-up shops and events are becoming increasingly popular, offering brands a way to generate buzz and engage consumers.
• Cultural and emotional elevation: a significant challenge for luxury brands is to define a specific ‘target emotion’ they want to evoke. Without this clarity, brands often resort to generic messaging that lacks impact. Brands should move beyond selling abstract dreams and instead focus on a precise emotional outcome. Emotional storytelling must be culturally relevant and shift from being brand-centric to client-centric. Brands should focus on authentic stories that resonate with their defined target emotion rather than relying on clichés like heritage or exclusivity.
• Regression and nostalgia: a trend towards regression and nostalgia is evident in the popularity of products and experiences that evoke childhood memories. The feeling of comfort and security gains traction in the Chinese context. This is reflected in collaborations with popular characters and brands.
• Service and personalisation: Consumers expect personalised service and unique experiences, which drive demand for one-to-one interactions, exclusive products, and customised offerings. 97% of Chinese consumers expect to be rewarded with special perks by brands during their shopping journeys.

China's economic environment presents notable challenges, and also offers opportunities for growth across various sectors. The evolving consumer behaviour highlights a shift towards quality of life improvements, with increased spending on education, health, and well-being. Moreover, the rise of national pride and sustainability concerns are redefining consumer expectations and market dynamics. As stated by NellyRodi, brands and retailers looking to succeed in China must adapt and understand that the value for consumers is no longer just determined by the products sold but by the brands’ ability to entertain, educate, anchor the brand in the culture, truly bring wellbeing and interact with consumers.

Credits: IADS (Christine Montard )

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The Drucker Forum, held annually since 2009, is a yearly opportunity to review management practice and question the state of research, a favourite combination from “management guru” Peter Drucker (1909-2005). The IADS attended the 16th edition of the Forum this month in Vienna. The theme was “the next knowledge work," questioning how organisations can deliver new value creation and innovation levels.

AI was obviously a centrepiece of the conversations, given the impact it has had so far on knowledge and innovation. While the overall conference themes were oriented towards knowledge workers, including researchers, scholars, and academics, it was interesting to relate them to the current situation in retail, where AI is seen as a transforming force for business models. Taking on what was discussed during the conference, AI appears to be, in fact, a pretext for more radical organisational transformations.

Paradoxically, achieving such transformation also does not systematically involve ground-breaking technological or intellectual innovation, as, many times, speakers were calling for a “back to the basics”movement in an updated way.

Introduction: the concept of “next management”

The late Peter Drucker predicted that the challenge for the 21st century would be finding ways to improve knowledge work productivity like manual and factory work did during the 20th century. He was also famous for considering management as a foundational value creating capability, rather than a mere business role. However, most of the political, intellectual and cultural elites keep on considering management as a tool serving short term goals, rather than a true social innovation able to change society at large.

This is why this 2-days session started with Richard Straub, founder and President of the Forum, introducing the audience to the concept of “next management” (new to half of the room). This five-year research initiative aims to provide organisations with a holistic method to boost knowledge workers’ productivity by continuously injecting innovative practices (and not implementing them in an incremental way as has been done so far). In addition, this method aims at optimising human investments rather than increasing them in a world where resources are increasingly limited.

Due to its englobing approach, it challenges the traditional boundaries of management and questions many of the structural elements that every professional has grown to take for granted during the 20th and 21st centuries: organisation charts, hierarchy and processes.

In short, a world which has radically changed can not be seen through lenses that have not been updated, independently of any technological breakthrough such as AI. While AI is accelerating the tempo, defining the “next management” playbook goes well beyond adapting to this new technology as it is a way for companies to adapt to the realities of a new world that has become much more complex, in many aspects.

However, for the “next management” to be perfectly accurate, one needs to review first the nature of knowledge workers and understand how it has evolved in the age of AI.

Dealing with innovation and knowledge

Where does knowledge work stand today, and where is it going?

Giampiero Petriglieri, an associate professor at INSEAD, thought-provokingly opened the topic by stating that “knowledge work as we know it is dead, and this is not due to AI.” For him, current work organisations have killed knowledge work due to their inability to evolve past a productivity-oriented model, inherited from the 20th century using measurement tools created for the industry and then transferred to intellectual work, still in use after five decades. Not only is a mechanistic approach to knowledge work, prioritising efficiency and productivity over humanistic values such as inclusion and freedom, obsolete, but it also puts the job in danger because it creates the very wrong impression that AI is a replacement for it.

However, he points out that organisations are increasingly efficient but also struggling to innovate. For him, this relates to the fact that knowledge productivity is not so much of an issue anymore but the purpose of learning itself due to the emergence of AI. To counter this, he used the analogy of a "machine" versus a "home" to illustrate the difference between instrumental and humanistic approaches to organisations, leading him to call for creating efficient but safe and hospitable workplaces, fostering a sense of belonging. AI is not enough to enable companies to be a good “home” to knowledge workers: “The knowledge world is dead...because now we realise that even when we share those humanistic values...we often do it through an instrumental lens. Let's keep people more comfortable; let's make our culture more congenial so we can all be more productive.”

The fact that AI pushes companies to re-think their core purpose and how welcoming they want to be to their teams has become even more urgent due to AI: Alex Adamopoulos, CEO of Emergn, stressed the importance of maintaining a human-centric approach amidst the AI boom, cautioning against the hype and emphasising the need for practical knowledge and a common vocabulary around AI. This remark from a practitioner suggests that fostering home-like working environments where employees feel a sense of belonging and are encouraged to grow personally and professionally is key to dealing with all the changes AI is bringing to intellectual work in general and innovation in particular.

Such views go beyond the traditional interrogations on how to deal with innovation in legacy retailer organisations (through new business units, dedicated committees, or resorting to consulting companies…). The Drucker Forum speakers suggest that to become a truly next-generation structure, current retail players need to reinvent themselves by rethinking the value proposition they want to bring forward to all their knowledge workers to get the best from them and implement a generalised culture of innovation.

But do we have the right innovation frameworks within organisations?

All Drucker Forum speakers agreed that the existing innovation frameworks are outdated. Valla Vakili, Global Head of Innovation at Visa, highlighted that AI now questions the very notion of innovation itself in an era where organisation size does not matter to be the most innovative possible. While in the past, large organisations had an edge in innovating for a simple question of available resources, we now live in a time of potential “one-person unicorns” as coined by Bain & Co during the IADS AI Retreat from last June. AI also redefines what progress is: while in the past, innovation was often associated with disruption and a defensive, antagonistic approach (the “innovator’s dilemma), AI now allows innovation to be much more offensive and imaginative. Vaikili argued that AI offers new tools to overcome past constraints on innovation, enabling a shift from a scarcity model to an abundance model (in other words,while many companies are good at innovating in a forward-thinking model, backward thinking is often overlooked).

Jayshree Seth, Chief Science Advocate at 3M, echoed this sentiment, emphasising the need to move beyond one-off initiatives like hackathons and “ideathons” towards a culture where innovation is a foundational element. She explained that “hackathons are often internally viewed as very cool, teams present beautiful ideas to ecstatic management… and nothing happens.” Instead, she stressed the importance of employee empowerment and radical collaboration within and across the broader ecosystem, a view supported by Julie Teigland, Managing Partner at EY, who explained that true innovation could only stem from “a close connection with all stakeholders, customers, employees, shareholders.”

Organisational reinvention is inescapable

Companies have little choice but to reinvent themselves in a world shifting from expertise-based to skills-based learning, as this is the only way to ensure employees can adapt and contribute in an ever-changing environment. The implications include investing in employee training and development, fostering open communication, and promoting cross-functional collaboration. Implementation requires a concerted effort from leadership to cultivate a culture that values collaboration and continuous learning.

Going further, this framework review, accompanied by a new approach to employee empowerment, is the only way out of the current lacklustre in AI block building. Vakili suggested a shift from an experimentation-focused approach to one driven by imagination, truly leveraging the power of generative AI. Organisations need to release the constraints of legacy systems (whatever their nature) to unlock this imaginative potential. This echoes a remark made by Bain & Co during the IADS AI Retreat in Berlin last June: while they acknowledged that AI had a disruptive potential for retail, they also mentioned that, so far, all the use cases looked like the same from one retailer to another, suggesting that, due to a certain mindset, innovation capabilities were hitting a glass ceiling in all companies. Vakili concluded by stating that, from her Global Head of Innovation perspective, a radical change of business model was needed to unlock new opportunities in innovation.

What AI really changes

Timing is paramount, but identifying the right people to educate too!

Professor David Beatty from the University of Toronto was very clear on how AI was seen in North America, not just as transformative but as an existential imperative for businesses: "In the United States, we regard AI...not as transformative, but as an extinction event. If you don't get started on this as a business, you're dead.” Failure to embrace AI could result in rapid obsolescence.

He also made the very interesting statement that AI was already reshaping industries at an unprecedented pace, but this was not visible in mainstream business press. This point was echoed by Rainer Zahradnik, Country Head Switzerland at Tata Consulting Services, who highlighted the "hidden revolution" of AI, where its most successful applications are often invisible to the end-user. He cited examples such as energy optimisation in Formula E cars and compliance software for banks. He also emphasised the potential of AI to push boundaries, using the example of designing a new air plane landing gear with minimal human intervention. He noted, "It's almost a hidden revolution of AI. Nobody knows that in your American car there's software that's optimising it."

Beatty was very vocal about the hurdles potentially preventing legacy companies from embracing AI:

• The average age of directors is 68 at the board level. Walmart only has 3 directors under 40. In the US, 41% of board directors are more than 70. However, this does not prevent boards from pressurising CEOs to move forward with AI; on the contrary, they are more active than CEOs. For instance, Marriott inked a deal with Alibaba only after significant pressure from the board of directors on the CEO, Anthony Capuano. CEOs have been resisting the change due to the necessity of ensuring “business as usual” was keeping the right pace. To overcome this, Beatty mentioned that an increasing number of companies were considering independent incubators, fostering innovation separate from established structures.
• Regulation also impacts the level of innovation. Beatty contrasted the relatively light regulatory environment in the US with the more stringent regulations in Europe, suggesting that the latter might stifle innovation. However, the panellists agreed that this could not be the only reason: routine and bureaucracy are also major obstacles to AI adoption in large organisations, with a strong tendency to reinvest in existing processes. Also, for Beatty and Zahradnik, Europe's risk-averse approach stifles innovation, a major source of concern at a moment when US, China and India are moving forward.

The leadership responsibility and its needed evolution in decision-making

Beatty called for a clearer understanding of everyone’s rules: the role of any growing organisation is to create procedures helping to normalise operations, while their CEO’s role is to have a clear enough mind to be able to see what is coming and might disrupt the business if no appropriate course change is taken (AI in this case).

He also urged board directors to engage with AI actively, emphasising the need for directors with relevant skill sets to help and advise CEOs. He recommended a phased approach, starting with educating the chair, then the full board, and finally the management team. Having said that, the extensive use of AI at the management level, especially to help the decision-making process, also calls for a mindset reset if leaders want to remain honest and transparent.

Matthis Bitton, a Ph.D student at Harvard University, had a fascinating exchange with Liesje Meijknecht, partner at McKinsey, on that topic. They both reminded the audience that while AI is a tool to manage complexity (which has been, in the past, traditionally outsourced to partners such as SAP or Salesforce), it is, in essence, trained on sets of data that are not neutral, objective or even fair.

From that perspective, using AI to prioritise decisions implies the acceptance that the criterium of trust does not matter at all: AI does not have any ethics and is not able to. Instead, they raised the fact that AI should be used in fields where it surpasses humans much more, such as big data, mathematics, testing. In the decision-making field, AI raises more issues than what it solves, not to mention that the more it is used, the less transparent it becomes. Bitton and Meijknecht pondered over the dangers of over-regulation (which raises the question of knowing if algorithms should be more scrutinised than humans and if yes, why) and it's contrary, i.e. granting too much power to Silicon Valley.

All in all, the panel concluded, AI creates a moral dilemma, i.e. a choice where both options are problematic. Given that AI is unavoidable, the only way for leaders to make their way through it is to define what kind of pair of “ethical glasses” they want to wear and make sure they use them. Interestingly, that also led to the conclusion that this was the opportunity for businesses and academic institutions to focus again on human sciences rather than hard sciences and data. Mattis mentioned that the Harvard Business School had not hired a single philosopher in 20 years time. It is rather ironic that AI finally pushes us into becoming more human.

How questions about AI end up reviewing the old way of seeing the world

Artificial Intelligence raises questions that go beyond it, as it actually forces us to challenge some of the visions that have shaped the business world for the past years.

Rethinking the role of offices

The expansion of remote collaborative work that was favoured during the pandemic is now ending, with many companies asking their teams to return to their office (this applies especially to knowledge workers). Giampiero Petriglieri, from INSEAD, raised the topic when discussing the fact of “humanising” the workplace by mentioning that remote working was also a trap for junior profiles, who were growing with more limited access to experience than when in the office with their co-workers. He qualified the online meeting as being “a constant reminder of each other’s absence”.

This created some exchanges between practitioners: Pierre Le Manh, President and CEO of PMI Project Management Institute, described PMI's fully remote model, highlighting the benefits of increased access to a broader talent pool and reduced environmental impact. He emphasised the importance of intentional, meaningful in-person interactions rather than forcing a daily return to the office.

In contrast, Liz Cane, VP People at Palo Alto Networks, described Palo Alto Networks' approach, which encourages a return to the office for certain roles, particularly those involving early career development, R&D, and collaboration. She highlighted the importance of in-person interaction for fostering relationships, creativity, and innovation.

The discussion concluded with a call for a collaborative design process to determine the optimal work arrangement for each organisation, considering its specific needs and goals. In other words, the topic is not so much about coming or not coming to the office but adapting physical presence according to the projects and issues currently being solved.

Redefining success

With AI allowing the phenomenon of “one-person unicorns”, the size of organisations does not matter anymore, as previously said. Going further, Julie Teigland from EY argued that this also called for a redefinition of how we measure and assess success: it might not be measurable in market shares anymore. For her, “big is no longer beautiful”, as illustrated by Tesla, which is not the largest EV manufacturer in the world (BYD produces twice as much), but generates unprecedented levels of loyalty ,or companies such as Dyson or Patagonia, all seen as market leaders in spite of them not being the largest players. She argues that large operators are under cost pressure to keep the leading position, while being smaller and more efficient, a feature allowed with the generalisation of AI, allows to be more agile.

