What: GenAI is reshaping Black Friday shopping behavior, with 38% of global consumers leveraging AI tools to hunt for deals and make informed purchase decisions across nine countries.

Why it is important: This trend highlights the growing sophistication of consumer shopping strategies, as shoppers leverage AI tools to maximize value during promotional periods, compelling retailers to evolve their pricing and promotional approaches.

A comprehensive BCG survey spanning nine countries across Europe, North America and Australasia reveals a significant shift in holiday shopping behavior, with GenAI emerging as a crucial tool for deal-hunting consumers. The study shows that 38% of shoppers have either already used or plan to use GenAI during major sales events like Black Friday, Cyber Monday, and Singles' Day.

Consumers are primarily utilizing AI to locate optimal deals, conduct product research, and compare different items. Some are even employing it for more sophisticated tasks such as generating shopping lists and brainstorming budget-conscious gift ideas. The positive reception is notable, with 80% of users finding the technology helpful and nearly 40% planning to increase their usage. This trend is particularly pronounced among younger consumers. With shoppers planning to spend a minimum of GBP 310 during sales events, retailers must adapt their strategies to meet these tech-savvy consumers' expectations, particularly as ongoing cost-of-living concerns drive increased interest in discounts.

IADS Notes: The BCG survey's findings about GenAI adoption in Black Friday shopping align with broader industry trends observed throughout 2024. As noted in March 2024, Adobe's research revealed that 58% of consumers were already embracing AI-enhanced shopping experiences, setting the stage for the current holiday season's shopping patterns. This consumer openness to AI has prompted major retailers to respond decisively, as evidenced in October 2024 when Walmart launched its innovative AI-powered personalized homepage initiative.

The economic context is particularly significant, with retailers adopting sophisticated AI pricing strategies in November 2024 to navigate inflation pressures, directly addressing the cost-of-living concerns highlighted in the BCG survey. This technological shift represents more than just a temporary trend; as observed in January 2024, it marks a fundamental paradigm shift in retail, where AI is reshaping everything from consumer behavior to operational strategies, suggesting that the 38% of consumers currently using GenAI for holiday shopping may be just the beginning of a broader transformation in retail.

Smart shoppers embrace AI for Black Friday bargain hunting

What: Research by YouGov and Motorola Solutions showed that 41% of retail workers are worried about their safety during the festive rush amid rising retail crime.

Why it is important: These concerns are amplified as holiday season approaches when shops are busier, stay open later, and may be understaffed.

Petty theft was the most common crime as 56% of retail workers said they or their store has experienced this in the last 12 months. The report also found that 51% witnessed or experienced a hostile customer interaction, 31% have encountered organised retail crime gangs, and 15% of workers have been victims of or witnessed a physical attack on a colleague.

In the survey, the role of technology emerged as integral to improving safety as 67% said video cameras have been installed in stores, 30% use two-way radios, and 25% said body cameras have been used to improve safety. When asked which technologies would make workers feel safer, a wearable or mounted panic alarm topped the list. Body cameras and video security cameras completed the top three.

Four in 10 retail workers are worried about their safety during the festive season

What: New industry report examines department stores' transformation strategies, finding that retailers are balancing data-driven decision-making with traditional intuition while prioritising customer engagement and strategic brand partnerships.

Why it is important: This comprehensive analysis reveals the complex balance retailers must strike between modernisation and tradition, while addressing critical operational inefficiencies that impact profitability and growth.

NuOrder by Lightspeed's research, based on insights from senior retail leaders at major department stores like Saks Fifth Avenue and Nordstrom, reveals the sector's key challenges and opportunities. The study, conducted between July and August 2024, gathered responses from executives in fashion (44%), luxury (25%), and beauty sectors, all representing companies with revenues exceeding GBP 38 million. The findings emphasise three primary focus areas: improving customer engagement, streamlining operations, and optimising product assortments. While personalisation is recognised as crucial, supply chain innovations show more immediate impact on profitability. The research highlights how retailers are combining AI-driven forecasting with traditional methods, though many still struggle with product data management and inventory optimisation. The UK Treasury's plans to increase business rates on large distribution warehouses, aiming to support high street shops, adds another dimension to the sector's transformation efforts.

