4 Issues Shaping the Future of Retail Leadership

February is Black History Month in the United States, a time to reflect on the invaluable contributions of Black leaders, innovators, and frontline workers who have shaped the retail industry and beyond.

As we honor this history, we must also acknowledge the evolving landscape of today’s retail environment—one that presents both opportunities and challenges for retail leaders and employees alike. The political and economic climates are prompting changes that require adaptability, thoughtful leadership, and a continued commitment to fostering an inclusive and engaged workforce.

As Shirley Chisholm famously said, “You don’t make progress by standing on the sidelines, whimpering and complaining. You make progress by implementing ideas.” This sentiment is more relevant than ever for retail leaders navigating the complexities of today’s industry.

Earlier this month, my husband and I attended a Black History Month event at the HistoryMiami Museum called “Stories of Resistance from Black Miami.” During the event, we also had the privilege of meeting with some of the speakers, including Miami-Dade County Commissioner Marleine Bastien; historian Lonnie Lawrence, a former FBI and Miami-Dade Police Department officer; and Dr. Adora Obi Nweze, a former educator and current president of the Florida State Conference NAACP.

In a panel discussion, these leaders explored the contributions of Black Miamians to social justice movements while highlighting the ongoing struggle, resistance, and resilience of Black communities in Miami. It was deeply moving to hear their stories of Miami in the ’60s and ’70s—and to consider the fact that there is still so much more work ahead of us.

I also couldn’t help but reflect on the retail industry and the challenges our clients are facing today as they deal with ongoing uncertainty and swift changes in the external environment along with shifting workforce dynamics and operational priorities. The retail leaders I’ve spoken with are assessing the best ways to balance business needs and evolving customer expectations while ensuring their employees remain engaged, inspired, and able to contribute their talents to the fullest.

In light of the complexities and nuances of today’s environment, this month we’re focusing on four key issues that are shaping the future of retail leadership in 2025:

1. The Shifting Landscape of DEI Initiatives

Diversity, Equity, and Inclusion (DEI) strategies continue to evolve, with some retailers adjusting their approaches while others reinforce their existing commitments. These shifts reflect broader discussions on corporate priorities, workforce representation, and customer engagement. Retail leaders are tasked with determining how to integrate DEI principles in a way that aligns with their company’s values, meets employee expectations, and supports a positive workplace culture.

A number of high-profile retailers, including Apple, Costco, TJX, and many other retailers we work with, have maintained their stances on the value of DEI initiatives. These organizations have pointed out that diverse workforces bring broader perspectives and better reflect the communities and customers they serve, and a culture of inclusion ensures everyone can contribute their strengths and realize their full potential. As such, they view it as a win-win-win—for the employee, the customer, and the business.

Here are a few points to keep in mind as you navigate today’s DEI landscape:

• Consumer Influence on DEI Initiatives: Modern shoppers are becoming more vocal about the values they support, and DEI efforts in retail are increasingly under scrutiny. Companies are seeing a rise in consumer demand for businesses to reflect societal diversity in their product offerings, leadership teams, and store staff. They want to shop where the associates look like them as well.
• Inclusive Leadership Training: Especially in the world of retail—whether in the stores or in the store support centers—to be effective, leadership development needs to have a firm grounding in inclusion. This means ensuring that diverse leaders are included, all voices are heard, and there is equal opportunity for coaching, mentoring, and growth into senior roles. Additionally, retail leaders need to develop the skills, behaviors, and strategies to not only manage diverse teams but also create work environments that allow everyone to thrive.
• Employee Resource Groups (ERGs): Many retail organizations are supporting or even formalizing Employee Resource Groups (ERGs) to foster a sense of belonging. These groups play an essential role in empowering employees and giving them a platform to voice their concerns. Among the many such programs being implemented across our retail client base, one great example is at Michaels Stores, where they have established resource and affinity groups, and, crucially, these groups are run by the associates, not human resources or senior leadership.
• Product and Marketing Diversity: Retailers are recognizing the need to offer products that reflect the diversity of their customer base, whether that means expanding color ranges and sizing or creating more culturally inclusive lines. Ulta Beauty is a great example of how to align your focus and do this well.
• Balancing DEI with Business Goals: From a bottom-line standpoint, it’s essential that your DEI goals are working in tandem with your overarching business objectives. This means making DEI a natural part of the business strategy, not something that exists separately from performance metrics. A successful DEI strategy is one that’s integrated into all retail initiatives and clearly demonstrates how DEI efforts support specific business outcomes.

2. The Reduction of Staff and the Impact on Retail Leadership

The retail staffing squeeze continues to have an impact on all levels of the business. Many retailers are restructuring their organizations to create a leaner workforce, often reducing mid-level management roles. While layoffs and other changes can support certain efficiency goals, they also present challenges for store leaders, who must balance operational execution with team development.

Communication channels often suffer as a result. There’s very little time available for those perishable “got-a-minute” moments that impact development of future leaders, and the ripple effects can be costly. Culture erodes, engagement declines, and talented people wonder why they should even stay in a retail job if it’s not clear they can build a career with the organization.

According to Axonify’s 2024 Deskless Report, a staggering 74% of retail managers feel like they’re “making it up as they go along” at least some of the time at work. At the same time, only 39% of frontline workers feel communication is effective. To maintain an engaged, high-performing workforce, retailers need to prioritize leadership support and development as well as clear communication, delegation, and empowerment of associates.

3. Customer Behavior and the Well-Being of Store Teams

Retail employees play a crucial role in delivering exceptional customer experiences, yet they also face increasing challenges in handling customer frustrations. Factors such as economic uncertainty and operational adjustments can contribute to heightened tensions. Recent data indicates a significant rise in customer hostility that’s adversely affecting the safety and well-being of frontline retail associates.

According to Motorola Solutions’ U.S. Retail Worker Safety Report, approximately 46% of retail workers have encountered hostile customer interactions in the past year, and a majority of retail employees (57%) reported feeling unsafe going into the holiday season. What’s more, the Bureau of Labor Statistics reported that the retail sector experienced over 300 worker fatalities in the most recent reporting year, the highest in five years, with violent acts accounting for 40% of these deaths.

Against this backdrop, it’s particularly concerning to see that a lack of adequate training has contributed to 62% of workers feeling ill-equipped to deal with difficult customer situations like theft and aggressive behavior that can arise due to understaffing. These statistics underscore the pressing need for enhanced safety measures, comprehensive training programs, and robust support systems and policies to protect retail associates from increasing customer aggression and ensure a safe and positive environment for employees and customers alike.

4. Leading Through Change in Retail

This is the big one, because continual change is the one thing you can always count on in retail, and that’s true today more than ever. Strong retail leaders are proficient at balancing adaptability, empathy, and strategic foresight. By focusing on clear communication, employee engagement, and inclusive leadership practices, retail organizations and their leaders can navigate these evolving dynamics effectively.

As we move ahead, sharing best practices and fostering dialogue will be essential in shaping the future of retail. Let’s take a page from Shirley Chisholm and consider what ideas we can implement together to make great strides going forward.

And on that note, I’d love to hear your thoughts: What challenges are you experiencing in your stores and organization? How are you addressing these issues? Let’s keep the conversation going.