Keiishiro Nishi, Senior VP and head of CEO office at Fujitsu, provided an interesting example of this when he mentioned that Fujitsu, a tech company, willingly decided to close its PC business and halve its revenue to launch new higher-margin businesses.

Kill “zombie ideas”

A full session was dedicated to “zombie ideas”, defined as “good old recipes” that have resisted the test of time for the wrong reasons, as they appeal to an apparent common sense that is unproven. Now that AI allows a data-driven approach, such zombie ideas should be eliminated (even though human instinct and nuanced interpretation should be kept in the loop). Michele Zanini, co-founder of the Management Lab, Tammy Erickson, Leadership Advisor at the LBS, Lenka Pincot, Chief of Staff to the CEO at PMI , and Robin Speculand, CEO of Bridges Consultancy, together reviewed the following ideas:

• “More control leads to better performance”: overemphasising standardisation, rules, and control stifles adaptation, innovation, and responsiveness to local conditions. Zanini highlighted the example of SAP riddled with 500 KPIs, demonstrating how over-standardisation can cripple a company. He advocated for mutual accountability, norms and principles over measurement.
• “Top-down changes work”: engineered, top-down change initiatives often fail due to insulation of leadership, leading to incremental or overly risky changes. Zanini advocated for syndicating responsibility for change more broadly.
• “Leadership is positional” (i.e., experience and wisdom are correlated with rank): Equating leadership with organisational rank discourages initiative and talent development outside the executive level. Zanini argued for recognising leadership competencies regardless of position.
• “Planning is everything”: sticking to rigid strategic plans in a volatile environment limits agility and responsiveness. Pincot emphasised the need for "anti-fragility" and adaptability, citing the example of athletes training for a race with obstacles. Erickson cautioned against excessive planning, which can hinder flexibility and lock organisations into outdated trajectories.
• “Strategy first, corporate culture second”: Speculand questioned the continued emphasis on strategy over culture, referencing Peter Drucker's observation that "culture eats strategy for breakfast."
• Sticking to outdated management concepts: Speculand criticised the reliance on out dated management models and frameworks, comparing it to using Windows 95 in the modern era.
• Consider that full-time employment is ideal and what all workers are looking for: Erickson suggested that work is increasingly chosen based on marketability and human asset value development rather than solely on compensation. She argued against paying based on hours worked, advocating for payment based on tasks, outcomes, and value creation. She also emphasised the need to treat employees as volunteers, recognising their autonomy and choice.

Such a conversation is not only theoretical: Speculand shared the example of DBS Bank, which successfully addressed the "zombie idea" of unproductive meetings through a structured approach, saving significant employee hours. Here, also, the panel was adamant that AI had the potential of both perpetuating and slaying zombie ideas. It concluded by emphasising the importance of thoughtful prompting and avoiding a "tyranny of data."

The 16th edition of the Drucker Forum highlighted how AI acts as a catalyst and a pretext for fundamental organisational transformations, extending far beyond technological innovation, including in the analogue world.

While AI offers unprecedented opportunities for imagination, creativity, and operational efficiency, it also underscores the importance of retaining human-centric approaches to foster innovation and adaptability. AI has an amplification effect that allows to challenge and review processes taken for granted for decades, as mentioned by Amy Edmondson, professor at the Harvard Business School. She explained that AI allowed businesses and individuals to fail more often, and take “smart risks”. AI ushered in the age of “intelligent failures” (different from “preventable failures” to avoid), which should be celebrated by “learn-it-all” teams willing to learn from every experience and learning opportunities.

As the discussions at the Forum emphasised, success in this evolving landscape will depend on adelicate balance between harnessing AI's potential and reinforcing the human values that underpin sustainable and innovative workplaces. Ultimately, redefining the role of knowledge work in an AI-driven world offers an unparalleled opportunity to shape a future that is not only more efficient but also deeply human.

Credits: IADS (Selvane Mohandas du Ménil )

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Artificial intelligence (AI) is revolutionising retail, impacting everything from customer service to supply chain management. Yet, as outlined in our recent IADS Exclusive titled "AI in retail: why culture, values, and strategic goals matter more than tech," successful AI adoption involves more than simply implementing new tools. It requires deep alignment with an organisation's broader mission, culture, and values. This exclusive further addresses one of the most critical challenges in AI deployment—the "black box" problem, which refers to the challenge of interpreting or explaining how complex AI models arrive at their decisions. This piece explores how retail leaders can ensure transparency, accountability, and ethical use. Retailers can fully harness AI's potential by focusing on governance, explainability, and innovation while avoiding the risks of opaque decision-making systems. A lack of clarity can impact both customers and employees, undermining trust and creating potential issues with compliance and fairness. Our focus here is on bridging AI's capabilities with clear, human-centred governance by prioritising transparency and informed oversight to channel AI’s potential for people-first innovation.

Beyond the “black box”: accountability, explainability, and transparency

Cracking open the black box 

AI’s promise lies in its ability to make decisions faster and more efficiently than humans. However, many AI systems operate in ways that even their developers cannot fully explain, creating what is known as the "black box" problem. AI algorithms work by analysing vast amounts of data through multiple layers of complex calculations, where each layer transforms the data in ways that are difficult to track. Although developers set the initial parameters, the system's learning process often results in decision paths that are nearly impossible to map or interpret in clear, human-understandable terms. This issue becomes especially risky in retail, where decisions like product recommendations, dynamic pricing, or hiring must be accurate and fair. Unlike industries where AI operates behind the scenes, retail relies on customer- and employee-facing decisions that are immediately visible, impacting trust, satisfaction, and loyalty among both groups. As a result, explainability and fairness in AI outcomes are fundamental concerns, they are vital to maintaining competitive advantage and retention.

Retail leaders must prioritise transparency at every stage of AI development and implementation to overcome this. Documenting data sources, algorithmic logic, and decision-making processes allows businesses to provide clear explanations when needed.1 Unlike in traditional systems, where a clear set of rules may guide a process, AI often uses complex, data-driven models that can be harder to interpret. This opacity raises concerns not only for internal governance but also for customer trust and regulatory compliance.

Retailers must ensure their AI systems are explainable to stakeholders at all levels, from customers and employees to regulators and internal governance teams. By documenting and understanding each decision made by AI systems, companies can avoid the risks of operating in the dark.

Human oversight in AI 

As discussed in "AI in retail: why culture, values, and strategic goals matter more than tech," AI is not a stand-alone solution. Its success hinges on alignment with human oversight and strategic goals. AI-driven systems require ongoing human accountability to ensure they function as intended.

Leaders in retail need to establish clear governance structures for AI deployment, designating dedicated teams to oversee AI systems and address potential issues, safeguarding the interests of both employees and customers2. This was seen in Tesco's pilot program for AI-driven dynamic pricing, where IT teams and department heads collaborated closely to integrate AI without compromising existing business processes. Such coordinated efforts are critical for ensuring that AI-driven decisions align with operational goals and ethical considerations.

Keeping in mind that AI cannot operate effectively without human oversight, retail leaders should set up dedicated governance teams to monitor decisions made with the use of AI, ensuring they are both accurate and ethical.

Building trust through transparency 

Retailers can no longer rely on opaque AI systems, especially as customers, employees and regulators demand greater transparency. In today's marketplace, trust is currency and ensuring that AI tools operate transparently is vital to maintaining it. Regular audits and assessments, such as Data Protection Impact Assessments (DPIAs) and conformity assessments, can ensure that AI systems meet legal requirements and uphold responsible practices throughout their lifecycle.

Marks & Spencer, for instance, conducts ongoing assessments of its AI systems to ensure they align with both customer expectations and ethical standards. These practices help maintain transparency and foster trust across stakeholders.

Regular, transparent assessments of AI systems, paired with continuous monitoring, ensure that AI tools remain aligned with business goals, legal standards, and customer expectations.

Positioning AI as a creative partner in personalisation and innovation

While AI has traditionally been associated with operational efficiency, its potential as a creative and inclusive tool is equally significant. AI agents have revolutionised customer interactions, offering personalised product recommendations and real-time customer support through chatbots and virtual assistants3. Retailers have the opportunity to use AI not just to improve processes but to drive innovation in areas like product design and customer engagement, fostering a more inclusive and sustainable future for retail. For example, some AI-powered digital labs are demonstrating innovative uses of AI creatively to generate custom visuals and personalised content, offering valuable strategies to amplify brand identity and foster impactful customer engagement. Additionally, AI platforms in custom jewellery create unique pieces tailored to individual specifications, blending luxury with personalisation on a scalable level. There is also untapped potential in applying AI to refine employee experiences, aligning training and support with personal strengths and brand values.

AI for inclusive fashion design 

Fashion has historically struggled to cater to all body types and physical needs, but AI offers a pathway to change that. By analysing consumer data such as body measurements, feedback, and preferences, AI can help create clothing with a more inclusive fit. In the bra industry, for example, AI-driven platforms are transforming design by offering custom-made options tailored to each individual's unique measurements, promising a "perfect fit" that addresses both comfort and support. This technology not only enhances comfort but also addresses long-standing challenges in fit, design, and accessibility. As previously mentioned, parallel advancements in AI-driven customisation tools for jewellery mirror this trend, allowing customers to design pieces that reflect their personal style and requirements. Moreover, AI empowers designers to balance aesthetics with accessibility, supporting the creation of inclusive pieces that retain quality and appeal. This approach can be transformative, ensuring that new products meet functional needs and offer greater comfort and accessibility.

AI as a catalyst for sustainability 

Sustainability is an area where AI can make a profound impact. Beyond optimising supply chains, AI can help discover new eco-friendly materials, minimise waste, and predict customer demand more accurately to prevent overproduction. IKEA, for instance, uses AI to track real-time customer preferences, allowing it to fine-tune inventory and reduce excess stock, thereby cutting waste. Additionally, some digital content labs employ sustainable practices by reducing waste in production, and AI-powered augmented reality (AR) shopping solutions help consumers make more precise purchase decisions through virtual try-ons, which decreases returns and supports more sustainable consumption.4

Moreover, AI can simulate the environmental impact of materials and operational decisions, guiding retailers toward more sustainable practices. By integrating sustainability into AI-driven innovation, retailers can meet both customer demands and environmental goals, positioning themselves as leaders in responsible technology use. Overall, AI remains a powerful tool for driving sustainability in retail, from optimising supply chains to minimising waste and promoting eco-friendly choices.

The future of retail spaces: creating the "third place” 

AI can help retailers move beyond traditional shopping experiences by designing spaces that function as "third places"—spaces where customers can shop, relax, and engage with their community. AI tools that analyse foot traffic and customer behaviour enable retailers to create environments that cater to families, young professionals, and other demographics. For example, Nordstrom uses AI to enhance customer service and design spaces that foster interaction and loyalty. Retailers can use similar insights to create experiences that go beyond transactions and resonate emotionally with customers.

Increasingly, retailers are integrating extended reality (XR) technologies—comprising augmented reality (AR), virtual reality (VR), and mixed reality (MR)—to transform in-store experiences further. Each of these technologies provides unique enhancements: augmented reality overlays digital elements onto the real world, virtual reality immerses customers in fully digital environments, and mixed reality combines the two, allowing for real-time interaction between physical and virtual elements. With these tools, customers can try on products virtually, explore gamified store layouts, or engage with product details in 3D, adding new layers of interaction that make shopping both dynamic and memorable.

Moreover, gamification strategies supported by AI and XR deepen these connections by transforming shopping into an interactive journey. AI-driven rewards, achievements, and challenges motivate customers to engage more fully, creating a dynamic and memorable in-store experience. This gamified approach not only draws customers back but also shifts the retail experience from a routine task to an enjoyable, impactful activity. Together, these innovations create an atmosphere where shopping is functional, immersive, and personally engaging.

Multigenerational workforce: Millennials, Gen Z, and Gen Alpha bridging the AI gap

The rise of AI in retail is not happening in isolation. It is unfolding in an era where the workforce is becoming more multigenerational than ever before, spanning Boomers, Gen X, Millennials, Gen Z, and, in the coming years, Gen Alpha. The younger generations—Millennials, Gen Z, and soon Gen Alpha—are not only shaping consumer trends but are also at the forefront of AI adoption in the workforce. Their digital fluency allows them to bridge the gap between traditional retail practices and AI-driven innovations.

Millennials and Gen Z: leading the charge

Millennials and Gen Z employees bring a unique set of skills to the table, particularly in understanding how AI can enhance customer and employee experiences.5 These generations are digital natives, comfortable with using AI tools to create more personalised and efficient shopping experiences, ranging from tailored customer interactions to streamlined employee training and support systems. Their affinity for innovation makes them ideal candidates for roles that involve AI governance, strategy, and implementation. In many organisations, these generations are the bridge between leadership’s vision and the practical application of AI solutions on the ground. In some organisations, interns play a crucial role in advancing AI initiatives by experimenting with AI tools innovatively. This open approach allows retailers to test and refine straightforward, adaptable solutions, often achieving quick wins and practical insights into AI’s application in retail environments.

Gen Alpha: the future of AI in retail

Looking ahead, Gen Alpha—those born after 2010—will be the most AI-native generation yet. As they enter the workforce in the coming years, their expectations for seamless, tech-driven environments will push retailers even further toward AI adoption. Retailers must prepare now by fostering a culture of continuous learning and adaptability.  Unlike previous generations, Gen Alpha is growing up in an environment where AI, XR, and interactive digital interfaces are the norm. This digital immersion will likely lead them to prioritise seamless, personalised, and ethically aligned AI applications as they enter professional roles.

Gen Alpha’s digital-native perspective positions them to lead retail innovations, especially in personalisation, transparency, and sustainability. As this generation enters retail roles, their advanced tech skills and commitment to socially conscious, transparent practices will further push the industry toward robust AI adoption and integration. Preparing for this workforce shift involves fostering a culture of continuous learning, with Gen Z and Millennials guiding Gen Alpha as they begin taking on leadership roles.

Governance done right: legal and ethical compliance

AI in retail must adhere not only to business goals but also to legal and ethical frameworks. Retailers need to recognise that while AI can enhance operations, it must operate within the confines of privacy laws, consumer protection standards, and intellectual property rights. Effective AI governance requires a solid grasp of multiple disciplines, including AI, data science, law, risk management, and ethical standards. Given the rapid evolution of this field, governance frameworks and policies developed today will likely require updates and adaptations in the near future. Pragmatism is essential, as well as understanding that not using AI can pose greater risks than using it responsibly.