IADS Notes: The NuOrder by Lightspeed report aligns with broader department store transformation trends observed throughout 2024. UK department stores' survival strategies, as seen in January 2024, emphasise creating unique shopping experiences, while the beauty sector's transformation demonstrates successful category innovation. The introduction of tech-driven retail concepts on Oxford Street reflects the industry's push toward digital integration, supporting NuOrder's findings about technological adoption. This evolution mirrors broader transformation strategies documented in May 2024, highlighting the need for physical retail reinvention. The World Department Store Summit insights confirm the importance of merging digital capabilities with physical experiences, while innovative features in luxury department stores showcase how retailers are successfully implementing these strategies. These developments collectively validate the report's emphasis on enhancing customer experiences while addressing operational inefficiencies through strategic partnerships and technological innovation.

NuOrder’s report on the state of department stores

What: Despite COP29's shortcomings, fashion's unique position across multiple sectors presents an unprecedented opportunity to drive environmental change through industry-led initiatives.

Why it is important: With 60% of consumers showing increased climate concern and major retailers committing billions to sustainability initiatives, the industry's cross-sector influence can drive meaningful environmental change beyond its own footprint.

The fashion industry's response to COP29's disappointing outcomes in Azerbaijan highlights a crucial moment for sector-led climate action. While the UN summit, hosted in an oil-rich nation, failed to secure strong climate financing commitments, fashion's notable absence from the event speaks to a broader industry shift towards independent action. Industry leaders argue that waiting for global mandates is no longer viable, particularly given fashion's unique position to influence change across multiple sectors.The industry's interconnection with agriculture, water systems, and renewable energy creates opportunities for meaningful impact. Lewis Perkins, president of the Apparel Impact Institute, emphasises fashion's potential to create collaborative blueprints for change that extend beyond its own footprint. However, this potential remains largely untapped, with experts noting a disconnect between urgent climate needs and industry action.The challenge lies in transforming rhetoric into action, particularly in supporting Global South suppliers who face the greatest climate impacts. The industry's cultural capital and storytelling capabilities could be powerful tools for driving collective action, provided companies move beyond mere commitments to meaningful implementation.

IADS Notes: The fashion industry's response to COP29's disappointment reflects a broader pattern of industry adaptation identified in recent reports. As noted in November 2024, the BoF-McKinsey State of Fashion report emphasises that brands must act decisively on sustainability despite economic uncertainty, while the Transformers Foundation highlights the persistent exclusion of Global South suppliers from key sustainability decisions. The industry's potential for leadership is demonstrated by Neiman Marcus's achievements in October 2024, exceeding emission reduction targets ahead of schedule. This contrasts with Bain & Company's September 2024 findings that while 60% of consumers show increased climate concern, there's hesitation to pay premiums for sustainable products. These insights suggest that rather than waiting for global climate summits to drive change, the fashion industry has both the capability and responsibility to lead through direct action and inclusive collaboration.

The COP flop: What the failure of the world’s biggest climate summit means for fashion

What: Brands like Valentino Beauty, Shiseido, and Vogue are integrating metaverse technologies such as virtual and augmented reality, smart mirrors, and immersive screens into physical retail spaces to create more engaging and memorable experiences.

Why it is important: This blend of physical and digital elements helps brands overcome the limitations of purely virtual experiences, increasing dwell time, brand engagement, and conversion rates, while catering to consumers' desire for in-person interactions.

