E-commerce and retail

From fragmented retail to unified commerce

Executive summary

Retail organizations that unify commerce across resale, mobile-social-physical channels, and AI-enabled platforms will capture the value that is rapidly concentrating on integrated players.

Challenges and opportunities arise at three levels:

Brand: Younger consumers command record budgets and are willing to pay premiums — but only to retailers who have earned their trust. Owned resale, retailer-endorsed private label, and AI-powered curation are becoming the visible proof of authenticity that captures Gen Z spend before third-party platforms do.

Experience: Mobile and social already dominate discovery and purchase, but most retailers still optimize for desktop and fragment the journey across channels. Unifying mobile, social, and physical commerce into one seamless flow supported by frictionless payments and AI personalization is where cart abandonment is solved and conversion gains are captured.

Technology: AI-adopting retailers are achieving fourfold shareholder return improvement while legacy-constrained competitors see minimal gains. The retailers pulling ahead are building unified customer data platforms that turn AI personalization and first-party audiences into retail media revenue — making infrastructure the margin lever, not just the cost line.

The market reality: E-commerce matured but most retailers didn't

After years of e-commerce expansion, unified platform infrastructure now separates winners from legacy competitors:

Resale and private label are reaching platform scale, yet most retailers cede these programs to third parties and doing so, lose both revenue and brand control.
Mobile and social commerce dominate transactions and discovery, yet most retailers optimize for desktop, creating friction in payments.
Companies that have successfully adopted AI have achieved multiple-fold shareholder return improvement, yet only a small fraction of executives have concrete deployment plans.

Most leaders agree: Consumer behavior, payment preferences, and capital market rewards have all moved toward integrated platforms. Retail infrastructure has not. The result is a widening gap between the retailers running unified commerce systems and those still operating disconnected brand touchpoints, payment systems, and data silos. The distance is already opening up.

Retailers that align brand authenticity, unified commerce, and AI-enabled personalization as one system will capture the ground. Those that don't will cede it to platforms, to resale marketplaces, and to competitors who got there first.

Customers expect market integration, systems deliver fragmentation

Retail operates with disconnected systems. Brands market "omnichannel," bolt AI onto fragmented experiences, and run commerce on legacy infrastructure, while consumers and investors reward unified platforms and measurable outcomes.

Over half of publicly traded DTC companies saw 50%+ stock price declines, while omnichannel retailers delivered 11% conversion increase.
59% of consumers abandon carts when their preferred payment method is unavailable, while alternative payment methods are projected to reach 82% of transactions by 2030.
Retail media is projected to reach $165 billion by 2028, yet most retailers lack unified platforms to monetize customer data.
Companies increasing AI adoption achieve 4x total shareholder return improvement, yet only 6% of executives have concrete plans to create business value from AI.

The infrastructure gap is a margin gap

The infrastructure gap is the performance gap. Retailers on fragmented systems miss the margin levers that require integration: retail media monetizes customer data as new revenue stream, private label captures Gen Z budget share, owned resale maintains brand equity while reintegrating returns, and unified payment eliminates cart abandonment. Each requires integrated customer data and inventory platforms, not tactical additions.

Younger consumers intensify requirements. They command massive spending power and willingness to pay premiums for authentic sustainability, yet they also express significantly lower trust than previous generations. Only retailers delivering integrated circular economy, seamless mobile-social-physical journeys, and AI-powered personalization will capture this shift in generational spending habits.

Competitive positioning now depends on unified commerce platforms enabling retail media, AI operations, and circular economy as core business models, not just supplemental projects.

Read on to explore how e-commerce and retail organizations can align brand, experience, and technology to close these gaps.

The new brand imperative: Make resale, private label, and AI curation your brand differentiators

The challenge: Retailers ceding resale and curation to third parties are losing both revenue and brand control

Traditional brand positioning relies on scale and extensive assortments, yet younger consumers increasingly shift loyalty to retailers demonstrating authentic sustainability through owned resale and emphasizing quality via retailer-endorsed private labels. This demographic wields substantial spending power and is willing to pay premiums for genuine credentials, but trusts only a small fraction of companies.