Staying ahead of the regulatory curve

As AI evolves faster than the law, retailers must be proactive in understanding and complying with existing legal frameworks. For instance, AI systems used for hiring or pricing must adhere to anti-discrimination laws and consumer protection standards. The U.S. Federal Trade Commission (FTC) has made it clear that AI tools cannot violate existing regulations, and failure to comply can result in significant penalties. Implementing governance frameworks like the EU AI Act or ISO 42001 can provide structure, but governance professionals must remain adaptable to navigate the changing legal landscape effectively.

Successful AI governance is not limited to enforcing rules but involves fostering a culture of ethical responsibility. This requires a mindset that balances risk with opportunity. Companies must work closely with legal teams to ensure that AI systems do not inadvertently breach regulations. This requires continuous legal oversight, particularly as AI evolves and new use cases emerge. Being proportionate in AI governance, focusing on high-risk areas and scalable oversight, is critical to effectively balancing AI’s benefits against potential risks. Retailers need to ensure that AI systems comply with existing laws and regulations, working closely with legal departments to mitigate potential risks, protecting both customer data and employee rights in the process.6

Navigating intellectual property challenges

As AI supports the creation of new designs, marketing strategies, and other innovations, intellectual property (IP) issues will become increasingly important. For example, recent rulings on AI-generated content raise questions about ownership rights. Retailers need clear policies regarding IP ownership for AI-driven innovations, ensuring they are legally protected while avoiding conflicts with third-party rights. This challenge requires AI governance professionals to understand not only the technology but also the intersections of IP law, ethical standards, and commercial pressures. A perceptive approach to AI governance (building a shared language around AI and data science) facilitates mutual understanding and credibility, strengthening governance practices across the organisation.

Continuous governance for continuous innovation

AI governance is not a one-time effort but a continuous process that requires regular updates and audits, as well as alignment with organisational values. This is particularly important when addressing dimensions such as bias, data privacy, and fairness. Retailers must adopt governance frameworks like ISO 31000:2018 Risk Management Guidelines or the NIST AI Risk Management Framework to ensure AI systems comply with legal and ethical standards. Regular audits will help navigate the complexities of AI and maintain responsible use.7

As retailers face the complexities of AI deployment, they must prioritise thoughtful planning, structured governance, and continuous adaptation to ensure successful outcomes. Here are the key practical steps for integrating AI, which serve as essential takeaways:

• Conduct a formal needs assessment: Start by understanding where AI can add the most value, ensuring alignment with both operational challenges and broader business objectives.
• Align AI with organisational goals: AI must not operate in isolation. Leadership should set a clear vision and develop a roadmap with prioritised use cases that target strategic impact.
• Develop proof of concept and pilot programmes: Test AI through controlled pilots, refine based on real-world data, and involve key stakeholders across departments to ensure AI integrates smoothly with existing systems.
• Iterate and improve before full-scale deployment: Do not rush into full implementation. Learn from pilot results, iterate, and document decisions to create a responsible and transparent AI framework.
• Plan thoroughly for full-scale deployment: Ensure detailed planning, resource allocation, and ongoing performance monitoring to mitigate risks and avoid AI becoming a “black box.”

Beyond technical steps, continuous adaptation and monitoring are necessary to keep AI systems aligned with business objectives and ethical guidelines. By continuously evaluating and refining AI systems, retailers can unlock AI’s potential as a strategic asset that drives innovation, inclusivity, and sustainability. At its best, AI governance becomes a key enabler of long-term value. Retailers who embrace governance frameworks and standards, coupled with transparent, accountable practices, will be well-positioned to succeed and thrive in a future shaped by AI, ultimately benefiting both employees and customers with a responsible, human-centred approach.

The "black box" challenge highlights the dual impact of AI in retail: AI systems shape customer experiences in areas like personalised shopping and dynamic pricing, and they influence employee-related decisions, such as hiring and resource allocation. Yet, these systems must themselves be shaped and guided by human oversight. This interdependence calls for transparency and accountability, ensuring that AI-driven decisions are effective and aligned with the core values and needs of employees and customers. AI operates as a "socio-technical system"—meaning it blends both technical processes and human influence. This requires a strong foundation of ethical, human-centred governance where AI complements company culture by prioritising people and data integrity over purely algorithmic outcomes.

AI is best used as a tool to support, rather than replace, human judgment, helping decision-makers make informed choices through simulated insights. Such a foundation ensures that AI complements organisational culture, expanding possibilities while adhering to human-centred values. A purpose-driven approach to AI integration paves the way for sustainable growth and innovation, allowing technology to amplify human values and propel the retail industry toward a future rich with meaning and resilience.

Credits: IADS (Maya Sankoh)

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Last October, Manor gathered its business partners to introduce them to its new Men’s and Women’s fashion concept, unveiled in the newly refurbished Basel store and supported by a press release issued the same day. It was the first time that Manor conducted such an event, which reminded of what Boyner does to keep connected with its local suppliers and partners in Turkey./nbsp]

For Manor, an IADS member since 1968, it was, however, an excuse for a much more comprehensive update about every category, the company itself, and where the CEO, Roland Armbruster, sees it in the coming years. This is why the format took the shape of a keynote, modelled after tech companies, with Armbruster, CMO Sandra Kottenauer and CFO Thomas Stocklin, taking the stage solo one after another to discuss product strategy, omnichannel updates, belief in more stores, retail media, and enhanced cooperation with brands and suppliers. The session ended with a Q&A with the three top executives, moderated by Sandra Kanzig, Communications and Marketing Director.

The grand event was complete with a staged visit to the revamped Basel store, so the audience could discover the new ground floor (cosmetics, perfumes and accessories) and the first and second floors (men’s and women’s fashion).

In the aim to become Switzerland’s fashion destination, Manor goes lifestyle

As Manor seeks to solidify its role as a compelling brand within Switzerland's retail landscape, it emphasises fashion, a key driver of the retailer’s brand identity. Over the next three years, Manor will invest in refurbishing its top 12 stores’ fashion areas, i.e. 20,000 sqm (which account for over 50% of the company's turnover), to create a consistent, nationwide brand image, particularly through enhanced lighting concepts.

A critical aspect of this strategy involves clearer segmentation of Manor's fashion offerings, moving from a disorganised shopping experience to a well-defined lifestyle segmentation, focusing on classic, contemporary, and casual styles. This shift acknowledges the evolving nature of consumer preferences, where lifestyle takes precedence over age in fashion choices. To support this, Manor is introducing 20 new brands tailored to regional preferences, reflecting the diverse fashion tastes across Switzerland, sometimes in exclusivity (in Basel, American Vintage, Someday, Hugo, Michael Kors, Liu Jo, G-Lab or Ted Baker were not represented before). The accessories segment is also receiving significant attention, to offer consumers a complete lifestyle experience.

Manor's private label will align with these segments, ensuring coherence and appeal alongside premium international brands through astute in-store positioning. This strategic alignment extends into digital realms, where Manor is poised to take significant strides in retail media, leveraging digital assets to enhance brand communication and consumer engagement.

In the beauty sector, where Manor holds a strong market position, the focus remains on innovation and customer experience. Manor aims to maintain its leadership by continuously introducing new brands and services, particularly in emerging wellness and green beauty areas. Deeper collaborations with brands like Rituals and Sephora exemplify Manor's commitment to co-creating unique in-store experiences that cannot be replicated online, emphasising the value of personal service and exclusive offerings.

In the non-food categories, Manor is strategically refining its sports and toys offerings, focusing on key areas that align with customer interests. By concentrating on training and outdoor apparel instead of bulky items like skis, Manor adapts to the logistical realities of city centre locations. In toys, the opportunity lies in creating interactive, experience-driven spaces that serve as family-friendly destinations, enhancing in-store engagement and online growth.

The food sector remains a pivotal traffic driver for Manor's physical stores, distinguished by a market-like atmosphere offering personalised service and ultra-fresh, homemade products. This unique positioning helps attract a steady flow of customers, benefiting all store categories. Significant investments are planned for Manor's supermarkets and restaurants, particularly in major locations like Geneva, which will undergo refurbishments to enhance the food shopping experience further.

Marketing efforts are also being revamped, with a new centralized team and a fresh visual identity to deliver consistent brand expression across all channels. Manor is embracing a more modern, approachable aesthetic and plans to leverage brand ambassadors like Olympic champion Wendy Holdener to enhance local relevance and trust. Regarding technology, new investments in CRM have already bolstered customer acquisition by over 20% annually. Now, the focus shifts to customer activation, leveraging data to enhance basket sizes and customer engagement through targeted marketing based on purchase affinities. This approach is expected to double the value of CRM-linked customers.

Manor's strategic transformation: a call for enhanced partnership models

Manor is leveraging its unique market position to drive increased footfall in urban centres while enhancing brand value across physical and digital platforms. A 200+ million Swiss franc investment backs this strategic initiative to optimise its value proposition, including major store refurbishments in Basel and Lausanne (2024), followed by Lugano, Vevey, and Geneva (2025).

The strategy presents a compelling mutual benefit proposition: through co-investment, both Manor and its partners stand to maximise returns. While selective store closures are occurring in underperforming regions like Ticino, Manor's commitment to physical retail remains robust with over 50 locations maintained and enhanced. A cornerstone of this commitment is the planned 13,000 sqm flagship store in Zurich, set to open by 2027, featuring innovative concepts across fashion, home, beauty, and dining segments.

Manor also plans to invest in its sales teams, enhancing customer service skills and brand knowledge, provided partners play the game and decide to move in with new models (such as concessions) at Manor. This aligns with broader retail trends where transitioning from wholesale to concession models has shown a  25-30% sales increase. This is why Manor’s top brass tactically emphasised the importance of a collaborative approach, inviting partners to contribute meaningfully across three main pillars, offerings, story, and operations:

• Offerings improvement: ensuring premium product assortment in urban locations and digital platforms, primarily through concession models designed to optimise partner offerings,
• Brand storytelling: enhancing brand visibility across all touchpoints to strengthen consumer mindshare,
• Operational excellence: implementing seamless operations that showcase innovation while delivering powerful joint marketing messages through Manor's new Retail Media platform.

These collaborative initiatives are designed to maximise in-store and online opportunities for suppliers, streamlining the supply chain to enhance consumer-facing value. By ensuring high-quality products are delivered on time and optimising digital data exchanges, Manor aims to minimise time-to-store and reduce warehouse durations. This improves stock flow and accelerates product availability across all sales channels, leading to increased full-price sales and decreased discounts through shared inventory risk management.

Furthermore, they insisted that Manor is a solvent partner, facilitating sustainable investments in the retail sector. Unlike the market average payment period of 50 days, Manor has reduced this to just 25 days. Together with their parent company, Maus Frères, they have introduced a supplier financing option poised to enhance financial flexibility for partners further. That was also a way to kill the tenacious rumours that have spread for years suggesting that the company was for sale.

How is the Basel store delivering its promises?

The Basel location serves as a prototype for Manor's transformation under new artistic director Volker Kächele, who joined in February 2024. His 360° approach ensures brand consistency across all customer touchpoints—from store windows to digital platforms—creating a unified, customer-centric experience. Everything has been de-siloed: he also supervised the brand revamping, which is visible at the cash desks. The dynamic and relaxed seasonal campaign, displayed on kakemonos and in-store screens, also caught the eye.

Consequently, the first answer is yes, the promises are delivered. The new atmosphere is immediately felt when entering the store, thanks to the overall colours, the lighting, and how the new Manor brand identity is subtly present everywhere.

It also gives much more space for third-party brands to express themselves through 2 approaches:

• Either by maximising the visibility that concessions allow, as exemplified on the ground floor by the massive presence in entry-price jewellery given to  Phantasya, Pandora and Swarovski, or, in the cosmetics section, the hard-to-miss Sephora stand.
• Or through the work done with all furniture suppliers to rethink the display units, with lower, more accessible and perspective-friendly units that focus on products and brands.

Consequently, the gaze runs freely on all floors, and visitors feel that the space is clear, with visible and identifiable sections.

Some elements are thought out in detail and show to what extent Manor aims to be a place to visit and live, not only a place to purchase. For instance, the watch stand, operated with Hirsch, a watch strap manufacturer, is also a service point where customers can have their items revised, repaired, or customised. It also sells accessories, such as electric storage boxes for automatic watches, fully representing the watch universe.

Another point that caught the attention during the visit was the notion of partnership that Manor’s top management was calling for during the presentation. Some brands are already playing the game, such as Saint Laurent, which offers its “Vestiaire Olfactif” exclusive collection on the ground floor, in addition to the more commercial lines. For now, it is the only luxury brand to present its high-fragrance line, but it clearly shows the shift that Manor is making.

Finally, while Manor’s CMO tackled the topic without deep-dive into it, Manor’s private labels’ upgrade is also very visible now, not only through their increased coherence with the general store environment but also through astute zoning: for instance, Manor’s contemporary line is adjacent to Levi’s, while in sportswear, it is near Nike. The idea is clear: Manor’s private labels are not by-products or second thoughts but a desirable component of the store's offer.

Under Roland Armbruster's leadership, Manor is executing a rapid and comprehensive transformation that defies stereotypes about Swiss conservatism. The pace and scope of change demonstrate a bold vision for retail innovation, setting new standards in the Swiss market.

In the coming weeks, Manor will engage partners individually to explore transformation opportunities and review contributions. This means that the Basel and Lausanne renovations mark just the beginning of Manor's ambitious journey toward retail excellence, and more changes should be expected in every aspect of the business in the coming months and years. Stay tuned for news from Switzerland!

Credits: IADS (Selvane Mohandas du Ménil)

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Singapore, officially known as the Republic of Singapore, is a member of the world’s exclusive club of city-states, along with Vatican City and Monaco. Singapore was even identified in 2015 by the Financial Times as “the world’s only fully functioning city-state”, with its currency, a large airport acting as a worldwide hub, one of the busiest maritime ports, and fully fledged armed forces (a feature that the other two do not have). Singapore’s numbers are astonishing: it was the 4th most competitive economy in the world in 2023, one of the world’s very few countries to be rated AAA by S&P, Moody’s and Fitch altogether (and the only one in Asia), the second densest city in the world after Monaco, the second country in the world in terms of being a business-friendly place. 100% of its citizens are equipped with smartphones (a feature that even South Korea, an ultra-connected market, does not reach).

Singapore’s reputation in terms of productivity is well-established. Still, combined with tourism (Singapore is the 5th most visited city in the world and the second in Asia, thanks to its “City in Nature” positioning promoting sustainable tourism), it becomes a natural destination for anyone versed in retail. The state in its current form is 107 years younger than the first department store to have opened there, Robinsons in 1858, when Singapore’s population was 80,000, of which 50% were Chinese.