This approach can also be applied to department stores, enabling them to offer interactive and immersive sections across various product categories. In a post-pandemic shift, metaverse technologies are enhancing customer experiences. Valentino Beauty used a smart mirror at a New York pop-up to allow visitors to digitally try on lipstick, attracting 1,500 people over two days and boosting sales. Shiseido's 360-degree pod at Macy’s Herald Square transported customers to Japan to experience the Future Solution LX product line, combining physical sensations with virtual reality. Vogue is set to unveil an immersive exhibit, "Inventing the Runway," which will take visitors through a 50-minute archival runway journey using massive video projections. These hybrid experiences are designed to be accessible and engaging, requiring no prior familiarity with new technologies. These initiatives highlight the importance of in-person connections and shared experiences. By mixing physical and digital elements, brands can create richer, more memorable experiences that cater to consumers' nostalgia for simpler, offline interactions while leveraging advanced technologie

Why the metaverse is moving into physical retail

What: Thailand is rapidly becoming a key player in the global luxury retail market, driven by major developments like the USD 3.2 billion One Bangkok project and a booming domestic demand for high-end goods.

Why it is important: Thailand's strategic location, growing ultra-high-net-worth population, and ambitious tourism goals are positioning the country as a leading hub for luxury consumption in Southeast Asia, attracting both international brands and affluent shoppers.

Thailand is emerging as a significant luxury retail destination, with developments like the One Bangkok project, which features Thailand's first high-street-style luxury boulevard, and expansions in existing malls such as Siam Paragon and IconSiam. The country's luxury market is expected to grow at a compound annual growth rate (CAGR) of 9 percent, reaching USD 3.6 billion by 2029. While international tourists play a crucial role in driving sales, there has been notable growth in domestic demand from affluent Thais and expatriates. Additionally, Thailand’s ultra-high-net-worth individual (UHNWI) population is projected to increase by 14.7 percent by 2028. The rise of Thai celebrities on the global stage is also boosting the country’s appeal as a luxury shopping destination.

Thailand’s rise as a luxury retail powerhouse

What: In a new report, Transformers Foundation claims that suppliers are being sidelined within collective initiatives.

Why it is important: Multi-Stakeholder Initiatives must include supplier engagement to make the process fair and inclusive.

The report found that suppliers face resource constraints that hinder their participation in collective activities. In comparison, the report argues, brands and retailers often have large teams and dedicated finances to engage and have the upper hand in decision-making processes. For suppliers in the Global South in particular, there are cultural biases and logistical hurdles that inhibit their participation — ranging from inconvenient meeting schedules to racism and a lack of diverse representation. In essence, suppliers feel disconnected and burnt out from what the industry has labelled ‘collective processes’. This means they also feel absent from how strategic solutions are developed, which is limiting the entire sector’s sustainability agenda.

The report focused on voluntary multi-stakeholder initiatives (MSIs), which are central to fashion’s sustainability progress and are usually created to solve complex global challenges, ideally by fostering collaboration. But by sidelining suppliers, change only serves brands and retailers. The authors argue for a fairer process than what the industry has relied on, and outline what that could look like.

Suppliers are still being excluded from fashion’s sustainability decisions

What: Department store foot traffic analysis reveals predictable seasonal patterns and varying performance across brands, with Nordstrom and Nordstrom Rack showing solid YoY growth of 1.4% and 5.0% respectively in Q3 2024, while Macy's and Bloomingdale's outperform the broader category.

Why it is important: The analysis reveals how department stores are navigating post-pandemic recovery through varied strategies, with performance metrics indicating the success of different approaches to format optimisation and customer engagement.

Analysis of department store visit patterns reveals consistent seasonal trends, with major spikes during key shopping periods like Valentine's Day, Mother's Day, and back-to-school season, before peaking during Black Friday week and pre-Christmas. Nordstrom's performance has been particularly notable, with both its traditional stores and Rack format showing sustained growth since April 2024. The off-price Rack division, currently in expansion mode, has outperformed traditional stores through September, though this trend slightly reversed in October. Similarly, Macy's and Bloomingdale's have shown resilience, with Bloomingdale's achieving slight YoY increases in Q2 and Q3 2024. Despite broader category challenges, these retailers appear well-positioned for the holiday season, with historical data suggesting significant upcoming foot traffic increases. The success of varied formats and strategies indicates the sector's ability to adapt to changing consumer preferences while maintaining traditional seasonal strengths.

