In a retail landscape shaped by digitalisation, sustainability, and geopolitical tension, one thing remains essential: the human connection. As Sector Banker Retail at ABN AMRO, Henk Hofstede shares his view on today’s retail dynamics. In conversation with Loek Wermenbol, Retail Strategy Director at First Impression, he discusses today’s major challenges—and the most valuable opportunities.

His core question is clear: “What makes you, as a retailer, worth it to the consumer?”

A sector on a rollercoaster

Since ten years, the retail sector has resembled a rollercoaster, Henk says. “We’re seeing bankruptcies, mergers, and new entrants—but also clear trends like sustainability, digitalisation, and the rise of the experience economy.”

Cost surges in staffing, transport, and energy weigh heavily on margins. “If you’re not bold enough to pass on those costs, you’ll lose your margin—and your capacity to innovate,” Henk notes. At the same time, omnichannel is now the baseline. Consumers expect frictionless brand experiences across all touchpoints. “Returning an online order in-store shouldn’t raise eyebrows.”

And talent? That’s challenge number two. “Staff turnover is high, especially among younger employees. Some car dealers are already launching their own academies. Retail needs to think bigger—and smarter—to attract and retain talent.”

Personal advice: your superpower

People make or break the retail experience. “Consumer behaviour is changing, no doubt. But the need for personal contact? That’s growing,” says Henk. “When I visit a wine shop, I want to be surprised. I want that one bottle that fits me—not just any bottle off the shelf.”

In an increasingly digital world, that personal touch becomes the ultimate differentiator.

“Retail is about people. Period.”

It’s all about experience

To attract Gen Z and millennials, a great store layout won’t cut it. It’s all about experience. According to Henk and a 2024 study with Q&A Retail, over half of these audiences visit a physical store only if there’s something worth experiencing.

“You need to trigger the senses—and deliver sincere service and warmth,” he explains. “Can you create a hyperphysical retail experience that draws them in—and do you have the staff that can deliver it?”

Innovation: bold, but smart

Digital experiences can give your brand wings—if implemented wisely. “You don’t have to go big right away. Start small. Test, learn, scale.” Data and AI are crucial here. “If you know your customer, you can anticipate needs. That’s how you stay relevant.”

Digital experiences can give your brand wings.

Two years ago, Henk researched AI in retail for ABN AMRO. Back then, 50% of retailers had adopted some form of AI. The rest cited a lack of capacity or competing priorities. “But the pace is accelerating. If you don’t jump in now, the gap will only grow.”

His advice? “Run small pilots. Keep learning. Keep tweaking. That’s how you build real impact.”

The core question: why you?

Strip everything away, and one question remains: why should a consumer choose you?

“Online, offline, click & collect, social commerce—the channel doesn’t matter. Relevance does,” says Henk. “What makes you different? What do you offer that no one else can?”

If you can’t answer that, you’re stuck in a price race. And that’s a race you rarely win.

Global pressures, local effects

As margins feel the strain of U.S. tariffs and Chinese competition, consumer confidence is fading. ABN AMRO monitors this closely in the Netherlands.

“Savings are going up. That means spending is going down. Which makes differentiation even more critical.”

Be agile or be gone

At the end of the conversation, Henk brings it all back to one key question: “What makes you, as a retailer, worth it to the consumer?”

Whether it’s price, experience, service or sustainability—if you lack a clear, compelling value proposition, you’ll fade into the background. “Keep doing what you’ve always done, and you’ll get what you’ve always got—probably less.”

His closing advice?

“The world is chaotic. As a retailer, stay flexible. Don’t just chase growth through new stores—plan for downturns too. Think in scenarios. And always ask: where does your value lie for the consumer?”