What:

Retail media has evolved from an e-commerce add-on to a £4 billion strategic imperative, driven by retailers' ability to leverage first-party data and provide measurable advertising impact from impression to purchase.

Why it is important:

This transformation represents a fundamental shift in retail business models, where data monetization and advertising capabilities are becoming essential revenue streams, potentially doubling retail margins from 1.7% to 4.3%.

The retail media sector has emerged as a dynamic force in the advertising economy, projected to capture 10% of total UK advertising spend by 2025. This growth is primarily driven by retailers' sophisticated use of first-party data, particularly from loyalty programmes and transaction histories, enabling unprecedented precision in targeting and measurement. The technology evolution has made customer data more accessible and actionable for brand partners, allowing them to connect advertising directly to purchase decisions. For FMCG brands facing increased scrutiny of marketing budgets, retail media's ability to track campaigns from impression to purchase provides concrete ROI measurements previously unavailable. The sector's maturation is evident in retailers establishing dedicated business units and expanding beyond their owned digital properties to activate data across broader digital ecosystems. This comprehensive approach, combining physical and digital touchpoints with precise measurement capabilities, is creating stronger, data-driven relationships throughout the retail value chain.

IADS Notes:

The retail media landscape has undergone significant transformation throughout 2024-2025. In July 2024, Coresight research revealed retail media's potential to double retailers' margins from 1.7% to 4.3%, sparking increased industry interest. By October 2024, Retail Week reported major retailers like Boots and Co-op expanding their media networks, while John Lewis partnered with Dunnhumby to launch a real-time customer insight platform. The evolution accelerated in February 2025, when Forbes reported retail media spending was set to increase by $10 billion, though highlighting measurement challenges with brands managing an average of six retail networks. March 2025 saw Simon Property Group introduce sophisticated data capabilities leveraging two billion customer interactions, demonstrating how traditional retail operators were evolving into media network providers. By June 2025, BCG's analysis showed how leading retailers were achieving superior performance through data-driven platforms, while Retail Detail detailed Delhaize's success in standardizing measurement approaches, achieving 74% brand lift and 8.5% sales growth in case studies. This transformation culminated in July 2025 with John Lewis's expansion beyond owned websites to streaming services, exemplifying how retailers are moving from simple advertising platforms to sophisticated media networks integrating both physical and digital touchpoints.

From browsing to buying: the quiet power of retail media

What: Ikea pursues comprehensive 'real zero' carbon emissions strategy through operational transformation and infrastructure investment, moving beyond traditional offset-based approaches.

Why it is important: The shift from offset-dependent strategies to comprehensive operational changes provides a blueprint for retailers seeking to achieve meaningful environmental impact while driving business innovation.

Ikea is pioneering a transformative approach to sustainability by pursuing 'real zero' carbon emissions across its entire business operations. Rather than relying on carbon offsets, the global furniture giant is implementing fundamental changes throughout its value chain. The company has achieved 100% renewable electricity usage in its Australian stores, while over 70% of its delivery fleet now produces zero emissions. Lauren Sinfield, public affairs and advocacy lead at Ikea Australia & New Zealand, emphasizes the company's long-term mindset in embedding sustainability across all business aspects. The Marsden Park distribution centre exemplifies this commitment through its solar and battery project, demonstrating how logistics hubs can evolve from cost centres to sustainability assets. While the company faces challenges in regional zones where infrastructure gaps remain, its transparent approach to disclosure and climate governance, including reviewing 252 industry associations for climate alignment, sets new standards for retail sector transformation.

IADS Notes: Ikea's 'real zero' strategy exemplifies the evolving approach to retail sustainability observed throughout 2024-2025. As highlighted in Harvard Business Review's May 2025 analysis, successful retailers are moving beyond scattered environmental initiatives to implement focused, comprehensive strategies. This aligns with February 2025 data showing 47% of companies integrating sustainability into product development, while Euromonitor's research revealed 63% of consumers actively seeking environmental impact through purchases. The approach mirrors successful transformations seen in September 2024, when major retailers like Central Retail committed to net-zero emissions through practical operational changes. Ikea's transparent communication about regional challenges, particularly in delivery infrastructure, reflects the industry-wide response to March 2025's EU sustainability directives (CSRD, CSDDD, and ESPR), which demand comprehensive environmental reporting and due diligence. The company's investment in facilities like the Marsden Park distribution centre parallels Falabella's May 2025 strategy, demonstrating how infrastructure transformation can support both environmental goals and operational efficiency.

What retailers can learn from Ikea’s ‘real zero’ climate strategy

What: Research reveals retail CEOs are missing major growth opportunities by limiting AI to efficiency-focused improvements rather than pursuing transformative business model innovation.

Why it is important: With 87% of early AI adopters experiencing revenue increases of 6% or more, retailers who fail to think boldly about AI transformation risk falling behind competitors who are reimagining their entire business models.

Summary: The retail industry stands at a critical juncture in AI adoption, where success depends on CEOs' willingness to move beyond incremental improvements and reimagine their entire business model. While many organizations have deployed AI tools for automation and efficiency gains, only 10% successfully scale their applications to achieve transformative results. The most successful retailers are using AI to reshape core functions and create innovative new products, achieving up to 4.5% annual productivity growth compared to the industry's decade-long 0.3% rate. This transformation requires CEOs to personally lead innovation, creating focused teams and supporting blue-sky thinking while maintaining a portfolio approach to AI initiatives. The article emphasizes that success comes from viewing AI not just as a tool for optimization but as a catalyst for reinventing how value is created and delivered to customers.