IADS Notes: The latest foot traffic data aligns with broader department store transformation trends observed throughout 2024. AI-driven insights from November 2024 show Nordstrom and Nordstrom Rack achieving positive year-over-year growth of 1.4% and 5.0% respectively, though this contrasts with the broader sector's holiday season challenges noted in December 2023. The success of off-price formats is particularly evident, as shown by Nordstrom Rack's continued outperformance of traditional stores. This trend occurs amid significant strategic shifts, with Macy's "Bold New Chapter" transformation plan demonstrating how major players are adapting their formats and operations. Coresight Research's analysis reveals changing consumer preferences driving these adaptations, while WWD's industry overview highlights the importance of balancing traditional retail strengths with modern innovations. These developments collectively suggest a sector actively evolving its business model while leveraging seasonal patterns to maintain market relevance.

Checking in with department stores: Nordstrom and Macy’s

What: Euromonitor’s Top Global Consumer Trends 2025 Report analyses consumer trends across sectors.

Why it is important: The new report outlines insights for evolving lifestyle habits and purchase motivations among consumers.

Key insights:

• Loyalty programmes: 48% of brands incorporated experiential rewards in their loyalty programmes as of Q2 2024. 3 in 5 millenials paid for a loyalty programme subscription in 2024 compared with half of generation Z and less than one third of baby boomers.

• Brands: Private label brands across several consumer goods sectors saw some of the largest retail sales gains compared with other category players in recent years.

• Sustainability: 63% of consumers tried to have a positive impact on the environment through their everyday actions. 5 million number of online SKUs with sustainability claims across 11 FMCG industries and 25 countries as of Q2 2024.

• Attention and artificial intelligence: 67% of consumers looked for ways to simplify their lives in 2024. 52% of consumers said ease of use was the reason they used a digital wallet in the past year. 42% of consumers made purchases via livestreaming because product or service features were easier to understand through this channel. 65% of professionals said their company plans to invest in generative AI in the next five years.

• Beauty and personal care: Retail sales growth of premium goods outpaces mass alternatives. 46% of online beauty and personal care products used a sustainability claim in 2023— the highest share of digital shelf among industries.

• Health: A new view of ageing is on the rise. People don’t just want to live longer (lifespan); they want to feel better for longer (healthspan). There has been a consistent increase in the usage of smart devices or apps to track fitness and health across generations, especially Gen Z and millenials.

• Personal finance: 57% of consumers extensively researched the products and services they consumed in 2024. Only 18% said they often made impulse purchases in 2024.

Top global consumer trends 2025

What: Target Corporation's strategic response to excess inventory through multi-channel adjustments and supply chain modifications showcases the complexity of balancing stock levels against rising holding costs in today's retail environment.

Why it is important: This strategic shift illustrates how major retailers are leveraging advanced technologies and supply chain modifications to address the estimated 4.5% revenue loss from inventory inefficiencies while maintaining customer satisfaction.

Target's inventory management transformation, initiated in June 2022, represents a comprehensive approach to addressing post-pandemic inventory challenges. The company implemented multiple strategies, including aggressive markdowns to accelerate inventory sell-through, holding stock further upstream to pool demand, and collaborating with vendors to cancel orders and reduce lead times. This multi-pronged strategy successfully laid the groundwork for their 2023 recovery, according to CEO Brian Cornell. However, the company's recent earnings miss, partially attributed to accelerated imports ahead of potential port strikes, demonstrates the ongoing challenges of inventory management. The situation reflects a broader industry trend, with U.S. retailers experiencing a 12% increase in average days on hand since 2021. The complexity is compounded by rising costs, including a 40% increase in interest rates since 2021, record-high warehouse rents, and a 13% increase in warehouse labor rates, making the cost of holding excess inventory increasingly burdensome for retailers.