Today, retail represents 3% of the national workforce and 1.4% of Singapore’s GDP, serving nearly 6m inhabitants. Most of its iconic department stores are located on Orchard Road, which gives visitors the feeling of seeing double, given the ubiquity of luxury and fashion labels there. This situation raises some serious questions regarding the still-operating department stores (Robinson’s closed for good in 2021): how are they differentiating? What is up-and-coming in such a competitive retail landscape?

Are department stores in Singapore a disconcerting picture of the past?

Strolling down the 2.2 km-long Orchard Road is an authentic luxury experience, in a literal way: the whole location and its street furniture were revamped in 2010 for a total of $40m, to be on par with the retail tenants: more than 50 luxury flagship stores, 5,000 fashion and retail lifestyle stores, 800 restaurants, bars and cafés, and at least 4 department stores, all over more than 8m sqft of retail space. It is a culture of plenty, and one might see the same logos repeatedly, from Louis Vuitton to Gucci, Chanel or Dior. Every retailer preempts as much visual space as possible to be louder and more attractive than its competitors, including luxury brands.

It is stunning to see so many different department stores in such a small area, in a densest way than in other international shopping hubs such as New York, Paris or London: customers have the choice between 4 different department stores, all located less than 3 minutes from each other. Differentiation is, therefore, key to making sure they stand out, and, in earnest, the mission is not accomplished: even though Tangs, the now-oldest Orchard Road department store, has implemented some very nice ideas to create loyalty and a sense of belonging, it is difficult to feel excited by the department store scene.

Among foreign operators, Indonesia-based Metro Department Stores is the oldest in Singapore. It opened in 1957 to sell overseas labels to wealthy housewives. The first store on Orchard Road opened in 1965 and relocated when the Paragon Mall (in front of the first location) opened in 1987. After having up to six stores in the 2000s, Metro now only operates the Orchard Road flagship and the suburban location of Causeway Point. It focuses on private labels to complete an international offering.

The Paragon Mall was refurbished in 2008 for $82m, including opening new retail spaces. This allowed it to go upmarket and attract luxury brands such as Tod’s, Prada, Miu Miu, and Gucci, as well as Marks & Spencer and Toys”R”Us. It offers upscale dining options such as the Imperial Treasure Peking Duck, a supermarket, and the expected array of services in such a location: concierge, free Wi-Fi, members’ lounge, and EV and phone charging./nbsp]

In such a context, anyone would expect an upscale experience when visiting the anchor department store, which is far from the case. A major issue comes from Metro's location within the mall, at the back and up one floor, forcing customers to use escalators to visit a store that lacks both efficient in-mall frontage and outside views and windows. Consequently, the department store has low visibility and cannot entice international visitors without prior knowledge of the mall to come in and visit.

The store is developed on three floors in a very classical manner: cosmetics, fragrances, and women’s shoes on the first floor, women’s and men’s apparel and accessories, and services on the second, while home, kids, and lifestyle can be found on the last floor.

When arriving in the store, the experience in the cosmetics and fragrances area is luxurious and efficient, with branded counters without walls, allowing a sense of space. The shoe area is similarly wide open, providing perspectives and a sense of plenty. The apparel floor feels less luxurious, as fewer luxury labels and many more mid-market names are displayed in a generic setting, therefore not providing a memorable experience. The feeling gets more present on the last floor, where the purpose is clearly to sell products rather than propose a special experience. Some decisions are surprising:

• The store is offering suitcases on every floor, even though they are officially displayed on the last one according to the floor maps,
• Similarly, the transitions between categories can sometimes be unsettling, such as the second floor, where lingerie is mixed with luggage and men’s apparel on sale.
• Lego is advertised on the floor plans and suggests a significant shop in the shop with a branded display, while in fact, the products are on shelves near other brands without a specific effort to promote the brand.

Traffic was satisfying at the time of visit, which suggested that the department store succeeds in attracting a crowd of loyal locals. However, it is difficult to understand Metro’s selling point to international customers apart from discounts and rebates.

Japanese department store Isetan entered Singapore in 1983 with a store on Parkway Parade (the store was closed in 2022), in Wisma Atria on Orchard Road in 1986 (Isetan closed the store in 2015 and converted it into rental units keeping the Isetan umbrella name), in Orchard Road’s Shaw House in 1993 (the current flagship), as well as in 2 other suburban locations in 1995 and 2010. Today Isetan operates 3 locations in Singapore.

The Shaw House was built in 1993 on the old Lido Cinema and sits at the crossroads of Orchard Road and Scotts Road, leading some locals to dub it “Isetan Scotts”. The store is expanded on 5 floors: a basement with a supermarket and gourmet restaurants, the first floor dedicated to cosmetics, beauty and jewellery, the second floor dedicated to women’s apparel and accessories, the third floor dedicated to “lifestyle” including men’s fashion and gadgets, as well as golf apparel, and the last floor devoted to home and kids. Like in the Shinjuku location in Tokyo, each floor offers food and beverages, which encourages spending time in the store.

Overall, the feeling is extremely luxurious, and the highlights are the spectacular grocery store in the basement (which could easily compare to the Isetan Tokyo experience or Le Bon Marché’s Grande Epicerie in Paris) and the atrium on the ground floor (first floor), which structures the whole building.

The first floor, dedicated to cosmetics and fragrances, is beautiful but empty at the time of the visit. However, the only moment when a salesperson initiated contact was on this floor, while it did not happen at any point in any other store visited on the same day. Store execution is spectacular, and a “Café de Muse” coffee shop completes the product offering.

This overlap of food and retail is also felt at the second floor and is quite effective. However, women’s fashion offerings are toned down by the fact that brands are not visible, creating a strange experience in which the food points stand up. The same feeling takes place at the third floor where the Sushiro restaurant feels almost part of the Bang & Olufsen stand and is almost too visible, shadowing interesting spaces such as the one dedicated to golf. Finally, the fourth floor (technically the fifth as there is an intermediary floor operated by another retailer and not accessible from within the store) displays kids and home. It gives access to the McDonald’s restaurant and the cinema.

While the overall experience was clearly more luxurious than in Metro, and the effort to provide a series of food options during the visit was notable, the feeling, here again, was that this store was selling products rather than experience, questioning the very reason why one would come specifically to Isetan and not another department store.

Its Nippon competitor Takashimaya entered Singapore in 1988 when they signed a joint venture deal with real estate developer Ngee Ann Kongsi, which opened the two-towers-strong Ngee Ann City building in 1993 on what used to be a cemetery. Takashimaya occupies 37,000 sqm in Tower B and used to compete with Tangs in Tower A until it closed for poor results and was replaced by a series of luxury flagship concessions.

The store is structured according to Japanese retailers’ playbook: a basement with a Japanese supermarket and a food hall, a ground floor dedicated to cosmetics and accessories, international designers on the first floor, ladies’ and men’s apparel and accessories on the second floor, then kids on the third, and home appliances on the top floor./nbsp]

The second basement, which includes Japanese food and restaurants, was bustling when visited at 3 p.m. on a weekday, suggesting that the place is recognised as a meeting point and a landmark for locals. A selection of international and Japanese food labels completed the offering and gave a sense of elevated shopping despite the noise, excitement and intense crowd. The first basement, dedicated to homeware, home appliances and kitchenware, offered a stark contrast, as the traffic was lower and the experience poorer: just like at Metro, products are stacked rather than desirably displayed.

The first floor (ground floor) is Japanese department store retail at its best, with a series of international luxury cosmetic brands alternating closed-wall units and open ones, all surrounded at the periphery of the floor by mid-market accessories brands shop-in-shops such as Kate Spade, Coach, Bally or Marc Jacobs. Luxury names can be found on the second floor, where the likes of Bottega Veneta and Manolo Blahnik neighbour Issey Miyake, Ba&sh, Ganni and Kenzo, and regional names such as Bora Aksy and Maryling. A section was under refurbishment at the time of the visit, with Mulberry and Burberry due to open and the Hermès space temporarily relocated to the third floor.  The first floor also houses a Club 21 multi-label boutique, a legendary name in Singapore regarding fashion, with 7 locations in the city, including a second one on Orchard Road.

The third floor is dedicated to women’s and men’s fashion, accessories, a selection of tech, and luggage. The space is much more fragmented regarding retail units and feels more crowded. While the women’s section could claim to be the most agreeable experience, thanks to a mix of international brand stores (Maje, Sandro, the temporary Hermès unit), the floor felt overall rather poor in terms of experiences, with a strange floor plan, locating customer services near lingerie and men’s gadgets, and a very significant and unappealing luggage area near the escalators in a very high-traffic zone. The service area (which includes the VAT refund) works with a ticket system, and customers wait on tired seats, making the experience unappealing.

The fourth floor is dedicated to sports, kids, and restaurants. Toys are appealing (all units are branded), childrenswear does not stand out (most brands are in generic display), and the sports section is spectacular, thanks to a space operated under ‘Sports Central’. Again, some store zoning choices are questionable, such as the fitting rooms near the lifts. The shopping options are completed with the top floor offering home appliances sold by a business partner, “Best”, under different branding.

The experience at Takashimaya ranges from exciting and bustling at the food level to classical and “déjà-vu” on the ground floor and disappointing on the top floors.

The notable exception of Tangs…

Tangs, an iconic name often compared by locals to Bloomingdale’s and Selfridges, was founded by C.K. Tang, a Chinese national, in 1932 on a first location in Singapore. He was one of the first to identify the potential of Orchard Road, from an old dirt road to a major traffic magnet. He relocated there in 1950, opening his store in front of what used to be a cemetery and initiating a spectacular real estate boom in that part of the city. Today, the group also operates a 7,900 sqm unit in another mall, VivoCity, that opened in 2006 and was fully renovated in 2022.

The Orchard Road location, which spans five floors and more than 15,000 sqm, was renovated in 2012 for $35m and is currently undergoing a new set of renovations announced last July, starting with the basement. The store is modelled after the Chinese Imperial Palace and is flanked by a tower, the Tang Plaza, which was purchased in 1982 and houses a Marriott hotel.

The basement is dedicated to home, wellness and gifts, while the first floor (ground floor) accommodates beauty, the second floor women’s and kids, the third floor homeware, gadgets, tech and men’s, and the fourth floor beauty services. Food options are available across the building except for the third floor.

The basement, while not dedicated to gourmet food like in its Japanese competitors, feels very luxurious regarding how products are displayed, with an effort given to VM and product visibility. Consequently, brands seem more desirable because they have more space for expression, such as Miele or the large Dyson space in front of the escalators. The atmosphere is quiet, without music, which allows operators to diffuse promotional advertising without being too oppressive. What also stands out is the TANGS-branded space dedicated to glassware, tableware and appliances, emphasising the notion of curation and selection.

The first floor (ground floor) feels extremely luxurious and quiet during the visit, despite the passing crowd in front of the store (and even when compared to the traffic in the basement). Brands are organised by semi-closed units, creating perspectives but avoiding giving the visitor a sense of the (relatively) small surface of the store. A bakery producing croissants on site is available, and interestingly, it is completely glass-walled to allow visitors to see but avoid spreading smells in the store.

The second floor is dedicated to women and kids. Again, the presentation is extremely luxurious. Similarly to the basement, a TANGS-branded space proposes a curated offer with exclusive brands such as Suncoo or By Malene Birger. It is strategically located near the food point, allowing here again to create synergies. Messaging is all about caring for the community: wall advertising mentions that “TANGS loves local” and promotes Singaporean-based fashion.

The third floor is well executed, especially regarding homeware and beds. Some product zonings are surprising (men’s underwear is located between luggage and beds). Still, overall, the feeling of luxury remains present, even if the visitor is now on the higher floors. A large Sunglass Hut stand and an overrepresentation of luggage also stand out on this floor. The shoe concept is very coherent, and when it comes to sports, it makes it obvious that Tangs has managed to maintain its partnership with Adidas but lost Nike. A common point to the second and third floors is that Tangs seemingly focuses on mid-market brands, which are often private labels or new and unknown names when it comes to fashion.

The fourth floor is dedicated to beauty salons, including a Chanel Privé, and a “museum,” which is a wall displaying historical pictures of C.K. Tangs, his belongings, the company's history, and repeating the company’s commitment to serving the local community.

There is a clearer path towards more experience at Tangs. It does not go only through the offering of many food and beverage points but also through the expression of the retailer’s name in a very specific (and desirable) way from the point of view of the community, emphasising its local commitments and rooting, as well as real attention given to details and execution at all floors of the store. It is therefore telling that a new round of upgrades is starting to increase the level of experience during the visit even more.

…but wait, there is more!

In Singapore, department stores might not be the ones writing the future of the retail experience, as they are entangled in a competition to retail the best brands (which are otherwise tempted to go solo), in a declining market (retail sales decreased by 2.3% in July 2024 and department stores slid by -11%), where customers are strangled with inflation and ask for more promotions, while leases and rents are increasing. As a consequence, innovation is coming from unexpected places.

In the Isetan Wisma Atria mall, on Orchard Road, a bank, OCBC, has opened a remarkable space worth visiting. The OCBC space is a whole retail unit, accessible both from the atrium (connected with the food court) and the escalators, and is special in the sense that it is much more than a bank.

While customers have access to a series of ATMs at the entrance and dedicated desks for all customer tiers (from personal to private and “premier” banking), as well as a customer service desk, OCBC offers them to spend more time on-site by offering retail activities:

• A visually appealing and functional spectacular library allows people to spend time reading books. They can also purchase them, which echoes OCBC’s cultural positioning since the bank also offers to view a part of their private art collection in a gallery next to the library.
• A café is based in the library space, where customers can enjoy vegan food,
• A retail space offering sustainable and locally produced items allows to shop from a variety of categories, from tableware to gadgets or clothing,
• Finally, a sushi restaurant is also available.

Interestingly, OCBC is very clear about the notion of customer data: every credit card holder has priority over other customers for all categories and a 10% discount, while non-holders, including foreign ones, are invited to choose between either opening a bank account on the spot or simply apply to the loyalty programme. The space overall stands out in terms of experience and creates a true attraction: during the visit, many bank customers were coming from all parts of the mall to settle a bank question and stayed there, having a snack or reading a book, in a relatively quiet, relaxing and welcoming environment. Isetan owns the space: leasing it to OCBC is a smart way for a retailer with a non-productive space to rent it to a new operator, bringing a fresh perspective on the retail experience.