IADS Notes: Recent retail developments validate the urgency of transformative AI leadership. In March 2025, data revealed that while 84% of retail executives planned increased AI investment, only 10% successfully scaled their applications. By June 2025, top-quartile retailers embracing comprehensive transformation were outperforming industry five-year TSR by 7 percentage points through integrated approaches. The stakes are particularly high as McKinsey's February 2025 report showed 71% of consumers now demanding personalized interactions. Success stories like L'Oréal's Beauty Genius demonstrate how bold AI initiatives can create entirely new value propositions, reaching over 10 million consumers and driving 30-70% higher engagement rates than traditional approaches.

CEOs aren’t thinking big enough with AI

What: European consumer spending shows signs of recovery in Q2-2025, with UK SMI reaching 101.3 and Eurozone rising to 97.4, driven by weather effects and shifting seasonal patterns.

Why it is important: This recovery signals a significant shift in European retail dynamics, where external factors like weather and seasonal events are increasingly influential in shaping consumer behavior and retail performance.

Consumer spending across Europe demonstrated encouraging momentum in the second quarter of 2025, with both the UK and Eurozone showing signs of improvement. The UK's Spending Momentum Index reached 101.3, indicating expansion compared to the previous year, with discretionary spending rising significantly by 5.2 points to 106.4 and non-discretionary spending increasing by 3.4 points to 102.2. The Eurozone, while still below the expansion threshold, showed positive movement with the SMI rising 2.6 points to 97.4. This improvement was particularly evident in non-discretionary spending, which increased by 3.6 points to 101.2, driven by a notable 8.7-point surge in April. Record-breaking heat across Europe during April influenced shopping patterns, prompting early seasonal purchases in categories such as garden furniture and summer apparel. The timing of Easter and school holidays further contributed to the quarter's performance, especially affecting food, travel, and leisure categories.

IADS Notes: The Q2-2025 improvement in consumer spending momentum aligns with broader retail trends observed across Europe. As reported in June 2025, BCG's analysis showed 40% of consumers maintaining optimism despite economic pressures, while the National Retail Federation's forecast of 2.7-3.7% growth for 2025 confirms the gradual recovery. The significant impact of April's record-breaking heat on seasonal retail parallels earlier observations from 2024 about weather's increasing influence on shopping patterns. Regional variations remain pronounced, with French department stores showing resilience at 1.7% growth in January 2025, while the UK's May 2025 performance revealed a complex picture with food sales rising 3.6% against non-food's 1.1% decline. The contrast between discretionary and non-discretionary spending reflects June 2025 findings showing 73% of European consumers adapting to higher prices, though premium segments maintain strength. These patterns, combined with the calendar effects noted in February 2025's French retail analysis showing a 13% decline in traditional sales periods, demonstrate how seasonal and environmental factors are reshaping European retail dynamics.

Europe Spending Momentum Index

What: The Mobley v. Workday lawsuit exposes how AI-driven hiring tools can perpetuate discrimination against minorities and people with disabilities through inherited biases in training data.

Why it is important: As retail companies increasingly adopt AI for recruitment, this case reveals the urgent need to balance technological efficiency with ethical considerations and proper validation of hiring algorithms.

Summary: The Mobley v. Workday lawsuit highlights a critical flaw in AI-driven hiring systems: their tendency to perpetuate discrimination through biased training data. The case centres on systematic rejection of candidates from protected groups, revealing how negative online content and skewed narratives become embedded in AI decision-making processes. Research shows that negative content about disability and employment spreads more widely than positive stories, creating a visibility problem that affects AI training. This bias manifests in concerning ways, such as AI systems downgrading résumés containing disability-related awards. The lawsuit challenges the common assumption that recruitment technology ensures equal treatment, exposing how features like "ideal" résumé cloning can reinforce existing biases rather than correct them. This case serves as a crucial warning about the risks of implementing AI hiring tools without proper validation and oversight mechanisms.

IADS Notes: Recent retail industry developments underscore the complexity of AI implementation in hiring. In March 2025, research showed AI-enabled teams reduced work time by 16% while maintaining performance quality, yet only 10% of retailers successfully scaled their AI applications. The Mobley v. Workday case, certified as a nationwide collective action in June 2025, highlights the risks of unchecked AI hiring systems, particularly in discriminating against protected groups. However, success stories demonstrate the potential: companies implementing systematic inclusion strategies achieve 21% higher returns, while those combining organizational learning with AI implementation are 1.6 to 2.2 times more effective at managing uncertainties, suggesting that balanced human-AI approaches yield the best results.

Biased by design: How AI reinforces hiring discrimination

What: Luxury brands reduce price increases to 3% in 2025, marking the slowest rise since 2019 as wealthy consumers resist aggressive pricing strategies.

Why it is important: This pricing adjustment signals a fundamental shift in luxury retail dynamics, reflecting the industry's first significant contraction in 15 years and the loss of 50 million consumers, forcing brands to recalibrate their market approach.