IADS Notes: Recent analysis from March 2024 reveals retailers face average revenue losses of 4.5% due to inventory inefficiencies. The industry's response has increasingly focused on AI-powered tools for enhanced merchandise planning and demand forecasting, with research showing potential working capital reductions of 10-20% through effective implementation. These technological solutions are particularly crucial as retailers work to overcome operational silos and implement comprehensive inventory management strategies.

The hidden costs of excess inventory

What: BCG's AI Maturity Matrix reveals only five economies are fully AI-ready, highlighting urgent need for global retail industry transformation as AI spending projected to reach USD 632 billion by 2028.

Why it is important: This comprehensive assessment of 73 economies' AI readiness provides crucial insights for retail industry investments, market entry strategies, and technological infrastructure development, while identifying critical gaps in global AI preparedness that could impact retail transformation.

BCG's groundbreaking AI Maturity Matrix assessment of 73 global economies reveals a stark divide in AI readiness, with only five nations - Canada, Mainland China, Singapore, the UK, and the US - achieving pioneer status. The study introduces the ASPIRE framework, evaluating economies across six crucial dimensions: Ambition, Skills, Policy and regulation, Investment, Research and innovation, and Ecosystem. The findings show that over 70% of assessed economies score below the halfway mark in critical areas such as ecosystem participation, skills, and R&D. The research projects worldwide AI spending to reach USD 632 billion by 2028, indicating massive transformation potential. The matrix identifies six distinct adoption archetypes, from AI pioneers to emergents, providing a comprehensive roadmap for economic development and technological integration. This stratification has significant implications for global retail operations, market entry strategies, and technological investment decisions, particularly as economies work to bridge the gap between AI exposure and readiness.

IADS Notes:

Recent retail industry developments align closely with BCG's findings. In October 2024, Walmart's implementation of AI-powered personalised homepages  exemplified how AI pioneers are leveraging their technological advantage. This mirrors the broader industry transformation noted in January 2024, where retail entered a new paradigm with three significant trends: Perceptive AI, Consumer Guardianship, and Eco-Stewardship . The economic impact is substantial, with global online retail sales projected to reach USD 6.8 trillion by 2028. The competitive landscape continues to evolve, as evidenced by emerging market dynamics in Southeast Asia  and Chinese brands moving from low-cost to premium products. These developments underscore BCG's assertion that AI readiness will increasingly determine economic competitiveness and market leadership.

BCG report: The AI Maturity Matrix

70% of economies are underprepared for AI Disruption, BCG Press Release

What: With a new mobile-only shopping platform, Amazon is leaning into haul culture in what’s widely seen as a bid to compete with Shein and Temu.

Why it is important: Social media hauls are widely credited with accelerating the rise of both ultra-fast fashion and a culture of overconsumption driven by low-cost, high volume shopping.

The platform, launched in beta, sells products including fashion with “ultra-low prices”. The model is largely similar to Shein and Temu - ship products directly from China with typical delivery times of one to two weeks. This will also allow Amazon to make use of the ‘de minimus’ shipping regulation that allows companies to ship packages valued at less than USD 800 into the US duty-free and with less scrutiny from customs.

Amazon says that it will continue to focus on its goal of net-zero carbon emissions by 2040. It reported reaching its goal of 100 per cent renewable energy, seven years ahead of its 2030 target; that includes global operations such as energy-intensive data centres, but not supply chain (Scope 3) emissions — which is where most of a garment’s carbon footprint is generated.

Amazon confirms fashion hauls aren’t going anywhere

What: Stakeholders disagree on how much of the secondhand clothing that’s imported to the Global South is waste.

Why it is important: Experts say it’s distracting from the underlying issue of overproduction.

In recent years, varying estimates have circulated around the world for how much of the secondhand clothing imported into countries in the Global South is not fit for reuse or resale — ranging from 1 to 40%. The higher estimates are contested by export companies and trade associations.