Many retailers fail to capture this shift: they cede resale to third-party marketplaces, treat private label as a budget alternative rather than a quality strategy, and overwhelm customers with undifferentiated assortments instead of providing curated discovery. Yet resale and private label channels are reaching substantial scale, creating a revenue opportunity that requires brand authenticity to capture.

The resale market is projected to reach $73 billion by 2028 (217% increase); 153 US fashion brands have launched owned resale programs (325% increase since 2021); 74% of top brands without programs are actively considering a launch.
62% of shoppers under 30 are willing to pay 10% more for transparent environmental credentials, yet only 42% of Gen Z trust companies; 72% believe that resale stigma has decreased.
Gen Z is projected to allocate 18% of CPG budget to private labels by 2026 (highest of any generation), 84% trust private label quality equally to national brands, 59% trust specifically because retailers endorses.
46% of consumers trust AI recommendations more than friends; AI assistant traffic increased 1,300% during holiday 2024.

Solutions to explore

Launch owned resale as verified sustainability proof

Move beyond generic CSR messaging: launch owned resale programs that demonstrate authentic environmental impact, reinforce premium positioning, and capture Gen Z spend. By integrating resale into inventory and pricing systems, retailers can maintain brand control while also signaling credibility and transparency.

Position private label as retailer-endorsed quality alternative

Shift private label from being seen as a budget option to retailer-endorsed quality, building trust and driving loyalty. Align product curation, marketing, and pricing to Gen Z preferences, who now allocate 18% of CPG spend to trusted private labels reinforces both margin and brand equity.

Deploy AI curation as brand differentiator

Transform undifferentiated assortments into curated, personalized journeys. Use AI-powered recommendations and early-access programs to guide consumers, strengthen engagement, and position the retailer as a trusted advisor in a fragmented marketplace.

What should leaders do next?

Launch owned resale with measurable environmental impact, positioning it as a premium credential, not just a marketing claim. Reposition private label as retailer-endorsed quality and use brand equity to capture the budget allocation shifting toward trusted own-brand products. Deploy AI curation as a brand differentiator and trusted guide, against overwhelming marketplaces.

The new experience imperative: Make mobile and social your primary store, not an extension of it

The challenge: Desktop-first interfaces and limited payment options are driving cart abandonment and churn

Customer experiences remain disconnected across mobile, social, and physical channels. Mobile devices drive the majority of purchases. Social platforms concentrate Gen Z product discovery and AI shopping assistants are being rapidly adopted. Yet most retailers maintain desktop-first interfaces, treat social as a separate channel, offer limited payment options, and operate physical stores as disconnected touchpoints.

This fragmentation drives a measurable loss in revenue: cart abandonment occurs when preferred payment methods are unavailable. Omnichannel integration can increase conversion and basket size, yet most retailers fail to capture these gains. Fragmented experiences also risk permanent customer churn to competitors that have unified mobile, social, and physical journeys.

Mobile commerce is projected to hold 63% share by 2028; smartphones drove 54.5% of holiday purchases in 2024 (up from 51.1% in 2023).
64% of Gen Z use social media to research products (nearly double older generations); 56% of consumers globally purchased through social platforms.
59% abandon carts when preferred payment unavailable, while alternative methods are projected to reach 82% of transactions by 2030.
Retailers launching AI agents achieve 5-15% conversion gains and 4 to 8 times more high-intent behaviors; AI assistant traffic increased 1,300%.
Average online baskets increase 10.6% for established retailers when physical stores open in trade areas; omnichannel integration delivers 11% conversion increase and 15% reduction in the cost of logistics.

Solutions to explore

Unify mobile and social as primary interfaces

Recognize that smartphones and social platforms now dominate discovery and purchases. Prioritize mobile-optimized interfaces, one-tap checkout, progressive web apps, and social-native commerce to meet Gen Z where they engage, turning fragmented interactions into seamless journeys.

Deploy frictionless payment infrastructure

Reduce cart abandonment by integrating every preferred payment method, including digital wallets, buy-now-pay-later, and real-time transfers. Leverage AI for fraud detection and instant authentication, creating a checkout experience that feels effortless across channels.