At the Singapore Changi airport, another approach was taken at the Jewel Airport mall to generate interest and curiosity. This mall is not just another airport mall: it was clear since its opening in 2019 that, to be profitable, the 137,000 sqm-large, $1.2 bn-worth mall should address local customers first, well before tourists: the plan involved having 60% of local customers and 40% of international ones. In 2023, footfall increased 26% over 2022, and 70% of it was from local customers. The Jewel is extremely special as a mall:

• The mall focuses on new-to-market brands, such as the first Shake Shack, Burger & Lobster, Pokemon, or Make Hero, a Japanese make-up brand, stores and restaurants.
• Also, well-known brands are invited to display a distinctive experience: Apple has developed a store centred around photography, given the picturesque, inverted fountain that has become The Jewel’s most famous picture. Bacha Coffee, a new coffee chain, has developed a truly experiential store, while Bengawan Solo, a Singapore-based bakery, has opened its largest store (out of more than 50) in the airport. Overall, local brands are invited to show off and are given prime locations in order to showcase Singapore to the world.
• The Jewel has also managed to become a landmark thanks to their Rain Vortez and Forest Valley, which have become places to visit when staying in Singapore in the same way that tourists want to come and see the world-famous Gardens by the Bay. The Jewel has become more famous than the Gardens by the Bay and Universal Studios.

In addition to these retail essentials, The Jewel offers a double reward programme through a collaboration with CapitaStars: both travelers and local residents can capitalize on points and enjoy benefits that can differ according to the population: travellers are offered early check-in, baggage storage or access to the lounge, while locals can enjoy attractions such as the Changi Experience Studio, the Canopy park, or even behind-the-scenes experiences such as Backstage, which explains how the airport works.

Singapore's department store scene on Orchard Road presents a paradoxical landscape. While the area boasts an impressive concentration of luxury retail and diverse shopping options, the department stores struggle to provide truly differentiated experiences. Despite their long-standing presence, Metro, Isetan, and Takashimaya face challenges in creating memorable shopping environments beyond their ground floors. They often fall into the trap of merely selling products rather than curating experiences, with inconsistent zoning and a lack of cohesive brand narratives throughout their multi-level spaces. Tangs emerges as a notable exception, demonstrating a clearer path towards experiential retail. Its focus on local community engagement, curated offerings, and attention to detail across all floors sets it apart. The ongoing renovations at Tangs suggest a commitment to further enhancing the customer experience.

However, the future of retail experiences in Singapore may not lie within traditional department stores. Innovative concepts like OCBC's multifunctional space in the Isetan Wisma Atria mall and The Jewel at Changi Airport are redefining customer engagement. Both sides of the same coin give access to the future: retail spaces can be redesigned to bring something new and unexpected to customers while not often having to go with a decrease in direct revenue (however, the nature of the revenue will change). In the same manner, even in a 100% concession model such as an airport, brand curation, rooting in the local ecosystem and being able to provide distinct privileges to both locals and tourists remain key to being attractive and interesting.

Department stores have always excelled at those activities, so there is no reason for them not to catch the train while it is still there. Singapore is, in that sense, the perfect reminder that, while it is possible to be swamped by the “business as usual” and the necessity to be profitable today, the mere idea of still being around tomorrow requires a strong vision and will to move the lines in a very significant manner. The path forward for department stores involves reimagining their roles as curators of unique experiences rather than mere product sellers.

Credits: IADS (Selvane Mohandas du Ménil)

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Department stores have experienced a decline in sales and prominence over the past decades. This decline is attributed to changing consumer habits and the rise of e-commerce, which has provided consumers with more convenient shopping options. Many department stores have struggled to adapt to these changes, resulting in financial difficulties and store closures. On the other hand, direct-to-consumer (DTC) brands have revolutionised the retail industry by cutting out intermediaries and selling directly to consumers. This approach has allowed some of them to offer better prices than regular brands, personalised experiences, proximity with their community of customers and greater convenience. Many global brands have also considered adopting a DTC approach to grow margins and control their image and prices without withdrawing from department stores and multi-brand retailers altogether. However, this new business model puts additional pressure on department stores. Nike is the best example of the success and limits of the DTC business model, showing how partnering with multi-brand retailers is still very much relevant and efficient.

Going DTC: the tumultuous relationship between Nike and multi-brand retailers

In this past decade, Nike has significantly transformed its distribution strategy. In 2017, the brand embarked on a DTC strategy, cutting half of its multi-brand partners by 2021. As reminded by BoF, at the time, DTC brands were top-rated by consumers and seen as a smart business model. Startups like Allbirds were expected to become unicorns on the single assumption that they wouldn’t need department stores or multi-brand retailers to reach consumers, instead recruiting them online and on social media. Shareholders and analysts celebrated Nike’s move as they saw it as a way to increase control over customer data and personalise marketing efforts. Nike's DTC strategy impacted big US names such as Sporting Goods, Dunham’s Sports, Urban Outfitters, Dillard’s, and Zappos. Nike maintained relationships with major accounts like Foot Locker and Dick’s Sporting Goods, though. However, in 2022, demonstrating complex relationships, Foot Locker reported a significant decline in its Nike inventory.

Focusing on direct sales through its ecosystem composed of its own stores, website, and app, Nike’s DTC approach was designed to strengthen customer relationships, control prices and customer data, and capture higher margins. The brand’s DTC strategy reached new heights when Nike started focusing on localised and experience-based retail concepts, such as Nike Live stores. Typically located in urban neighbourhoods, hyper localised, this small-format (from 1,000 to 3,000 square feet) retail concept was designed to provide a personalised shopping experience based on the preferences and behaviours of local NikePlus members. Nike Live stores are integrated with the Nike app, allowing customers to reserve products, access exclusive content, and enjoy seamless checkout experiences. These stores also serve as community hubs, hosting events, workshops, and training sessions. The product assortment is tailored to the local market needs, with new products often introduced to keep the selection fresh and relevant. This strategy showed success, with Nike’s DTC channels seeing strong growth. In the third quarter ending in February 2023, direct sales reached US$5.3 billion, a 17% increase year on year.

The relationship with Nike became increasingly complex for department stores, including the IADS members. The brand increased its pressure on department stores in every way possible: total withdrawal as a conclusion for a complicated business relationship, complex price negotiations, refusal to supply best-selling top-tier fashionable sneakers, and hectic and incomplete deliveries. Nike was still the world’s most valuable apparel brand in 2023, showing how popular it is and how vital it can be for department stores to carry it, especially to attract younger customers.

While it was complicated for department stores and multi-brand retailers alike, this shift was not entirely beneficial to Nike. The sportswear behemoth lost customers by pulling back from wholesale. While Nike continued to prioritise DTC, it became evident that maintaining wholesale channels was critical to reaching more consumers.

Following a more rational strategy, the brand slowly re-engaged with department stores and other wholesale partners in 2023. Macy’s CEO announced that Macy’s stores and website would resume selling Nike apparel in October 2023. Foot Locker's CEO also discussed a renewed relationship with Nike, planning for growth in their Nike business in 2024. Excess inventory issues also influenced Nike’s decision: reintegrating US retailers like DSW, Foot Locker, and Macy’s helps Nike clear over-stocks faster, making room for new products. Re-engaging with wholesale partners is even more critical at a time when more shoppers focus on essentials over discretionary products like apparel and footwear: a broad distribution becomes essential as the consumer economy tightens. Scepticism about the effectiveness of its DTC strategy also influenced Nike’s move, which aimed at stabilising and potentially growing Nike’s market presence amid a forecasted revenue decline for fiscal year 2025.

In July 2024, marking a new step in revitalising the wholesale business, Nike rehired a former executive as vice president of marketplace partners (Tom Peddie spent 30 years working for Nike, culminating as North America's vice president and general manager). Also, in October 2024, they rehired a long-time Nike Veteran, Eliott Hill, as CEO and President for his deep understanding of the industry and partners. The 2025 fiscal first quarter revenues are down 10% compared to the prior year; direct revenues are down 13%, and wholesale revenues are down 8%. Considered a Nike lifer, Hill has a big job in front of him.

The DTC’s limits

While it has limits, Nike's DTC strategy is not the only factor explaining the current headwinds the brand faces. They somehow lost their focus on products, heavily cutting on R&D. Also, they focused marketing investments on sales activations rather than on brand enhancement, providing great ROI in the short term and poor results in the long term. Finally, regarding e-commerce, Nike saw COVID-19 as the start of a new era that would forever change consumers' habits and not as the bubble it was.

Still, the DTC strategy weighs in on Nike’s performance. The brand now recognises the importance of being present wherever its consumers are, including multi-brand retailers, to maintain its market dominance. But in such a competitive market, you snooze, you lose. Nike's pulling back from wholesale prompted new brands to populate empty shelves. Multi-brand retailers had no choice but to develop relatively new competitors' presence, give them more space and communicate on their products. This explains, at least for a part, how On and Hoka boosted their sales, especially in the running categories where Nike and Adidas are traditionally dominant. Heritage brands such as New Balance, Converse and Reebok, responsible brands such as Veja, edgy brands such as Rombaut and more technical brands such as Salomon have also become increasingly successful, making department store and sports retailers’ assortments more dynamic than ever before.

The surge in comfort dressing during the pandemic also accelerated the newcomers' success. On Holding, backed by tennis star Roger Federer, and Decker Outdoors' Hoka have capitalised on this trend. For example, On Running's market share at Dick's Sporting Goods in the US jumped from 0.8% in early 2023 to 6.1% at the end of the year, while Hoka's share rose from 4.2% to 8.7% over the same period. While On and Hoka’s success is primarily attributed to their innovative designs resonating well with sneaker enthusiasts and everyday runners alike, these challenger brands pursued a pragmatic development plan and used wholesale distribution to fuel their growth. As a result, at the end of 2023, they were securing more shelf space at major US retailers, impacting Nike and Adidas's market share.

Also, when it comes to pure DTC brands, there is a limit to the number of digital transactions they can reach without having a physical presence to help them gain new customers. Besides, customer acquisition online has become way too expensive, making the DTC model less relevant. Finally, according to BMO Capital Markets, brands working DTC have not seen a relative revenue or profit margin increase. DTC brands and brands that had pivoted towards a DTC strategy should not overlook multi-brand retailers but work on the right balance between owned and wholesale channels.

Balancing DTC and wholesale

Nike's success relies on its ability to balance channels effectively, using insights from both DTC and wholesale to drive growth and stay ahead of competitors. Despite its DTC strategy, wholesale remains a significant part of Nike's sales, contributing US$25.6 billion in 2022 compared to US$18.7 billion from direct sales.

Nike's renewed focus on wholesale partnerships offers several benefits. It allows the company to leverage retailers’ store networks and tap into their existing customer bases, reaching consumers who prefer shopping in multi-brand environments. The brand’s 2023 new wholesale deals, such as those with Dick’s Sporting Goods and Zalando, are designed to be more collaborative, providing Nike with valuable customer insights and enhancing its market reach. For instance, Nike’s partnership with Dick’s Sporting Goods includes linking customers' Nike membership programme, which benefits both the retailer and Nike by sharing sales data and fostering loyalty.

Having a physical store presence is crucial for emerging DTC brands. They can use department stores to test new markets and products. By entering department stores in specific regions, brands can assess consumer interest before committing to opening their stores. This strategy allows brands to minimise financial risk, gather valuable data on shopping habits, better understand local market dynamics and test new ideas and products without significant upfront investments. Activewear brand Vuori, for example, partnered with Selfridges and Harrods in London to establish a presence before opening its own store.

Collaboration with department stores can also go in another direction. After opening their first store on London’s Regent Street in 2022, Gymshark debuted a permanent store at Selfridges in March 2024 (both in the women’s and men’s departments). Maximising visibility, the DTC brand used Selfridges rather than its own store to launch its first premium athleisure collection, ‘everywear’, with a month-long exclusivity for Selfridges. Gymshark chief brand officer said: “When we were developing […] ‘everywear’, we realised we had to launch it somewhere exciting. That’s why […] this first line will exclusively launch at the UK’s most prestigious retailer, Selfridges, both online and in-store.” Partnering with a department store like Selfridges is also a way for Gymshark to make the brand visible to tourists and develop brand awareness and appeal ahead of their second free-standing store opening in London.

Department stores traditionally attract aspirational customers, and their customer base is different from that of brands’ own stores. Brands have a unique opportunity to access different customers and leverage department store data to inform their marketing and product strategies. By understanding which products perform well with certain customer groups, brands can tailor their offerings and marketing efforts to meet consumer preferences. Brands can collaborate with department stores to create exclusive products and curated collections. These collaborations help differentiate their offerings in the competitive retail environment and attract more customers.

Many DTC brands are now embracing hybrid distribution models, selling through multiple platforms, including pop-up stores, permanent locations, wholesale partners, and their own websites. This flexibility allows them to capture and retain customers in a post-pandemic world where online growth has slowed. By forming wholesale partnerships and opening brick-and-mortar stores, DTC brands can expand their distribution and reach new customers.

As seen with Nike, the relationships between DTC-oriented brands and department stores are complex and multifaceted. By embracing hybrid models, forming partnerships, and focusing on customer experiences, brands and department stores can thrive in this new retail environment. Despite challenges, department stores continue to play a vital role in the retail landscape. Brands can leverage department store presence for market testing, getting customer data and collaborating on exclusive offerings. Department stores provide brands with a platform to reach a broad audience, which is particularly valuable for gaining brand exposure and accessing new customer bases. Being selective in their partnerships and balancing DTC and wholesale channels effectively can lead brands to sustained growth and profitability, ensuring that both channels complement rather than cannibalise each other.

Credits: IADS (Christine Montard)

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The rapid evolution of artificial intelligence (AI) technology represents a dual-edged sword for the retail and department store sectors. While AI promises to revolutionise operations, its integration into the corporate fabric demands more than mere technological upgrades—it requires a strategic alignment with each organisation's unique culture, values, and broader objectives. As data becomes the new "gold" and advances in hardware capabilities make previously inconceivable AI applications possible, retailers are presented with tremendous opportunities and significant challenges. This article looks at how department stores can effectively use AI to boost operations and support their mission while considering the financial and risk challenges involved.

Understanding the strategic importance of AI in retail

What’s your problem? 

AI in retail is more than a technology for automating operations—it addresses core business challenges through classification, creation, recommendation and regression systems. However, defining the business problem AI should answer before diving into AI implementation, whether it’s an opportunity to generate growth or reduce costs, is crucial, as a tool is here to solve an issue, not the other way around.