The problem is that textile recycling, in this context, is regarded by experts as a misnomer. What these companies and organisations more accurately do is sort and export used textiles. And what’s really at risk of failing, say experts, is the business model that the export sector has depended on for decades: sell en masse to countries with thriving secondhand markets, where buyers purchase clothing bales sight unseen, and hope that what is inside will generate them a profit.

While this model seemed to work for a long time, export companies are starting to feel threatened by the growing negative publicity around the waste that critics say the secondhand trade is responsible for in the Global South — and because they’re worried about the implications of forthcoming legislation including extended producer responsibility (EPR).

Researchers and analysts say that by maintaining a narrative that textile resale and recycling are in crisis, the secondhand clothing industry is keeping attention off the real problem:  overproduction, and the fact that nearly limitless volumes of low-quality clothes cannot be repurposed on a planet with limited places to put them and limited people to wear them.

The secondhand market is imploding. Who is responsible?

What: Rising costs, shifting trade policies, and geopolitical tensions are pushing fashion brands to diversify their sourcing strategies, moving away from China and exploring nearshoring and alternative Asian markets like India and Vietnam.

Why it is important: As global trade dynamics evolve, fashion companies must adapt to maintain supply chain resilience, reduce costs, and meet sustainability targets, all while navigating increasing trade restrictions and rising labour costs.

The BoF-McKinsey State of Fashion 2025 report highlights how fashion brands are rethinking their global sourcing strategies amid rising costs, evolving trade policies, and geopolitical shifts. The US and Europe are diversifying away from China, with imports from the country dropping significantly between 2019 and 2023. Markets like India, Vietnam, and Bangladesh are emerging as key sourcing hubs due to lower labour costs. Nearshoring is also gaining traction, with regions like Latin America for the US and Turkey for Europe becoming important alternatives. The report underscores the need for fashion executives to regularly assess their sourcing footprint, develop strategic relationships with suppliers, and collaborate on sustainability goals. These shifts aim to build more resilient supply chains that can adapt to future disruptions while meeting cost-efficiency and environmental targets.

How fashion is shaking up its global sourcing strategies

What: Global luxury spending is expected to remain flat at nearly EUR 1.5 trillion in 2024, with minimal growth as consumers shift focus from products to experiences.

Why it is important: This trend signals a shift in consumer priorities, compelling luxury brands to adapt by focusing on personalised experiences and creativity to retain their customer base, especially among younger consumers.

A report by Bain & Company and Altagamma forecasts that global luxury spending will reach nearly EUR 1.5 trillion in 2024, showing little growth compared to 2023. This stagnation is attributed to consumers prioritising luxury experiences such as travel and wellness over traditional luxury goods. The personal luxury goods market is expected to shrink by 2%, marking its first slowdown since the Great Recession (excluding the COVID-19 period), largely driven by economic uncertainty and rising prices. Generation Z's reduced advocacy for luxury brands has contributed to a shrinking customer base, with 50 million fewer consumers over the past two years. While certain segments like beauty and eyewear are performing well, overall demand for discretionary items has decreased. The outlet channel has gained popularity as consumers seek value purchases, while online sales are stabilising after post-pandemic fluctuations. Regionally, the US, Japan, and parts of Europe are seeing positive trends, but China and Canada are experiencing slowdowns. Emerging markets like Latin America and India are expected to add significant numbers of new luxury consumers by 2030. To navigate these challenges, brands must focus on creativity, personalisation, and leveraging technology to enhance customer experiences. The long-term outlook remains positive, with potential growth beyond 2024 depending on macroeconomic conditions.

Bain & Company report: global luxury sales to drop by 2% in 2024, one of the weakest years on record

What: Which? research reveals 92% of Black Friday deals were cheaper or identically priced at other times of the year, exposing widespread misleading pricing practices among major UK retailers.

