Retail’s 'Never-Normal': How Industry Leaders Are Building for Agility, Efficiency, and Transformation

Retail and fashion are no strangers to change. And that’s never been more true than the last few years. Economic uncertainty, shifting consumer habits, global trade pressures, and disruptive technologies are all reshaping how the industry thinks about growth.

In a conversation between Santiago Poveda, VP of Retail, Distribution, and Apparel at o9, and Ian Plugge, former COO at PVH Europe, the two explored how leading companies are adapting to this volatile environment and why transformation is no longer a one-time project, but a continuous mindset.

Facing margin pressure with smarter, leaner operations

For many retailers, profitability is under strain. Rising costs from supply-side disruption, geopolitical uncertainty, and a cautious consumer have created a perfect storm. According to Plugge, two themes dominate executive agendas today: demand uncertainty and macroeconomic instability. In response, companies are doubling down on efficiency.

“You want a firm handle on the P&L,” he explained. “Inventory is your biggest cost, so that becomes tightly managed—how much you buy, how you procure, where you position it. Once it’s at a point of sale, it’s all about how you flow it and what markdowns you apply.”

Beyond inventory, organizations are also making broader structural adjustments. That includes tighter controls on hiring, reduced discretionary spending, and in some cases, reorganizations. But the goal isn’t just cost-cutting for survival. For progressive companies, it’s about managing short-term risks while laying the foundation for longer-term agility.

Adapting to a new reality: the 'never-normal'

The term 'never normal' has become shorthand for the relentless volatility the industry faces. For Plugge, companies that thrive are those that shift their mindset from reactive to adaptive. “If you believe business five years from now will look like it did five years ago, you’re in for a rough awakening,” he said.

That mindset shift touches every corner of the business, from how teams are structured to how quickly organizations can pivot strategy, reallocate resources, or experiment with new technologies. The goal is not just to weather disruption but to treat adaptability itself as a competitive advantage.

Where AI fits into the retail transformation journey

Among the biggest enablers of this adaptive model is artificial intelligence, particularly the emergence of agentic AI. Plugge sees two categories of use cases gaining traction. The first are algorithm-driven areas where AI already has a strong foothold: demand forecasting, price optimization, inventory allocation, and promotion management. These are spaces where AI augments well-established planning processes and drives measurable value.

The second category is more exploratory—where “art meets science.” For brands, that includes merchandising, collection development, and creative campaign planning. In these domains, generative and agentic AI tools are starting to offer design inspiration, simulate customer reactions, or even prototype new assortments tailored to specific segments.

Another area drawing attention is agentic commerce. These technologies reimagine the consumer journey, allowing AI to assist across search, product evaluation, and checkout. “It’s going to be a major channel,” noted Poveda. “We’re just scratching the surface.”

How to balance short-term efficiency with long-term transformation

With so many urgent pressures—margin erosion, operational challenges, cost-cutting—it’s easy for businesses to focus only on immediate wins. But Plugge believes the current moment also presents a rare opportunity to invest in change. “Use the focus on efficiency to unlock transformation,” he said. “There are always people in the organization eager to experiment and drive new things. Give them the space.”

Success, however, depends on how companies structure the journey. Plugge advises against overly centralized, top-down programs that stall under their own weight. Instead, he advocates for a hybrid approach: small, high-impact pilots that generate excitement and demonstrate value, then scale. “Start where the energy is. Celebrate quick wins. And as adoption builds, standardize and expand.”

Designing transformations for agility, not rigidity

The traditional model of a multi-year transformation culminating in a “big bang” go-live is no longer sustainable. To succeed, organizations must rethink how change itself is delivered. That starts with aligning transformation approaches to their operating models. Highly decentralized companies, for example, may find success by empowering local markets to drive pilots. Centralized organizations may prefer a top-down model with strong governance.

But regardless of structure, Plugge emphasizes the need for a clear end-to-end vision. “You need someone with an integrated view who ensures the right people talk to each other at the right moments,” he said. “Otherwise, you end up with isolated experiments that don’t move the needle.”

Five takeaways for retail leaders

As the session drew to a close, Poveda summarized the key insights from their conversation:

• 1. Efficiency, agility, and transformation are not mutually exclusive
  Leading organizations are navigating all three, using efficiency plays to create space for longer-term investments.
• 2. Adopt a sequential, use case-driven approach to AI adoption
  Start with high-value use cases like forecasting or inventory optimization. Build momentum, then expand.
• 3. Embed flexibility into your operating model
  In an uncertain world, resilience isn’t an initiative; it’s a way of working.
• 4. Treat transformation as continuous, not episodic
  Encourage experimentation, create champions, and iterate quickly.
• 5. Maintain an end-to-end focus
  Siloed pilots won’t deliver value unless they’re connected across processes, data, and decision-making.

As the retail landscape continues to evolve, companies that can respond quickly, act decisively, and plan holistically will come out stronger.

Agentic AI is not a silver bullet, but paired with the right mindset and operating model, it’s a powerful tool to turn complexity into competitive advantage.

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