Luxury brands are implementing their smallest price increases since 2019, with an average rise of just 3% between January and May 2025. This marked slowdown from the 8% peak in 2022 reflects growing resistance from wealthy consumers and signals a potential return to pre-pandemic pricing patterns. Major brands like Louis Vuitton and Chanel, which had significantly raised prices between 2019 and 2023, are now facing pushback from clients who are increasingly price-conscious despite their wealth. The impact is particularly evident in specific products, such as Louis Vuitton's Speedy bags, which doubled in price since 2019, and Chanel's large flap bag, which increased by more than 80%. This shift comes as the industry grapples with multiple challenges, including US tariff threats and regional conflicts. While some brands like Hermès and Richemont's jewellery brands show resilience, others face significant headwinds, with LVMH expecting a 3% decline in second-quarter sales and Kering forecasting a 13% drop.

IADS Notes: The luxury market's pricing reset in 2025 aligns with broader industry transformations observed throughout 2024-2025. February 2025 data revealed the sector's first significant contraction in 15 years, with a 2% decline to €363 billion and the loss of 50 million consumers over two years. By December 2024, major brands had begun introducing products under $500 to retain middle-class consumers, while April 2025 showed varying impacts across companies, with LVMH reporting a 2% decline while Kering faced a steeper 14% drop. The Chinese market's 18-20% decline in January 2025 particularly influenced this strategic shift, forcing brands to reconsider their pricing approaches across different markets.

Luxury brands ease off on price rises as shoppers push back

What: Retailers are implementing interactive shelf technology that combines real-time pricing updates, product information access, and customer engagement features to revolutionize the in-store experience.

Why it is important: This technological evolution addresses the dual challenge of maintaining physical retail relevance while meeting modern consumer expectations for seamless, digital-first experiences, as evidenced by recent data showing 96% of consumers still favouring in-store shopping.

The transformation of physical retail spaces is gaining momentum as stores adapt to evolving consumer expectations. Smart electronic shelf labels are emerging as a cornerstone of this evolution, offering more than simple price displays. These interactive systems enable instant price updates and provide customers with detailed product information, nutritional values, and real-time reviews directly at the shelf. This technology streamlines the shopping experience by eliminating the need for multiple touchpoints while building customer trust through transparency. For retailers, the implementation of these systems provides unprecedented access to actionable data, allowing for dynamic adjustment of product placement and promotions based on actual customer behaviour. European supermarkets are already demonstrating the technology's potential, optimizing shelf layouts and reducing waste through automated discount systems for products approaching expiration dates. This systematic approach to retail space management represents a fundamental shift toward more agile, responsive, and customer-centric operations.

IADS Notes: Recent retail technology implementations demonstrate the accelerating pace of digital transformation in physical stores. In January 2025, smart store technologies achieved 98% inventory accuracy through RFID integration, while March 2025 data showed 87% of retailers implementing AI reported revenue increases of 6% or more. The trend toward interactive technology is further validated by February 2025 research indicating that 71% of consumers now expect personalized interactions. However, implementation challenges remain significant, with June 2025 data showing only 10% of retailers successfully scaling their AI applications. Despite these challenges, the industry's commitment to innovation is evident, with retailers investing £1.8bn in smart technology to enhance shopping experiences while maintaining the human element that 96% of consumers still value in physical stores.

Shelves that inform and interact: physical commerce is reinventing itself

What: The Bicester Collection has transformed luxury outlet retail by embedding local culture, sensory experiences, and thoughtful design into its village concepts across global markets.

Why it is important: The success of this model has influenced the broader luxury retail sector, sparking a wave of investment in experiential retail spaces and demonstrating how careful attention to local context and customer experience can drive sustained growth.

The Bicester Collection's thirty-year journey exemplifies how physical retail can evolve beyond traditional commerce into immersive destinations. From its modest beginnings with 13 boutiques in 1995, Bicester Village has grown into one of the world's most successful retail locations, where visitors spend an average of six hours exploring carefully curated environments. The Collection's approach to experience isn't merely superficial; it's built into the foundation of each location through thoughtful design, botanical elements, and cultural sensitivity. Each village, from Spain's La Roca to China's Suzhou Village, reflects its local identity whilst maintaining the brand's core philosophy of creating spaces that feel cared for and authentic. The recent launch of Belmont Park Village in New York demonstrates this commitment to localisation, offering a bolder, metropolitan interpretation of the concept for American audiences. This careful balance of global standards with local nuance has transformed outlet shopping from a purely transactional experience into a cultural destination, proving that when physical retail prioritises emotion and atmosphere, it creates lasting connections with visitors.

IADS Notes: The Bicester Collection's success aligns with significant retail developments throughout 2024-2025. Value Retail reported double-digit growth in June 2025, projecting 50 million visitors across its locations. This success has influenced major industry moves, including Simon Property Group's acquisition of The Mall Luxury Outlets in January 2025 and L Catterton's £600 million investment in Value Retail in September 2024. The model's effectiveness is further validated by broader industry trends, as seen in British Land's successful Broadgate development and LuxExperience's strategic transformation in May 2025, confirming the viability of combining local authenticity with global luxury appeal.