Why it is important: As retailers invest heavily in AI-powered pricing systems and consumers embrace technology for price comparison, this investigation underscores the urgent need for more honest and transparent promotional practices in the retail sector.

Which? has uncovered significant concerns about Black Friday pricing practices among major retailers. Their investigation of 227 products during last year's Black Friday fortnight revealed that 92% of deals from eight prominent home and tech retailers were available at the same price or cheaper at other times. The research particularly scrutinised the credibility of "was" prices used to demonstrate supposed savings, finding that in 60% of cases, the higher price was in place less than half the time during the previous year. Most concerning were 14 instances where the higher reference price had never been charged by the retailer in the preceding 12 months. Specific examples included a Remington hair dryer at Boots advertised with a 62% discount from a price never actually charged, and a Garmin smartwatch at John Lewis with an inflated reference price. The investigation marks the first time that every analysed deal was available for the same price or less at other times, with approximately 40% being cheaper outside the Black Friday period.

IADS Notes: The Which? investigation into Black Friday pricing practices comes at a crucial time when retailers are fundamentally transforming their promotional strategies. As revealed in November 2024, John Lewis's successful implementation of AI-powered price matching represents a shift toward more transparent and technology-driven pricing approaches. This contrasts sharply with the misleading practices exposed by Which?, where 92% of deals were available at the same price or cheaper at other times. The retail industry's increasing adoption of AI-driven pricing strategies, as reported in October 2024 , suggests a move away from traditional blanket discounts toward more sophisticated, data-driven promotional approaches. This evolution is particularly significant as consumers themselves become more tech-savvy, with BCG's November 2024 research showing 38% of shoppers now using AI tools to verify deals . This changing dynamic, combined with the previous year's global average discount rate of 27% , indicates that retailers must balance competitive pricing with transparent practices to maintain consumer trust and market position.

Nine in 10 Black Friday ‘deals’ cheaper or same price at other times of the year

What: The report outlines AI’s pivotal role in optimising companies’ merchandising strategies, such as their assortment planning and demand forecasting strategies.

Why it is important: Coresight Research estimates that retailers lose 4.5% of their gross sales annually due to in-store inefficiencies, underlining key merchandising shortfalls in modern retail operations.

The report focuses on four main usages of AI for retail merchandising:

• the role of AI across key business functions,

• demand forecasting and how to use AI and data-driven insights to respond to demand,

• assortment and allocation planning using AI that analyses data into hyper-localised inventory insights,

• and using AI for precise, efficient inventory replenishment.

AI for Merchandising: Applications, Implementation and Benefits

What: The fashion industry is expected to face a challenging 2025, marked by economic uncertainty, shifting consumer behaviours, and the need for brands to adapt to ongoing global changes.

Why it is important: As the industry grapples with sluggish growth, geopolitical instability, and evolving consumer priorities, brands that can pivot quickly, especially in areas like sustainability, supply chains, and customer engagement, will be better positioned to succeed.

The "State of Fashion 2025" report by Business of Fashion and McKinsey highlights the turbulent path ahead for the fashion industry. Economic uncertainty, geopolitical instability, and changing consumer preferences are expected to create significant challenges. Growth will remain sluggish, with non-luxury segments driving economic profit for the first time in years. Key trends include the rise of AI-powered product discovery, a focus on older consumers (the "Silver Generation"), and a shift towards value-driven shopping behaviours. Brands must also navigate disruptions in global trade, particularly in Asia, where markets like India and Japan are emerging as new growth engines. Sustainability remains a critical issue, though consumer reluctance to pay more for eco-friendly products complicates efforts. The report underscores the need for agile supply chains and improved inventory management to meet both regulatory demands and consumer expectations. Ultimately, brands that can innovate and differentiate themselves will be best positioned to thrive amidst these challenges.

BoF and McKinsey unveil fashion’s 2025 roadmap

What: Organisations that master both AI and organisational learning gain unprecedented advantages in managing retail uncertainty and complexity.