Retailers must consider whether AI is the most suitable solution or whether existing systems or alternatives could address the problem more effectively. AI's success standards should often be measured against current solutions rather than an ideal, flawless system. To help identify these problems, user interviews and market research become essential tools. By speaking directly with users, retailers can gain insight into what issues are most important to address. Market research can reveal existing AI systems, their uses, and how they fit within the organisation’s needs. With this knowledge, department stores can better associate AI initiatives with strategic goals, ensuring AI is both a problem-solving tool and a growth driver. Fundamentally, understanding and addressing business problems starts with recognising that AI systems are data-centric. Even the most sophisticated AI solution can fall short without accurate and sufficient data. Therefore, the planning phase of AI development should involve assessing data availability and quality to ensure the AI system’s performance meets business expectations.

A panorama of how retailers use AI so far

AI is shaking up retail, typically solving four key business problems:

• With data readiness established, the first problem AI often addresses is classification. AI’s power to organise data is a game changer. Take Sephora’s Virtual Artist1: it uses AI chatbots to classify customer queries, delivering fast, efficient responses that streamline operations and elevate service. Department stores are very advanced in using AI for their chatbots as customer queries are all very similar, making them easy to classify.
• Next is content creation, where AI’s potential truly shines. Amazon's AI-powered video ad generator for holiday marketing slashes production costs while generating high-quality, engaging ads from simple text inputs. Similarly, Depop has introduced a generative AI tool that creates product descriptions from photos, making the listing process faster and easier for users. Automating tasks like generating product descriptions, SEO metadata, and imagery for retail platforms can reduce costs by up to 90%. AI helps brands scale operations while keeping content personalised and data-driven, delivering messages that resonate with their target audiences. This approach boosts customer engagement, increases conversion rates, and further reduces production costs.2
• Recommendation systems are another AI powerhouse, as seen in Amazon’s product suggestions. These engines personalise shopping experiences based on customer behaviour, while AI-driven size recommendations reduce returns and boost confidence in online purchases. AI doesn’t just make suggestions; it is transforming the entire shopping journey.
• Finally, AI tackles regression for tasks like sales forecasting. Macy’s leverages AI to predict future trends, though forecasts based on historical data still carry risks due to market volatility.

However, beyond automating tasks, AI supercharges efficiency. Target’s AI streamlines supply chains, cutting costs and improving logistics, while Tapestry uses AI-driven insights to tailor offerings based on customer preferences. H&M and Amazon personalise customer interaction in real-time, while Google’s virtual fitting room reduces returns by showing customers how clothes fit differently on different body types. These innovations drive loyalty and repeat business. AI is not just a tool for operational efficiency; it strategically enhances customer and employee experience, drives innovation, and maintains a competitive edge, transforming organisational performance when integrated with a clear strategic vision.

Shaping AI around people, organisation, culture and purpose

Engaging employees at every level  

CEOs set the tone, but engaging employees at all levels is essential for successfully integrating AI. Education and training help ensure that everyone understands the purpose of AI initiatives and their role in the process. Without this engagement, AI initiatives may face resistance or fail to achieve their full potential. At the CEO level, strategic leadership from the CEO is crucial for successful AI integration, and the CEO must articulate a sharp vision for how AI aligns with the company’s broader goals. This top-down approach ensures that AI becomes a strategic priority, receiving the necessary support and resources to drive success. Walmart’s CEO, Doug McMillon, exemplifies initiative-taking leadership by calibrating AI initiatives with strategic business objectives, setting a solid precedent for top-level advocacy in AI adoption.

At the C-suite and executive level, AI literacy among executives is vital for successful AI integration. Executives must develop a deep understanding of AI’s capabilities and limitations to make informed decisions that coordinate AI initiatives with business goals. Target’s leadership exemplifies this commitment by investing significantly in AI education, ensuring that it supports its omnichannel strategy and enhances the customer experience across all touchpoints.

Middle managers and managers play a compelling role in AI initiatives, bridging higher management and front-line employees. At Lowe’s, AI training programs empower middle managers to critically assess where AI can be most effective and advocate for its adoption within their teams. Managers are key to the day-to-day management and operationalisation of AI initiatives, making it essential for them to be well-prepared to oversee these technologies. Companies like IKEA offer AI training programmes that empower managers to identify opportunities for AI integration within their departments while ensuring that non-AI solutions are considered when appropriate. This balanced approach ensures that AI is implemented effectively without overshadowing other valuable tools.

Regarding employees and associates, it is essential to onboard them, and bottom-up ideas should be encouraged. Front-line employees must be trained to understand how AI can enhance their roles and optimise daily operations. Proper training minimises potential resistance or misunderstandings. Starbucks, for instance, provides comprehensive training for its baristas on using AI-driven tools like the "Deep Brew" system, which helps manage inventory and personalise customer recommendations.

Infrastructure, financial considerations and strategic alignment  

To successfully integrate AI, retailers must carefully assess their infrastructure, financial resources, and long-term business goals. Whether opting for in-house AI development or third-party solutions, considerations like scalability, security, and cost-effectiveness are paramount. In-house systems offer customisation but require significant investments, while third-party solutions offer quicker implementation but need to adapt to existing infrastructure.

Precise planning is essential to avoid wasted resources and misaligned AI initiatives. Retailers must ask critical questions upfront: What outcomes are expected? What improvements are needed? Which resources are available? By tailoring AI solutions to department-specific needs, organisations can secure buy-in, align AI with strategic goals, and ensure initiatives are purposeful. Successful AI deployment requires more than technological alignment; it demands an approach that integrates with the organisation's culture, values, and objectives. Companies like Nordstrom demonstrate this by using AI in inventory management while maintaining human-centric customer service, ensuring that AI enhances, rather than replaces, the customer experience. Beyond that, companies should establish clear guidelines that define how AI is developed, used, and monitored, ensuring alignment with the company's core values. For instance, Patagonia’s integration of AI into its supply chain reflects how aligning AI with organisational values—in their case, environmental sustainability—can enhance brand integrity and customer trust. This approach allows retailers to leverage AI’s potential while fully maintaining company standards, be it consumer rights, sustainability or promoting social responsibility.

Monitoring, coordinating, and purpose-driven AI implementation 

AI implementation requires continuous monitoring and coordination across all departments to ensure that AI tools are leveraged effectively and remain uniform with the company's objectives. AI’s scale, speed, and scope can lead to unforeseen risks if not carefully managed, including reputational, economic, legal, and regulatory risks. Robust oversight ensures that AI initiatives do not become fragmented, leading to inefficiencies and lost opportunities.

Effective risk management is imperative to address these potential pitfalls. With AI’s transformative power, identifying and mitigating risks such as unfair bias, privacy violations, and cybersecurity threats from the outset and throughout the AI lifecycle is fundamental. Failure to do so can have catastrophic impacts, from reputational damage to regulatory fines. As AI technology evolves rapidly, it is necessary to build internal governance structures that actively monitor AI systems and their societal implications.

One example of purpose-driven AI implementation is Walmart’s dynamic pricing strategy, which demonstrates how aligning AI initiatives with specific business objectives can drive success. By adjusting prices in real-time based on demand and competitor pricing, Walmart optimises operational efficiency and customer satisfaction. This strategic use of AI highlights how AI solutions can be tailored to enhance business performance and customer experiences.

However, balancing AI deployment with human expertise is crucial to avoid over-reliance on technology and maintain the human touch. For instance, Best Buy uses AI for inventory management but relies on human expertise for customer interactions. This balance ensures that AI augments, rather than replaces, the human touch in customer service. Similarly, department stores must assess where AI is necessary and where human input adds unique value, thereby optimising the use of both AI and human resources.

To support effective coordination and monitoring, forming cross-departmental committees can help oversee AI deployment and integration. These committees facilitate sharing insights and best practices across departments, ensuring AI initiatives remain consistent with business strategies. As seen at JCPenney, cross-functional coordination is necessary to ensure AI projects remain aligned across departments, preventing siloed efforts and maximising value. Continuous monitoring ensures that AI systems remain transparent, explainable, and aligned with the company’s evolving objectives and societal expectations, fostering a unified approach to AI adoption.

By enhancing monitoring strategies and balancing AI and human interaction, retailers can optimise their AI implementations to meet business objectives better and adapt to evolving market conditions. This approach ensures that AI initiatives are not only practical but also sustainable and in line with the broader mission of the organisation.

AI and ethics

Fostering a responsible AI culture 

As the final critical consideration, fostering a responsible AI culture is essential. Companies should ensure that all AI deployments are conducted within the framework of the established ethical guidelines. This approach mitigates data privacy and bias risks, ensuring that AI integration across the organisation remains responsible, privacy-conscious, and parallel with the company's core values.

This begins with integrating ethical principles into AI training programs, focusing on privacy, fairness, and transparency. By doing so, organisations can ensure their AI initiatives align with legal and ethical standards while minimising risks such as data misuse. Training should teach employees how to identify and mitigate biases in AI systems while exploring AI's broader impact on social responsibility and ethical standards. By combining technical skills with moral considerations, companies ensure that AI tools are used responsibly and align with their values and compliance requirements. Real-world scenarios and case studies further help employees critically assess the ethical dimensions of AI, positioning it as a positive force within the organisation while mitigating risks such as data breaches or biased algorithms. Together, these layers of engagement form a robust foundation for successful AI integration within the organisation. Situating the entire workforce—from the CEO to front-line employees—with the company's AI vision and providing them with the necessary skills and understanding cultivates a cohesive and innovative environment. This comprehensive approach ensures that AI initiatives are implemented effectively while fostering a culture of continuous improvement and adaptability. As AI reshapes the retail landscape, this commitment to holistic employee engagement will be crucial in achieving sustained success and maintaining a competitive advantage.

Lessons from Amazon’s failed AI recruitment tool 

The need for a well-thought-out program is exemplified by Amazon’s experience with its AI recruitment tool, which was scrapped due to its inability to operate without bias. Continuous monitoring, coordination, and a clear understanding of AI’s purpose in each specific application are required to avoid similar pitfalls. Their failed AI recruitment tool is a cautionary tale of AI’s potential pitfalls. The tool developed biases against women due to flawed training data. This incident highlights the need for continuous monitoring, rigorous testing, and readiness to recalibrate or halt AI projects if they deviate from ethical standards. It also underscores the importance of incorporating diverse datasets to mitigate bias and ensure fairness in AI applications.

Incorporating AI into business operations requires strict adherence to ethical guidelines around data privacy, fairness, and transparency. AI systems must respect personal data and comply with global data protection laws, while continuous auditing helps prevent biases and ensures fairness in automated decisions.

Transparency is essential in sensitive areas like recruitment, where biased AI can cause harm, as demonstrated by Amazon’s experience. Clear communication of AI usage and constant monitoring help organisations build trust and ensure that AI solutions fit within both ethical standards and business goals.

Lessons from Patagonia’s AI privacy lawsuit 

While Patagonia has set a positive example of ethical AI integration, it now faces a class action lawsuit for alleged privacy violations involving its customer service operations. The lawsuit claims Patagonia used AI software from Talkdesk to intercept, record, and analyse customer communications without informing customers or obtaining their consent, violating California privacy laws.

This incident highlights the dual-edged nature of AI, as mentioned earlier. While AI can bring about operational efficiencies, improve customer service, etc., its misuse or lack of transparency can lead to severe legal and reputational risks, requiring organisations to manage AI cautiously and embed it within their cultural and ethical frameworks.

The key lessons from the Patagonia lawsuit are:

• Transparency and consent: organisations must disclose when AI is used in customer interactions, ensuring that customers are informed and consent to data monitoring.
• Ethical AI use: even companies with firm ethical commitments, like Patagonia, must ensure their AI tools align with privacy laws and ethical standards.
• Continuous monitoring: regular audits and strong governance are essential to ensure AI systems comply with evolving legal and ethical requirements.

Patagonia’s case serves as a reminder that AI must be implemented responsibly, balancing innovation with privacy and transparency to avoid legal risks and protect customer trust.

AI is poised to revolutionise the retail industry, offering immense potential to transform operations, enhance customer experiences, and drive innovation. However, its true impact comes when it is thoughtfully integrated into a company’s culture and aligned with strategic goals. Rather than adopting technology for its own sake, retailers must ensure that AI addresses specific business challenges, relies on reliable data, and has the support of employees at all levels. Clear leadership, continuous oversight, and adherence to ethical standards are essential for managing risks and ensuring transparency. AI’s real power lies in how carefully it’s integrated into a company’s unique culture and values rather than being hastily adopted to keep up with competitors. The key to success is implementing AI and shaping its use to reflect the organisation’s goals and mission. Before integrating AI, businesses must take a meticulous approach, ensuring it aligns with what truly matters to the organisation. This begins with fostering a culture that understands and embraces AI rather than rushing in recklessly.

AI should be seen as a tool that requires safety precautions—like a seat belt in a car—to ensure it’s used responsibly and sustainably. By taking the time to assess whether AI fits into your long-term vision and building a solid foundation, retailers can harness its transformative potential in a way that leads to lasting success as both the market and the technology evolve. This measured approach helps companies adapt to challenges and handle risks, preventing a “black box” mentality. Ultimately, the heart of the organisation must guide AI’s implementation, creating a foundation for sustainable growth and innovation.

Credits: IADS (Maya Sankoh)

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IADS recently held a meeting all about the Sportswear brands to look out for in 2024. Based on market research, IADS and NellyRodi presented a curated selection of 17 brands that are trending right now.

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

OUTDOOR

MAMMUT

Mammut is an iconic Swiss brand with over 150 years of heritage, renowned for its high-quality outdoor gear. Mammut collaborates with top athletes and influencers like Adam Ondra to promote its products. The brand is committed to sustainability, implementing various environmentally responsible initiatives in its production processes.

Check out the mammut website here

CHECK OUT mammut's INSTAGRAM

GORE-TEX

Gore-Tex is a pioneering, weatherproof technology known for its waterproof, windproof, and breathable properties. Partnering with over 400 brands like North Face and Nike, Gore-Tex is used in outdoor clothing and gear, offering unmatched durability and comfort for adventurers and professionals.

Check out the gore-tex website here

check out the gore-tex instagram here

GRAMICCI

Gramicci designs functional and comfortable clothing for adventurers and nature enthusiasts, embodying a free-spirited rock-climbing vibe inspired by California's pioneering Stonemasters. The brand integrates Japanese design influences for a unique and innovative touch, offering climbing apparel with a 90s aesthetic and vibrant colors.

Check out the gramicci website here

check out the gramicci instagram here

GOLDWIN

Goldwin offers highly designed and practical sportswear with a minimalist aesthetic and top-of-the-range features. Known for ultra technical items like the Infinium Down Jacket, capable of withstanding extreme weather at high altitudes, the brand also collaborates with innovative startups like Spiber. Goldwin's versatile and technical clothing is perfect for multiple environments, reflecting a symbiosis with nature.