Built to feel: How the Bicester Collection became a benchmark for experiential retail

What: David Jones and Marks & Spencer form a wholesale partnership for lingerie and sleepwear, testing a new approach to British retail expansion in Australia after historical failures by UK department stores.

Why it is important: This strategic move illustrates how retailers are learning from past market entry failures, choosing targeted product categories and established local partners to minimise risks while testing new markets.

Marks & Spencer's latest venture into the Australian market through David Jones represents a carefully calculated approach to international expansion. The exclusive partnership, focusing initially on lingerie and sleepwear, marks a significant departure from M&S's previous direct retail operations that ended in 2001. This strategic shift acknowledges the complexities of the Australian market, where both Debenhams and John Lewis have previously struggled to establish successful operations. The partnership leverages David Jones' established presence and local market knowledge while allowing M&S to test and refine its offering. However, potential challenges remain, including the alignment of M&S's value-for-money positioning with David Jones' premium department store status, seasonal differences, and supply chain considerations. The collaboration's success will depend on effectively managing these challenges while delivering a compelling product range that resonates with Australian consumers.

IADS Notes: The timing of Marks & Spencer's partnership with David Jones reflects broader shifts in the Australian retail landscape. In February 2025, Australian department stores embarked on significant transformation strategies, with David Jones focusing on consolidation and omnichannel innovation to combat digital disruption. This evolution in the Australian market coincides with M&S's own retail journey; in November 2024, the British retailer demonstrated strong domestic fashion performance but faced challenges internationally, explaining their strategic choice of a wholesale partnership model over direct operations. This cautious approach aligns with successful global department store transformations observed in April 2025, where retailers like Selfridges and Harrods proved that traditional operators could thrive through strategic partnerships and experiential retail. The M&S-David Jones collaboration thus represents a calculated response to past failures in the Australian market, leveraging David Jones' local expertise while maintaining M&S's brand integrity.

M&S, Debenhams, John Lewis: Why British retailers struggle to crack Australia

What: Consumer trust in retailers erodes as 63% of Americans believe companies are exploiting economic conditions to boost profits amid tariff-driven price increases.

Why it is important: As retailers face $640 billion in additional import costs, the erosion of consumer trust threatens to fundamentally alter shopping patterns and brand relationships in an already challenging market.

Recent surveys reveal a growing rift between consumers and retailers over pricing practices in the current economic climate. According to the Harris Poll's study of 2,000 adult Americans, 63% believe companies are taking advantage of economic conditions to increase profits. Furthermore, 62% of consumers suspect businesses are simultaneously raising prices while lowering product quality, creating a significant threat to brand loyalty. This skepticism comes as consumers attempt to reconcile official inflation reports with their personal shopping experiences, supported by Harvard Business School's Pricing Lab data showing increasing prices across both imported and domestic goods. The Federal Reserve Bank of New York reports that 75% of manufacturers have begun passing through tariff costs to consumers, with nearly one-third transferring all associated costs. Experts advise businesses to adopt transparent pricing strategies and consider absorbing some tariff costs to maintain customer trust and loyalty during this period of economic uncertainty.

IADS Notes: The current consumer skepticism about retail pricing strategies reflects broader market tensions observed throughout 2025. In July 2025, major retailers like Macy's implemented varying price increases, with footwear seeing rises of up to 4.2%, demonstrating the challenge of balancing cost absorption with profitability. This followed May 2025's dramatic drop in consumer confidence, where 63% of Americans believed companies were exploiting economic conditions for profit. The concern is well-founded, as April 2025 data showed projected price increases of 1-1.5%, with lower-income households facing potential 2.3% drops in disposable income. BCG's March 2025 analysis revealed staggering additional import costs of $640 billion, forcing retailers to fundamentally restructure their pricing strategies. The situation has created a trust deficit, with February 2025 data showing 62% of consumers expressing serious concern about rising retail prices, suggesting a potential long-term impact on brand loyalty and shopping behavior.

Retailers in the crosshairs over tariff-driven price hikes

PRINTABLE VERSION HERE

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

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

Four examples of how shared capitalism works

John Lewis Partnership

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

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

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

Walmart stock purchase plan

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

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

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

Système U federation

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

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

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

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

REI co-op

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

The benefits of the models

For companies: business longevity, improved performance

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

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

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

For employees: profit sharing

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

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

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

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

Customer benefits: the specific case of REI

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

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

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

Challenges and limitations of shared capitalism

Financial and other pressures

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

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

Low employee engagement

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

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

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

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

Credits: IADS (Christine Montard)

What: New UK regulations transform BNPL services from unregulated payment options to formally supervised financial products, requiring affordability checks and enhanced consumer protections.

Why it is important: As retailers increasingly integrate BNPL services into both online and physical stores, these regulations establish crucial guidelines for responsible lending while maintaining payment flexibility.

The UK government's decision to bring Buy Now Pay Later providers under Financial Conduct Authority supervision from June 2025 marks a watershed moment for retail finance. This regulatory framework mandates affordability checks, clearer customer information, and proper complaint channels, addressing concerns about the sector's rapid growth. Recent figures indicate that one in eight UK adults now use BNPL services, often for essential purchases like groceries and household bills. The regulation aims to protect consumers from potentially unmanageable debt while maintaining the benefits of payment flexibility. The challenge lies in balancing the seamless customer experience that made BNPL popular with responsible lending practices. The new requirements will particularly impact younger consumers and families who have increasingly relied on these services during the cost-of-living crisis. This shift represents a broader evolution in retail finance, where transparency and consumer protection are becoming as crucial as convenience.