Why it is important: "With retailers losing 4.5% of gross sales due to inefficiencies, and only 15% of organisations effectively combining AI with organisational learning, this represents both an urgent challenge and massive opportunity for the retail industry.

The MIT/BCG study reveals a critical transformation in how organisations learn and adapt through AI integration. While only 15% of organisations qualify as "Augmented Learners," these leaders demonstrate significantly better capabilities in managing uncertainty and driving performance. The research shows that companies combining organisational learning with AI-specific learning are 1.6 to 2.2 times more likely to effectively manage various types of uncertainties.

The study emphasises three key areas of enhancement: knowledge capture, synthesis, and dissemination, with particular focus on how AI can transform tacit knowledge into actionable insights. Organisations must simultaneously improve both organisational and AI-specific learning capabilities, choosing projects that promote exploration over mere efficiency gains. The findings highlight the importance of responsible learning practices, ensuring that knowledge capture and dissemination align with established learning principles and values.

IADS Notes: Recent retail industry data powerfully demonstrates the article's findings about the transformative potential of combined AI and organisational learning capabilities. A June 2024 study revealed that the retail sector is leading AI deployment across industries, with nearly half of retailers already seeing increased revenue from their AI initiatives. However, a November 2024 report highlighted that retailers still lose 4.5% of gross sales due to inefficiencies, underscoring the vast potential for improvement. Success stories showcase the impact of effective implementation: Walmart processed 850 million data points to enhance their product catalog quality, while The Mall Group achieved 30-45% increases in email engagement rates by combining GenAI with machine learning.

BCG report: Learning to manage uncertainty with AI

What: A retail technology pioneer is revolutionizing merchandise planning by replacing traditional Excel-based systems with AI-powered solutions that enhance profitability and operational efficiency.

Why it is important: This evolution in retail technology marks a pivotal advancement in how retailers approach inventory management and demand forecasting, offering a solution to the widespread challenge of operational silos and inefficient planning processes.

7thonline's journey from a wholesale planning tool startup to a global leader in omnichannel merchandise solutions exemplifies the transformation of retail technology. The company has evolved by integrating advanced data science with over 25 years of business expertise, serving major brands like Patagonia and Calvin Klein. The company's mission extends beyond mere efficiency improvements, aiming to create time for innovation by freeing retail professionals from manual processes. Their platform leverages AI and machine learning to revolutionize merchandise planning and allocation, with a particular focus on breaking down operational silos and enhancing cross-channel inventory planning. The technology enables granular, real-time demand insights at the SKU level for each store location and selling week, helping businesses align inventory with localised demand. Their success is evidenced by clients achieving ROI within the first year, demonstrating the tangible benefits of replacing traditional Excel-based systems with sophisticated AI-driven solutions.

IADS Notes: The retail industry's urgent need for digital transformation is highlighted by Coresight Research's findings in November 2024, revealing that retailers lose 4.5% of gross sales due to merchandising inefficiencies . This aligns with 7thonline's mission, as October 2024 research demonstrates how AI-powered demand forecasting is delivering significant improvements in speed and accuracy . The market's trajectory supports this direction, with the global retail pricing optimization software market projected to reach USD 1.6 billion in 2024 , indicating strong demand for solutions that can effectively integrate AI into retail planning and operations.

How fashion is shaking up its global sourcing strategies

What: Bain's research identifies five design principles for deploying generative AI in the customer journey.

Why it is important: Retail customers are optimistic about generative AI: about half of those surveyed see great potential in these new tools.

Customers value passive generative AI features such as summarising reviews integrated into their journeys—sometimes even more than they value standalone generative AI features. Online shoppers understand the potential for personalisation with generative AI, and they seem more willing to share personal data than they might in other contexts. In retail, generative AI can help deliver great customer service more efficiently, especially in parts of the journey that have proven more difficult to reach.

Generative AI’s Potential to Improve Customer Experience

printable version

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)

PRINTABLE VERSION HERE

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