Check out the GOLDWIN website here

Check out the GOLDWIN instagram here

OSTRYA

Ostrya promotes a progressive aesthetic mission, blending the fun of outdoor sports with Quebec roots. Known for its playful spirit and strong design identity, Ostrya offers versatile collections suited for both natural and urban landscapes. Ostrya's unique identity appeals to niche communities and committed outdoor enthusiasts, making every adventure more enjoyable.

check out the OSTRYA website here 

check out the OSTRYA instagram here 

ACTIVEWEAR

RAPHA

Known for stylish and refined cycling apparel and accessories, Rapha combines style and functionality with technical innovations like breathable fabrics, ergonomic cuts, and reflective details. As a partner of prestigious cycling competitions such as the Giro and Tour de France, Rapha promotes a positive and encouraging vision for maintaining a cycling routine.

Check out the RAPHA Website Here 

check out the RAPHA instagram here

LI-NING

As the second largest sneakers brand in Asia and a national favorite in China,Li-Ning combines 21st-century design with Olympic heritage. Collaborating with NBA superstars, Li-Ning showcased its fashion forward, ultra-technical "MYVERSE" collection at Paris Fashion Week, epitomizing high-end streetwear for men and women.

check out the LI-NING website here 

check out the LI-NING instagram here

WILSON

Wilson is a popular, family-friendly brand for tennis players, known for its vintage-inspired, classic athletic fit. Offering accessible prices and fostering a strong community, Wilson empowers everyone to live like an athlete. Famous for high-quality tennis rackets, balls, and shoes, Wilson has been a key player in the sports industry since 1914 and sponsors prestigious tournaments like the US Open.

check out the WILSON website here 

check out the WILSON instagram here

SATISFY

Satisfy, founded to pursue the runner's high and inspired by freedom, blends passion for running with cutting-edge fabric technology. The brand's innovative designs, like CloudMerino, provide lightweight comfort and temperature regulation. Satisfy collaborates with brands like Crocs and Oakley and fosters a global community of athletes, merging the codes of fashion with high-performance gear.

checkout the SATISFY website here 

checkout the SATISFY instagram here 

ATHLEISURE

FEAR OF GOD

Fear of God Athletics, founded by Jerry Lorenzo in 2013, incorporates affordable luxury with a sleek aesthetic. Known for its cutting-edge designs and collaborations with Nike, Vans, and Adidas, the brand blends sportswear, workwear, and streetwear. Celebrated by celebrities like Zendaya and Ja Rule, the new Adidas line showcases a couture approach to sportswear, perfected over three years for style and performance.

Check out the FEAR OF GOD website here

Check out the FEAR OF GOD instagram here

BORN LIVING YOGA

Born Living Yoga promotes an active lifestyle with seamless, eco-friendly garments made through smart production, reducing raw material consumption. The brand offers innovative and timeless products and supports a large community of yogis with coaching, tips, and talks.

Check out the BORN LIVING YOGA website here 

check out the BORN LIVING YOGA instagram here

REIGNING CHAMP

Reigning Champ embodies "Respect the Details. Master Simplicity." by blending traditional production methods with high-quality materials and manufacturing processes. The brand offers genderless, timeless, and elegant looks with a sense of luxury, using performance fabrics and innovative craftsmanship. Known for its culture of sports, Reigning Champ creates apparel that is both functional and refined.

check out the REIGNING CHAMP website here

check out the REIGNING CHAMP instagram here

NAGNATA

Nagnata celebrates women with inclusive, versatile designs that honour cultures and communities. Combining modern luxury with functional sportswear, the brand emphasizes conscious and sustainable design. Nagnata challenges industry standards, promoting sustainability beyond materials and manufacturing.

check out the NAGNATA website here

check out the NAGNATA instagram here

TECH-IPMENTS

DISTRICT VISION

District Vision develops performance eyewear and tools for athletes, suitable for cyclists, hikers, and fashion influencers. Known for technical products designed for optimal performance, the brand collaborates with names like New Balance and Suunto. District Vision combines sports and wellness, offering a burst of color in their collections and a focus on inner peace.

Check out the DISTRICT VISION website here

Check out the DISTRICT VISION instagram here 

HYPERICE

Hyperice, founded in 2015, specializes in high-performance sports recovery and injury prevention solutions. The brand offers innovative products like massage tools, vibration plates, compression garments, and cryotherapy for muscle relief and quick recovery. Partnering with top athletes and international clubs like the NFL and NBA, Hyperice empowers users to move better and live better.

Check out the HYPERICE website here 

CHECK OUT THE HYPERICE instagram here

TONAL

Tonal is a smart home gym system designed by Silicon Valley engineer Aly Orady, using electromagnetic weights to replace conventional gym equipment. It offers a compact, sleek design that makes weight training less intimidating for all fitness levels. Tonal provides technology, guidance, and community support to help users effectively reach their fitness goals.

Check out the TONAL website here

CHECK OUT THE TONAL INSTAGRAM HERE

YETI

YETI designs and distributes innovative outdoor products, from coolers to backpacks, built for diverse adventures. Their "Mapping the Gaps" campaign features ambassadors exploring unmapped trails and sharing them on Google Maps. With 200 ambassadors from 15 communities in 2023, YETI promotes high-quality, durable gear that helps customers stay out longer and explore more.

Check out the YETI website here

check out the YETI instagram here

Printable version here

Check out the pictures here

Even though the department store changed its name to Galeries Lafayette more than 30 years ago, Annecy’s1 residents kept on calling it Nouvelles Galeries. This is why Citynove (Galeries Lafayette Group’s real estate arm)2 revived the old name to develop a shopping centre around the existing department store. But its drive-to-store strategy is fully anchored in today’s retail: Citynove’s president, Eric Costa, described it as a pilot project for the group. The goal is to adapt the department store format to the local market's realities, client expectations, and competition to create an optimal environment for the stores to evolve. This approach reflects the group's strategy of owning most of its stores, allowing for easier transformation and adaptation. Considered by Galeries Lafayette as an illustration of what tomorrow’s department store could look like, the whole project aims at becoming a hybrid place where people come to shop and live. Officially completed in October 2023, here’s what the place has to offer.

A new project for a new neighbourhood

Nouvelles Galeries is part of a larger reorganisation of the city of Annecy, including the future opening of the International City of Animated Cinema, a gourmet mall, and a landscaped park. This will link Nouvelles Galeries with the city centre, bringing them closer to each other. As Eric Costa explained, “It is an important and essential operation as it is the first time Citynove has extended an existing store with new stores and then managed the shopping centre.” The extension adds 9,000 sqm to the existing 15,000 sqm store space and includes about 30 new retail units to welcome brands and services.

Also, Citynove wanted to avoid the traditional shopping centre models, aiming for a more innovative and unique retail experience: “Our objective is to move away from shopping centre uniformity, where the brands are the same everywhere. We have chosen local, passionate players and included many services and leisure options to make people want to come more often." Still, shopping remains a major reason to visit Nouvelles Galeries, so a driving force was needed besides the department store. Uniqlo was chosen to boost traffic and attract Swiss customers. This is their only store in the region, including in Switzerland, thus reinforcing the nature of Nouvelles Galeries as a retail destination.

The whole project started in 2020 and was completed in October 2023 (Galeries Lafayette refurbishment was completed in 2022). As explained by Eric Costa, “We agreed to have more emptiness (wide aisle, high ceilings, etc.) to offer spaces where people feel good, therefore losing space and profitability. The rents for local businesses are not extremely high either. We chose to spend more and have less income. A relationship-based retail model, and not just transaction-based, is the key to seeing customers return today." To bring this vision to life, architect Manuelle Gautrand was part of the shopping centre renovation. The first French architect to receive the European Architecture Prize in 2017, she was responsible for redoing the exterior of the 1969 building. Known for the famous Noma restaurant in Copenhagen, Danish architect and designer David Thulstrup was chosen to create the atmosphere of the interior street and squares of the Nouvelles Galeries, as well as the landscaped surroundings. Finally, Dutch designer Sabine Marcelis participated in the project. Named one of the eight most prominent women designers by the Financial Times, she was picked to create the interior furniture: visitors use the organic-shaped comfortable benches to relax or work on their computers thanks to the many available sockets.

Designed to be human-sized, the shopping centre is not as overwhelming as more traditional malls can be. The 30 or so stores and offerings focus on:

• Local brands: jewellery brand DupontDupont, environmentally conscious fashion brand Concrete Raw, Blømeko flower shop, and Snö cosmetic brand.
• Sports and outdoor brands (most of them are also local): Millet, Bogner, Ekosport retailer specialised in outdoor, Girls Up community store for women into sports, Les Petits Baroudeurs kids outdoor brand.
• Experience with entertainment and F&B: the Atome climbing room, open 7 days a week until 11 pm, is extremely successful. There’s also an exhibition space in the shopping centre. In terms of F&B, Biofrais organic supermarket is run by a local market gardener and was profitable from year 1. Customers can also find Shouka speciality coffee (from Chamonix), a local French pancake restaurant, a local juice bar, a local street food joint as well as a French brasserie chain restaurant and an Italian restaurant.

Other brands are available, such as fashion brands like La Petite Etoile, Yaya, a vintage clothing store, a Clarins store and more. Some stores are dedicated to rotating pop-ups to bring novelties. About ten retail units remain available for brands, including a restaurant space. A large pharmacy, a medical lab, Amazon lockers, and a kids playground have been added to the pre-existing post office to provide services to the local customers.

Building a community besides shopping requires significant marketing investments

To officially launch the project, the shopping centre doubled down on Christmas with a 360° experience to become the ‘talk of the town’. To celebrate the arrival of Uniqlo, the chosen theme was Japan. The purpose was to convey the message that, besides being a shopping centre, Nouvelles Galeries is a cultural hub including fun and unprecedented activities. To that end, hostesses dressed in kimonos welcomed visitors by inviting them to try Japanese tea. Traditional fabric wrapping, knife sharpening and Ikebana floral art workshops were organised. To attract families, the programme also included free activities designed for children: martial arts, calligraphy and kirigami (the art of paper cutting) workshops, to name a few. A photo exhibition mirroring photographs of landscapes from the Annecy region and Japan was also organised. Pianist Rieko Tsuchida gave a classical music concert, and a cosplay competition was held (playing the role of a fictional character by imitating their costume, hair, and makeup).

A complete media plan was developed to spread the word, targeting the region, including Switzerland, through billboards, press, Instagram, and a partnership with Le Bonbon (a free lifestyle newspaper with branches in Lyon and Geneva). As a result, 29 million people were reached during Christmas, and the shopping centre traffic increased by 46% compared to the previous year. Since then, and to maintain momentum, many activities have been organised throughout the year, dedicated to both adults and children, from Pilates for kids to ceramic painting.

Since the relaunch, Galeries Lafayette also doubled down on marketing and events to create female and male customer communities. They successfully organised a summer sales preview the night before the official kick-off. Partnering with a local female association, ‘Les Chic Filles’ (translating to ‘great chicks’), the soirée gathered 700 women coming to shop and have fun thanks to the various activities offered (piercing, tattoo, makeup workshops and more). The shopping spree was followed by a large dinner and dancing, for which customers were dispatched to the shopping centre’s various restaurants. The sales results were excellent, leading the store management to build a similar initiative for male customers: a sort of invitation-only club centred around food, wine and gaming. City figures, entrepreneurs and the store’s best customers are targeted and the first event will be hosted in late September 2024. Overall, marketing and CRM initiatives can be fine-tuned and tailored to specific customer groups, as 89% of the store turnover is attributed, thanks to the loyalty programme and payment card data.

The new Galeries Lafayette store: rejuvenated offer and concept

Galeries Lafayette has little local competition and a loyal consumer base, two ingredients that made the store profitable before the refurbishment. However, it lacked desirability with an outdated store concept, as is often the case in secondary cities, and a product offer that needed a refresh. The store manager ran many meetings with customers to understand their expectations: results showed they were very much attached to the store and were expecting the store to change with a premiumisation of the product offer.

Located at the centre of the mall, the store's  selling surface is 9,000 sqm divided into two floors, with two entrances on the ground floor and three on the first floor. The layout reflects customer preferences:

• Unlike usual layouts, the ground floor opens on the home department on one side (the 3rd home business of Galeries Lafayette’s owned network, excluding Haussmann). It includes furniture with AM PM and La Redoute Intérieurs (a private label), a large section dedicated to bed and bath linens, home scents, cookware and tableware.
• The other side opens on accessories (sunglasses, scarves), leather goods (with mid-range brands like Nat & Nin, Love Moschino, Vanessa Bruno, Jérôme Dreyfuss, Lancel, etc.) and the men’s department, which includes ready-to-wear and shoes.
• The men’s ready-to-wear section includes suit offerings from brands like Fursac and Boss and a large casual section from brands like Ralph Lauren, Lacoste, Timberland, Schott, etc. The Urban Galerie offers backpack options. To complete the offer, Galeries Lafayette’s multi-brand space, dubbed Creative Galerie (premium or affordable luxury brands, depending on the store), carries Play Comme des Garçons, APC, and Isabel Marant.
• Two other multi-brand spaces are at the centre of the ground floor: the Winter Galerie (with brands like Rains and Canada Goose) and the Summer Gallery (with swimwear and beachwear).
• The centre of the floor also houses jewellery and watches, cosmetics, and beauty. Leader brands (Chanel, Dior Guerlain, etc.) have corners, and the Beauty Galerie (which gathers alternative brands), a perfume shop, and a niche fragrance space complete the floor.
• Private labels are very efficiently demonstrated on both floors, in the home, women and men's departments.

The escalator and a slide are at the centre of the store, linking the 2 floors. The slide represents an entertaining initiative driving many customers in. Kids and adults alike are having fun using it, and it has recorded 3 million posts and views on TikTok, often generating a line on Saturdays. A baby foot and an arcade game are also available and attract a lot of teenagers.