IADS Notes: The retail payment landscape has undergone significant transformation, as evidenced by Klarna's expansion into physical retail in September 2024 and John Lewis's adoption of BNPL in November 2024. Research from May 2025 reveals concerning trends, with Klarna reporting a 17% increase in credit defaults. This regulatory intervention comes as Imperial College Business School's November 2024 study showed BNPL services increase consumer spending by 10% while raising financial vulnerability concerns. The timing is particularly relevant as major retailers like Debenhams and Walmart have recently launched or expanded their BNPL offerings in March 2025.

The fine print era: Rethinking retail finance

PRINTABLE VERSION HERE

Check out the photos of IKEA Oxford Street

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

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

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

Experimentation: how IKEA is prototyping the city-centre store

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

i : Ingka operates 90% of Ikea stores globally.

Credits: IADS (Christine Montard)

PRINTABLE VERSION HERE

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

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

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

Why audio, why now?

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

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

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

The attention deficit in retail

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

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

Why podcasts work

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

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

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

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

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

Retailers already on air : Department stores and frontline voices

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

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

Building the podcast – The IADS workflow

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

From page to prompt

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

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

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

Vocal authenticity through AI

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

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

Editing, packaging, and distribution

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

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

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

Human-centric AI and the sound of storytelling

AI simulating human rapport

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

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

Cloning voices, not people

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

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

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

Designing for emotional intimacy

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

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

What this means for retailers

Retailers as publishers

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

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

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

Starting small, learning fast

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

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

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

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

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

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

Credits: IADS (Maya Sankoh)

What: European retail sector faces unprecedented transformation pressure with 17% of companies needing significant change and 6% requiring restructuring, putting USD 300 billion in GDP and 3.5 million jobs at risk.

Why it is important: This widespread need for transformation reflects deeper structural changes in consumer behaviour and market dynamics, with 54% of Europeans expressing economic pessimism and significant shifts towards digital channels, forcing retailers to fundamentally rethink their business models.

BCG's third annual Transform and Special Situations Index reveals significant pressures across the European retail landscape, with 17% of companies requiring transformation and 6% facing severe restructuring needs. This comprehensive analysis of 1,700 publicly held European companies identifies vulnerabilities that could impact more than USD 300 billion in GDP and 3.5 million jobs. Whilst inflation and interest rates show modest improvement across the continent, with bankruptcy rates stabilising at a 10% increase compared to the previous year's 28%, significant challenges persist. Germany emerges as the market facing the most elevated restructuring risk, whilst Italy and the Nordics experience heightened transformation pressure. The UK and France show signs of stabilisation, though sectoral challenges remain. The analysis emphasises the need for companies to implement strategic transformation levers, including strengthening revenue footprints, optimising supply chains, and leveraging innovation as a strategic engine to ensure long-term resilience in an evolving retail landscape.

IADS Notes:Recent market analyses from June 2025 confirm the report's findings, with the European retail sector reaching its highest distress level since 2009 . This aligns with observed consumer behaviour shifts, as 54% of Europeans express economic pessimism . The transformation is particularly evident in channel performance, with online fashion retail growing 14.6% whilst physical stores declined 2.7% in March 2025 . Department stores have shown resilience with 5.8% growth , demonstrating how different retail formats are adapting to these pressures through strategic transformation.

The $300 billion reason why CEOs in Europe need to focus on transformation

Transformation and special situations index - Full presentation

BCG Transform & Special Situations Index 2025 - Europe

BCG Transform & Special Situations Index 2025 - UK

BCG Transform & Special Situations Index 2025 - France

BCG Transform & Special Situations Index 2025 - Nordics

BCG Transform & Special Situations Index 2025 - Germany, Austria, Switzerland

BCG Transform & Special Situations Index 2025 - Italy

What: UN Women's latest report identifies flexible work arrangements as essential for achieving gender equality, with half of women citing flexibility as crucial for remaining in the workforce and addressing the threefold disparity in unpaid care work between genders.

Why it is important: As retailers face a 51% employee turnover rate and only half meet women leadership targets, the connection between workplace flexibility and gender equality becomes crucial for business sustainability and talent retention.

For the first time, gender equality has emerged as a top global concern, ranking alongside healthcare and climate change in importance. UN Women's research exposes a significant imbalance in domestic responsibilities, with women dedicating 4.2 hours daily to unpaid care work compared to men's 1.7 hours. This disparity profoundly affects career progression, with 45% of women reconsidering their positions citing inflexible work arrangements as a primary concern. The study recommends comprehensive workplace reforms, including flexible scheduling, remote work options, and modernised leave policies. Additionally, the report addresses emerging challenges in workplace technology, particularly the need to combat gender bias in AI tools and ensure equal access to leadership development opportunities. These findings demonstrate that achieving gender equality requires fundamental changes in how organisations structure work and support employee needs.