Integrate AI personalization across all touchpoints

Use first-party data to create continuous experiences, from mobile browsing to in-store visits. AI recommendations should guide shoppers in real-time, anticipating preferences and enabling seamless transitions across digital and physical commerce, strengthening engagement and conversion.

What should leaders do next?

Rebuild mobile and social as primary interfaces, since desktop addresses minority use cases. Deploy unified payment infrastructure that supports every method that customers expect, solving abandonment with modern orchestration. Implement AI personalization with journey continuity, from mobile discovery to in-store completion across all touchpoints.

The new technology imperative: Unify customer data to unlock AI personalization, retail media, and payment orchestration

The challenge: Without a unified data platform, AI and retail media remain isolated experiments

Most retailers attempt AI and automation on infrastructure that cannot support large-scale transformation. AI deployment costs have fallen and agentic AI can automate workflows, but only a minority of executives have concrete plans to create business value, and most lack unified customer data platforms to monetize retail media.

The consequence is significant: companies successfully scaling AI achieve substantial shareholder return improvement, while legacy-constrained retailers see minimal revenue growth. Without unified platforms, retailers cannot deploy AI-powered personalization at scale, monetize first-party audiences, or orchestrate payments, thus locking in a long-term competitive disadvantage.

Companies increasing AI adoption achieve 4x total shareholder return improvement and 2.2x return on invested capital, yet only 6% of executives have concrete plans to create business value from AI.
Retailers launching AI agents achieve 5-15% conversion gains; AI merchandising delivers 36% gross profit lift and 10x faster assortment decisions.
Retail media is projected to reach $165 billion by 2028 (14% to 24% of total media ad spending), yet most retailers lack unified platforms to monetize first-party audiences.
Alternative payment methods projected to account for 82% of transactions by 2030; 59% abandon carts when preferred methods are unavailable.

Solutions to explore

Deploy AI-powered commerce platforms across operations

Consolidate fragmented systems into a unified platform capable of scaling AI and retail media. Ensure real-time integration across inventory, customer data, and commerce channels. Create a foundation for automated, personalized, and profitable operations.

Build unified payment and retail media infrastructure

Move beyond pilots to enterprise-scale deployment. Use AI for merchandising, personalization, and predictive analytics to drive measurable ROI: higher conversion, optimized assortment, and amplified customer engagement.

Architect API-first platform for rapid capability deployment

Build platforms that convert first-party data into advertising revenue while supporting seamless transactions. Unified infrastructure enables closed-loop attribution, monetizing customer interactions and amplifying both top-line and margin performance.

What should leaders do next?

Build a unified customer data platform as a foundation. AI personalization, retail media, and payment orchestration all require integrated data. Deploy retail media and payment infrastructure together, and allow each to multiply the other's monetization potential. Architect an API-first platform for rapid capability deployment, since legacy integrations create permanent execution disadvantages.

AREA 17 helps you face this new paradigm

Retail value is concentrating on the platforms that own the full consumer journey, yet most retailers are ceding discovery to social platforms, resale to marketplaces, and loyalty to whoever has the better app. The ones who start building the infrastructure to own them together will shape the market.

The retailers pulling ahead have stopped treating brand authenticity, unified commerce, and AI-enabled personalization as separate initiatives. They run brand, experience, and technology as one system, because that is the only way to capture resale, own the journey, and turn AI into a durable margin lever simultaneously.

AREA 17 combines strategic consulting with hands‑on product development, working with e-commerce and retail organizations to think, design, and build the platforms that:

Build trust through owned resale and private label, by designing branded resale programs with measurable sustainability signals and positioning private label as retailer-endorsed quality, making circular economy and quality as the most visible brand credentials, rather than abstract claims.

Unify mobile, social, and physical commerce, by creating seamless payment experiences, AI-powered personalization, and unified data layers that connect online behaviour to in-store context, reducing cart abandonment and making journeys feel continuous across all channels.

Deploy AI and retail media infrastructure at scale, by building unified platforms that support real-time personalization, automated merchandising, and first-party data monetization, turning AI and audiences into durable profit levers, instead of isolated experiments.