The first floor gathers women’s fashion with ready-to-wear shoes with brands such as Sandro, Sessun, Soeur, Zadig & Voltaire, American Vintage, Vanessa Bruno, Tommy Hilfiger, Zapa, Jonak, Birkenstock, Doc Martens, and more. A Crush On second-hand shop-in-shop is available on top of the escalators. As for the menswear department, the space includes an Urban Galerie with Dickies, Levi’s, Carhartt, etc. and a Creative Galerie with Samsoe Samsoe, APC and more. Despite being challenged categories these days, lingerie and kidswear have been attributed to large spaces. Finally, a small gourmet store and a luggage section are available to customers. The floor is also the place for services, including a VIP lounge and personal shopping, tax-free shopping, and click & collect. The VIP lounge is also used for events and collaborations with brands (sometimes monetised) and can transform into a beauty cabin. /nbsp]

Regarding the store concept, the furniture is harmonised across the store, be it for homeware, ready-to-wear, or shoes. Brands personalise a wall of their spaces and display bits of their store concept (usually a carpet and a piece of furniture). Only Fursac, Boss, Tommy Hilfiger, Ralph Lauren and Lacoste have a fully personalised space. High ceilings, hardwood floors, large alleys, and the see-through harmonised furniture make the store feel airy and harmonious. Reminding of Annecy’s Lake tones, blue and green colours are used on walls separating spaces and brands. Arches mimicking Annecy’s architecture on the ground floor separate leather goods from jewellery and the beauty department from home offerings. Also, the red shade is used on pillars to create focus points.

Is it working?

The refurbishment brought new customers in, including more Swiss citizens than before. During the last two years, these customers increased by +40%. Overall, the store recorded a +22% growth in traffic (2024 YTD compared to 2023). The store is a destination. It accounts for around 250 staff members (including approximately 100 people from brands). The conversion rate is high: roughly 30%, with a minimal decrease explained by the traffic increase. Shopping frequency also increased. The average basket ranks 2nd in Galeries Lafayette’s network after Nice (excluding Haussmann and Champs-Elysées) thanks to cross-selling. The turnover is increasing: 2024 recorded the store’s highest turnover ever. The company is optimistic about growing more in 2025, according to plans. The store now ranks 7th in Galeries Lafayette’s owned network (excluding Haussmann and Champs-Elysées stores) compared to 9th before. The presence of Uniqlo didn’t seem to erode private label turnover, even for the cashmere group. So far, private labels posted a +23% growth between 2023 and 2024.

The transformation of the Nouvelles Galeries into a modern retail and cultural hub exemplifies a forward-thinking approach to the department store format. By reviving the historical name and integrating it into a broader urban redevelopment, Galeries Lafayette has successfully aligned its retail strategy with local cultural and economic contexts. The project has expanded the shopping options, incorporating diverse local brands, sports and outdoor offerings, and unique entertainment experiences, enhancing its appeal as a destination. The inclusion of Uniqlo and the focus on creating a unique retail experience have been pivotal in attracting local and international customers, mainly from Switzerland. The strategic use of marketing and community events has further solidified its position as a cultural hub, driving significant growth in traffic and turnover. This rejuvenated approach revitalises the store's image and sets a benchmark for future developments within the Galeries Lafayette network, showcasing the potential of blending retail with cultural and experiential elements.

Credits: IADS (Christine Montard)

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*IADS member Boyner Grup unveiled its new strategy in 2022 to establish itself as a genuine “multi-brand lifestyle company”. This came with a new approach to merchandising, including the introduction of more international brands, less reliance on private labels, the exploration of new categories, including F&B, the introduction of new types of marketing and events in Turkey, and the launch of a new store concept, in Cadde, on the Asian part of the city. We reported this new concept and its many innovations in a previous IADS Exclusive.

Since then, Boyner Grup has been relentless in its efforts to improve and expand this store concept to other locations, including the iconic Istinye Park. This commitment to innovation and improvement is a testament to the company's dedication to providing a unique and engaging retail experience. As the second major iteration of the store concept, it includes some evolutions based on the key learnings from the Cadde store, reviewed in this IADS Exclusive article.*

Introduction: about Istinye Park

Istinye Park has been a cornerstone of Istanbul's retail landscape since its inception in 2007. Spanning an impressive 242,000 sqm, with 85,000 sqm dedicated to retail space, this mixed-use complex houses 280 stores, including a comprehensive array of luxury and fashion brands. Its strategic location near Maslak, Istanbul's primary business district, and several universities makes it a magnet for both middle-class consumers and affluent shoppers. This positioning has likely contributed to Istinye Park's superior turnover performance compared to the newer Zorlu Center, located in another part of Istanbul. This mixed-use complex opened in 2013 with 200 stores, various F&B concepts, and the Raffles Istanbul Hotel.

The visitor experience at Istinye Park is notably distinct and arguably more captivating. The complex is anchored by a stunning rotunda lined with luxury boutiques, creating an immediate sense of opulence upon entry. Like Zorlu, Istinye Park incorporates a residential component spanning 190,000 sqm, which provides with a valuable repeat clientele. As the pioneer in introducing an actual luxury mall experience to Istanbul, Istinye Park has cemented its prestigious image in residents' minds.

The complex is composed of three main elements:

• The Grand Rotunda: Designed as a central entertainment hub, this four-level arena-like space is crowned by a 78-meter-diameter hard-shell canopy supported by a central exterior mast over three panoramic elevators. Adding to its allure, the Rotunda features kinetic water sculptures animated with lights and music.
• The Lifestyle Centre: This open-air town square incorporates a verdant central park and a fashion district housed in a glass-roofed indoor retail area.
• The Bazaar: This section stands out with its historical Turkish styling. Each facade draws inspiration from Turkish architecture and history, offering a unique blend of modern retail and cultural heritage.

Sustainability has been a core principle of Istinye Park since its inception. The complex boasts automatic energy-saving systems, dedicated trash collection centres, and an overall design that minimises its energy footprint.

Istinye Park is home to Turkey's three premier department store chains: Beymen, Boyner, and Vakko. While Boyner is the only one accessible from the mall's ground floor, Beymen and Vakko can also be reached from the open-air first-floor section and are, therefore, more visible at first glance.

The Cadde store concept’s initial pillars

The Cadde store, Boyner's pioneering concept, was built on four key pillars:

• Sustainability: Eco-designed store with energy and water-saving systems, customer-centric services like garment recycling points, and innovative features such as pedal-powered phone chargers. The assortment was carefully curated with sustainability in mind.
• Integrated art: Impressive installations and purchasable art pieces seamlessly blended into the store environment.
• Cutting-edge technology: Anamorphic screens adorning the façade and a colossal display stretching from the basement to the top floor.
• Revolutionary merchandising: Prominence given to international brands over private labels, Instagram-worthy product displays, strategically placed rest areas, and dining spots like Costa Coffee at the entrance.

These innovations yielded impressive results: a 27% higher average ticket than the Boyner network average and increased dwell time from 30 minutes to an hour.

The Istinye Park store: an evolution rather than a revolution

The second store concept iteration at Istinye Park, builds on the lessons learned and activates the pillars differently, as the 6,000 sqm store was refurbished entirely.

Firstly, the integration of art, mixed with an efficient store design, remains a key component of the store. It is cleverly used on the ground floor store frontage, as the store is located relatively far from the atrium escalators and behind a Starbucks, making visibility critical. To ensure the store is noticeable, a giant interactive piece of art, “Flip Dot Display”, mirroring what is happening in front of it like a glittering screen, creates surprise and amusement.

This is placed next to a series of large entrances, providing a clear view of the entire store. Perspectives have been meticulously designed, giving an overall impression of a neat, curated store with eye-catching elements while providing a clear understanding of the space organisation. The floors are well-designed, and the simple yet effective furniture allows for easy brand name changes.

The entry leads immediately to the women's section, which showcases Turkish art pieces from a selection of 10 artists supported by Boyner, labelled and sold next to international brands like Karl Lagerfeld, Desigual, Marks & Spencer, and Turkish local labels. Visual merchandising, another pillar of the concept, is striking: every piece in the women's section is well-presented, Instagram-friendly, and well-lit (although lights tend to focus on entire zones and sometimes don't highlight specific products).

The swimwear and resort wear section is also visually attractive, distinct from the ready-to-wear section, and located near the fitting rooms. The transition to accessories and shoes is almost seamless, with bags on impressive shelves equipped with screens and shoes in cleverly designed circular spaces for easy try-on, including mirrors. Interestingly, accessories are located at the back of the store, while one might expect to see shoes in that part. Zoning is not strict: some shelves mix shoes and bags, giving an overall impression of constant and playful discovery. However, while the ready-to-wear section is airy and spacious, knowing where to look in the shoes and accessories zone is challenging due to the numerous visual stimuli.

Drawing inspiration from the Cadde store, the centre of the floor has been designed to provide a breathing space between areas and a reason to sit, with a Costa Coffee (a franchise owned by Boyner Grup) implemented right in the middle of the store, flanked by a small luggage stand and some designer home equipment. Its brilliant location next to the kids' area is attractive: it gives reasons for children to ask for ice cream or for parents waiting for their spouses to sip a coffee while choosing kids' wear.

The kid's wear section itself is highly colourful and attractive. However, it's not visually separated from the rest of the store except for the floor and ceiling, suggesting that the zoning here is temporary (no specific furniture or branding is used). Another smart F&B integration is the Bubble Tea bar between the kids' section and the cosmetics one, just next to the Ala Nail Art nail bar. Everything is designed to capture customers' attention and time. This makes it even more surprising that the cosmetics area is relatively standard visually, contrasting with the rest of the store.

While the store concept is evident throughout the fashion section, it seems absent in cosmetics, where individual brands dominate with their codes. A similar approach was taken at Cadde because 100% of the cosmetics section brands operate in concession while Boyner purchases on other terms for other categories. While this economic system explains the situation, it unfortunately results in a visual discrepancy between the cosmetics section and the rest of the store.

Vertically navigating the store is not easy: only one escalator allows access to the first sub-level, which displays the men's, sportswear, and accessories categories, arriving directly in the semi-formal section with brands such as Boyner Business or Brooks Brothers (a surprising decision given the young and fresh feeling from the women's section: are customers shopping at Boyner that different in terms of expectations according to their gender?).

The feeling is distinct from upstairs on that floor (which is also connected to the mall through a large entrance directly onto the food court). While the men's concept is on display everywhere, it's a bit simpler than the women's section, potentially due to a different positioning. This difference in display wasn't as noticeable in the Cadde store, which also played more on gender fluidity, not visible at all in the Istinye Park store.

A customisation atelier is in the centre of the men's space but physically separated, giving the impression of a cabin with specialists inside who should not be disturbed. The store's playful aspect is present, but unlike in Cadde, it's somewhat less inviting and spontaneous.

Cash desks in the men's section are also very different in aesthetics from the women’s ones. They are lined with impulse-purchase or necessity products, such as underwear, socks, and belts, which somewhat downgrade the experience.

The highly dynamic sportswear section uses screens abundantly, creating a vibrant feeling. It also opens to a staircase leading down to a new store concept, the Boyner Dynamic Teen concept, located on the two floors below, currently only accessible through the escalator. However, a mall entrance will be implemented in the future. Overall, the Boyner Dynamic Teen is a compelling and exciting space that sells sport-related goods to kids and teens, including spaces where products can be tried (such as a tennis cabin). However, it was empty during the visit, given that it had just opened and the other entrance was not yet available.

Istinye Park: Boyner's retail laboratory

Boyner's latest venture in Istinye Park demonstrates a laser focus on profit maximisation. Initially tested in Cadde, the store concept has been refined and streamlined, discarding underperforming elements to create a retail powerhouse tailored to this upscale mall. The strategy is paying off handsomely; Boyner reports that early results are outpacing those of Cadde at a comparable stage, relatively speaking.

Key elements amplified in this iteration include:

1. Art as a subtle beacon: While less prominent than in Cadde stores, artistic elements still serve as attention-grabbing focal points.
2. Visual merchandising excellence: The womenswear section stands out with its impeccable presentation. Each item is meticulously displayed, optimised for social media appeal, and thoughtfully illuminated. This attention to detail extends to the sportswear and Boyner Dynamic Teen sections. The large, open layout facilitates seamless category transitions, creating an uninterrupted visual journey for shoppers.
3. Strategic customer comfort zones: Boyner Grup-owned F&B stands are cleverly integrated throughout the store. These rest areas enhance the shopping experience and retain profits within the company. This integration goes far beyond what was attempted in Cadde stores.
4. Embracing innovation: While perhaps less playful than its Cadde counterpart, Istinye Park still incorporates key innovative features. The "mobile Pass Kasa" - a mobile cash desk enabling on-the-spot payment and packaging - exemplifies this commitment to cutting-edge retail technology. Similarly, customers have access to kiosks that deliver information about stock status, content, price, and product reviews. An “Inspiration wall” even allows customers to get recommendations according to the selection they make on the video screen.

Looking ahead: Tersane flagship

Boyner's next flagship project is slated for Tersane, a sprawling 242,000 sqm mixed-use development on the Golden Horn, currently nearing completion. This new iteration will likely address some of Istinye Park's structural limitations:

• Istinye Park's layout somewhat hampers cross-floor traffic, particularly between the women's and men's sections. The relative isolation of the men's floor and Boyner Dynamic Teen areas marks this store as more of a prototype than a final concept.
• The cosmetics section, while reflective of specific brand relationships, feels disconnected from the overall store aesthetic. Observing how Boyner evolves this space in the Tersane flagship will be crucial.
• Private Label strategy: Istinye Park showcases recently developed private labels like the outdoor brand Discovery Expedition, or more established ones such as Fabrika. However, these in-house brands don't receive the same prominent positioning as other IADS members like Falabella or El Corte Inglés do. Consequently, they do not stand out and international brands are more visible. Whether Boyner will adopt a more assertive approach to private label promotion in future iterations remains to be seen.

As Boyner continues to refine its retail formula, the Tersane flagship promises to be a fascinating case study in department store evolution.

*Boyner's journey from Cadde to Istinye Park, and soon to Tersane, illustrates the dynamic evolution of retail concepts in response to market demands and location-specific opportunities. The Istinye Park store represents a refined iteration of Boyner's innovative approach, balancing profitability with customer experience. As the retail landscape shifts, Boyner's upcoming Tersane flagship presents an opportunity to address current limitations and further innovate.

Key areas to watch include:

1. How Boyner will tackle cross-floor navigation and section integration.
2. The evolution of the cosmetics section's visual alignment with the overall store concept.
3. Potential changes in private label strategy and positioning.

Moreover, Boyner's ongoing experiments with store concepts raise broader questions about the future of department stores in an increasingly digital age. How will other retailers respond to these innovations? And how might these evolving concepts shape consumer expectations and behaviours in the long term?

As Boyner continues refining its approach, its strategies may offer valuable insights for the wider retail industry, potentially influencing the direction of global department store evolution*

Credits: IADS (Selvane Mohandas du Ménil)