IADS Notes: The UN Women report's emphasis on workplace flexibility aligns with significant retail industry developments. March 2025 data reveals companies with flexible policies achieving a 50% reduction in turnover risk, while rigid structures face mounting challenges. The gender pay gap remains stark, with women earning 83 cents per dollar compared to men, dropping to 73 cents for working mothers. The June 2025 Mobley v. Workday case highlights critical concerns about AI bias in hiring systems, with only 28% of people recognising such bias in technological tools. Leadership representation continues to lag, as only half of major retailers meet the 40% women in leadership target. This gap is particularly significant given that women control 75% of global discretionary spending, making gender equality not just a social imperative but a business necessity.

Flexible work is ‘non-negotiable’ for gender equality, UN Women report says

What: The Bicester Collection has transformed luxury outlet retail by embedding local culture, sensory experiences, and thoughtful design into its village concepts across global markets.

Why it is important: The success of this model has influenced the broader luxury retail sector, sparking a wave of investment in experiential retail spaces and demonstrating how careful attention to local context and customer experience can drive sustained growth.

The Bicester Collection's thirty-year journey exemplifies how physical retail can evolve beyond traditional commerce into immersive destinations. From its modest beginnings with 13 boutiques in 1995, Bicester Village has grown into one of the world's most successful retail locations, where visitors spend an average of six hours exploring carefully curated environments. The Collection's approach to experience isn't merely superficial; it's built into the foundation of each location through thoughtful design, botanical elements, and cultural sensitivity. Each village, from Spain's La Roca to China's Suzhou Village, reflects its local identity whilst maintaining the brand's core philosophy of creating spaces that feel cared for and authentic. The recent launch of Belmont Park Village in New York demonstrates this commitment to localisation, offering a bolder, metropolitan interpretation of the concept for American audiences. This careful balance of global standards with local nuance has transformed outlet shopping from a purely transactional experience into a cultural destination, proving that when physical retail prioritises emotion and atmosphere, it creates lasting connections with visitors.

IADS Notes: The Bicester Collection's success aligns with significant retail developments throughout 2024-2025. Value Retail reported double-digit growth in June 2025, projecting 50 million visitors across its locations. This success has influenced major industry moves, including Simon Property Group's acquisition of The Mall Luxury Outlets in January 2025 and L Catterton's GBP 600 million investment in Value Retail in September 2024. The model's effectiveness is further validated by broader industry trends, as seen in British Land's successful Broadgate development and LuxExperience's strategic transformation in May 2025, confirming the viability of combining local authenticity with global luxury appeal.

Built to feel: How the Bicester Collection became a benchmark for experiential retail

What: Amazon's AI-powered review summaries are revolutionising how consumers evaluate product value, with a specific focus on 'value for money' assessments that reflect broader economic concerns.

Why it is important: This innovation signals a pivotal moment in retail, where AI not only simplifies the shopping experience but also directly addresses consumer concerns about value, particularly significant as traditional brand loyalty weakens in favour of price-value considerations.

Amazon's strategic implementation of AI-generated review summaries represents a significant advancement in retail technology, addressing the growing consumer demand for simplified product evaluation. The system processes over 1.5 billion reviews submitted in 2022 alone, condensing them into concise, value-focused summaries that help shoppers make informed decisions. This development is particularly timely as the concept of 'value for money' gains prominence in consumer decision-making, especially amid economic uncertainties and shifting shopping behaviours. The AI summaries provide balanced perspectives, including both positive features and potential drawbacks, demonstrating a commitment to transparency that resonates with value-conscious consumers. This approach has proven especially relevant as brand loyalty diminishes and shoppers increasingly prioritise practical value over traditional brand relationships. The success of this initiative reflects a broader trend in retail, where AI-driven solutions are becoming essential tools for enhancing the shopping experience and meeting evolving consumer expectations.

IADS Notes: Amazon's introduction of AI-generated review summaries reflects a broader transformation in retail technology adoption throughout 2024-2025. As noted in March 2025, 38% of global consumers are already actively using AI for shopping decisions, with an impressive 80% reporting positive experiences. This consumer readiness aligns perfectly with Amazon's strategy, particularly as February 2025 data shows that 71% of consumers now expect personalized interactions. The timing is especially relevant given that 73% of consumers report feeling overwhelmed by traditional online shopping choices, making Amazon's AI-powered review summaries a practical solution to information overload. The initiative also connects to a larger trend in AI-driven retail solutions, as evidenced by Coresight Research's September 2024 finding that 92% of retailers are now using AI-based pricing solutions. Amazon's focus on "value for money" in its AI reviews is particularly strategic, considering BCG's November 2024 survey showing that 38% of shoppers specifically use AI tools to make informed purchase decisions and find the best deals.

The genius of Amazon’s “value for money” AI reviews

What: A Seramount study reveals a critical mental health crisis in the workplace, with half of workers rating their wellbeing as average or below, and one-third experiencing moderate to high burnout levels, particularly affecting managers and younger generations.

Why it is important: The findings highlight an urgent business imperative, as employee burnout directly impacts customer service quality and operational efficiency, with 68% of VIP retail clients following their trusted advisors when they leave.

The state of workplace mental health has reached a critical point, with half of employees rating their personal wellbeing as average or below. The impact varies significantly across organizational levels, with hourly workers being most affected and only 46% rating their wellbeing above average, compared to 70% of executives. The study identifies concerning trends in burnout rates, with managers experiencing the highest levels - 80% reporting at least one symptom. The stigma surrounding mental health remains substantial, as 41% of employees feel uncomfortable discussing these issues at work, with senior managers being particularly hesitant to speak up. Generation Z and Millennials appear most affected, with only 45% of Gen Z rating their wellbeing above average, compared to 84% of Boomers. While remote workers report feeling more supported in balancing mental health and work, the overall landscape shows a clear need for enhanced support systems and resources.

IADS Notes: Recent retail industry data strongly validates Seramount's findings about workplace mental health challenges. April 2025 research shows that workplace stress costs retailers $5.4 million annually per organization, while 45% of employees experience frequent high stress levels. The generational divide is particularly stark in retail, as evidenced by February 2025 data showing 50% of Gen Z rejecting traditional management roles due to perceived stress and low rewards. The benefits of flexible work arrangements are confirmed by March 2025 findings, where companies implementing flexible policies achieved a 50% reduction in turnover risk. However, resource gaps remain significant, with December 2024 data revealing 51% of luxury retail employees planning to leave their positions, while 40% cite lack of empowerment as a key issue. The impact extends to customer relationships, as 68% of VIP clients follow their advisors to new employers, making mental health support not just a wellness issue but a business imperative.

Inside the mental health crisis at work

What: David Jones and Marks & Spencer form a wholesale partnership for lingerie and sleepwear, testing a new approach to British retail expansion in Australia after historical failures by UK department stores.

Why it is important: This strategic move illustrates how retailers are learning from past market entry failures, choosing targeted product categories and established local partners to minimise risks while testing new markets.

Marks & Spencer's latest venture into the Australian market through David Jones represents a carefully calculated approach to international expansion. The exclusive partnership, focusing initially on lingerie and sleepwear, marks a significant departure from M&S's previous direct retail operations that ended in 2001. This strategic shift acknowledges the complexities of the Australian market, where both Debenhams and John Lewis have previously struggled to establish successful operations. The partnership leverages David Jones' established presence and local market knowledge while allowing M&S to test and refine its offering. However, potential challenges remain, including the alignment of M&S's value-for-money positioning with David Jones' premium department store status, seasonal differences, and supply chain considerations. The collaboration's success will depend on effectively managing these challenges while delivering a compelling product range that resonates with Australian consumers.

IADS Notes: The timing of Marks & Spencer's partnership with David Jones reflects broader shifts in the Australian retail landscape. In February 2025, Australian department stores embarked on significant transformation strategies, with David Jones focusing on consolidation and omnichannel innovation to combat digital disruption. This evolution in the Australian market coincides with M&S's own retail journey; in November 2024, the British retailer demonstrated strong domestic fashion performance but faced challenges internationally, explaining their strategic choice of a wholesale partnership model over direct operations. This cautious approach aligns with successful global department store transformations observed in April 2025, where retailers like Selfridges and Harrods proved that traditional operators could thrive through strategic partnerships and experiential retail. The M&S-David Jones collaboration thus represents a calculated response to past failures in the Australian market, leveraging David Jones' local expertise while maintaining M&S's brand integrity.

M&S, Debenhams, John Lewis: Why British retailers struggle to crack Australia

What: New UK regulations transform BNPL services from unregulated payment options to formally supervised financial products, requiring affordability checks and enhanced consumer protections.

Why it is important: As retailers increasingly integrate BNPL services into both online and physical stores, these regulations establish crucial guidelines for responsible lending while maintaining payment flexibility. The UK government's decision to bring Buy Now Pay Later providers under Financial Conduct Authority supervision from June 2025 marks a watershed moment for retail finance.

This regulatory framework mandates affordability checks, clearer customer information, and proper complaint channels, addressing concerns about the sector's rapid growth. Recent figures indicate that one in eight UK adults now use BNPL services, often for essential purchases like groceries and household bills. The regulation aims to protect consumers from potentially unmanageable debt while maintaining the benefits of payment flexibility. The challenge lies in balancing the seamless customer experience that made BNPL popular with responsible lending practices. The new requirements will particularly impact younger consumers and families who have increasingly relied on these services during the cost-of-living crisis. This shift represents a broader evolution in retail finance, where transparency and consumer protection are becoming as crucial as convenience.

IADS Notes: The retail payment landscape has undergone significant transformation, as evidenced by Klarna's expansion into physical retail in September 2024 and John Lewis's adoption of BNPL in November 2024. Research from May 2025 reveals concerning trends, with Klarna reporting a 17% increase in credit defaults. This regulatory intervention comes as Imperial College Business School's November 2024 study showed BNPL services increase consumer spending by 10% while raising financial vulnerability concerns. The timing is particularly relevant as major retailers like Debenhams and Walmart have recently launched or expanded their BNPL offerings in March 2025.

The fine print era: Rethinking retail finance

What: Consumer trust in retailers erodes as 63% of Americans believe companies are exploiting economic conditions to boost profits amid tariff-driven price increases.

Why it is important: As retailers face USD 640 billion in additional import costs, the erosion of consumer trust threatens to fundamentally alter shopping patterns and brand relationships in an already challenging market.

Recent surveys reveal a growing rift between consumers and retailers over pricing practices in the current economic climate. According to the Harris Poll's study of 2,000 adult Americans, 63% believe companies are taking advantage of economic conditions to increase profits. Furthermore, 62% of consumers suspect businesses are simultaneously raising prices while lowering product quality, creating a significant threat to brand loyalty. This skepticism comes as consumers attempt to reconcile official inflation reports with their personal shopping experiences, supported by Harvard Business School's Pricing Lab data showing increasing prices across both imported and domestic goods. The Federal Reserve Bank of New York reports that 75% of manufacturers have begun passing through tariff costs to consumers, with nearly one-third transferring all associated costs. Experts advise businesses to adopt transparent pricing strategies and consider absorbing some tariff costs to maintain customer trust and loyalty during this period of economic uncertainty.

IADS Notes: The current consumer skepticism about retail pricing strategies reflects broader market tensions observed throughout 2025. In July 2025, major retailers like Macy's implemented varying price increases, with footwear seeing rises of up to 4.2%, demonstrating the challenge of balancing cost absorption with profitability. This followed May 2025's dramatic drop in consumer confidence, where 63% of Americans believed companies were exploiting economic conditions for profit. The concern is well-founded, as April 2025 data showed projected price increases of 1-1.5%, with lower-income households facing potential 2.3% drops in disposable income. BCG's March 2025 analysis revealed staggering additional import costs of USD 640 billion, forcing retailers to fundamentally restructure their pricing strategies. The situation has created a trust deficit, with February 2025 data showing 62% of consumers expressing serious concern about rising retail prices, suggesting a potential long-term impact on brand loyalty and shopping behavior.

Retailers in the crosshairs over tariff-driven price hikes

What: Luxury brands reduce price increases to 3% in 2025, marking the slowest rise since 2019 as wealthy consumers resist aggressive pricing strategies.

Why it is important: This pricing adjustment signals a fundamental shift in luxury retail dynamics, reflecting the industry's first significant contraction in 15 years and the loss of 50 million consumers, forcing brands to recalibrate their market approach.

Luxury brands are implementing their smallest price increases since 2019, with an average rise of just 3% between January and May 2025. This marked slowdown from the 8% peak in 2022 reflects growing resistance from wealthy consumers and signals a potential return to pre-pandemic pricing patterns. Major brands like Louis Vuitton and Chanel, which had significantly raised prices between 2019 and 2023, are now facing pushback from clients who are increasingly price-conscious despite their wealth. The impact is particularly evident in specific products, such as Louis Vuitton's Speedy bags, which doubled in price since 2019, and Chanel's large flap bag, which increased by more than 80%. This shift comes as the industry grapples with multiple challenges, including US tariff threats and regional conflicts. While some brands like Hermès and Richemont's jewellery brands show resilience, others face significant headwinds, with LVMH expecting a 3% decline in second-quarter sales and Kering forecasting a 13% drop.

IADS Notes: The luxury market's pricing reset in 2025 aligns with broader industry transformations observed throughout 2024-2025. February 2025 data revealed the sector's first significant contraction in 15 years, with a 2% decline to EUR 363 billion and the loss of 50 million consumers over two years. By December 2024, major brands had begun introducing products under USD 500 to retain middle-class consumers, while April 2025 showed varying impacts across companies, with LVMH reporting a 2% decline while Kering faced a steeper 14% drop. The Chinese market's 18-20% decline in January 2025 particularly influenced this strategic shift, forcing brands to reconsider their pricing approaches across different markets.

Luxury brands ease off on price rises as shoppers push back

What: New McKinsey playbook reveals how AI agents can transform business processes and unlock scalable value through autonomous, goal-driven execution.

Why it is important: The research highlights a critical shift in AI implementation, where success depends not on adding AI to existing processes but on fundamentally reimagining operations with AI agents at their core.

McKinsey's latest report addresses the "gen AI paradox" where despite 78% of companies using generative AI, over 80% report no material earnings impact. The study identifies how AI agents can break this pattern by enabling autonomous, goal-driven execution of complex business processes. Unlike traditional AI tools, agents can understand objectives, break them into subtasks, and adapt in real time with minimal human intervention. The report emphasises that success requires more than simply inserting agents into existing workflows – it demands complete process reinvention. Organisations must shift from scattered tactical initiatives to strategic programs, focusing on end-to-end business process transformation rather than isolated use cases. The research also outlines the need for a new "agentic AI mesh" architecture to manage risks, blend custom and off-the-shelf solutions, and maintain agility amid rapid technological evolution.

IADS Notes: Recent retail industry developments validate McKinsey's findings. In February 2025, research showed that 38% of global consumers were already using AI tools for shopping, with 80% reporting positive experiences. The impact on operations has been significant, with retailers achieving 15-30% improvements in customer service efficiency. However, only 10% of retailers have successfully scaled their AI applications, supporting McKinsey's emphasis on the need for comprehensive transformation rather than piecemeal implementation. The most successful cases, such as Intime Department Store's 15% boost in counter sales through AI integration, demonstrate how reimagining processes around AI can deliver substantial business value.

Seizing the agentic AI advantage