Retail must deliver digitally – PE investors are betting on technology as the most important lever for value creation (FTI Consulting Study)

• Technology as a top priority: 88 percent of respondents rely on IT and digitalization, 43 percent of them very frequently
• Working capital in second place: 86 percent use this lever, 38 percent very frequently
• This is followed by supply chain optimization, cost reduction, and mergers and acquisitions (M&A).

“The retail sector is facing structural change,” says Dorothée Fritsch, Managing Director and retail expert at FTI-Andersch, FTI Consulting's consulting unit specializing in restructuring, business transformation, and transactions. “Private equity investors today expect digital connectivity. Technology is no longer an optional extra, but a basic requirement for scalability, operational efficiency, and competitiveness.”

Digitalization, customer loyalty, AI – what matters now

In addition to technological measures, PE funds are specifically leveraging levers to stabilize revenues. 73% are investing in customer loyalty programs, while 67% are focusing on more effective sales management. According to the study, almost half of these measures are already showing measurable success in the first year. The use of artificial intelligence in various areas of the company is also increasing. With 29% reporting “very frequent” use, retail is above the cross-industry average for the widespread use of AI.

“Funds are not only focusing on transformation, they are demanding clear progress in digital scalability,” says Fritsch. “This increases the pressure on retail companies to question existing structures and make them fit for the future.”

Compared to industry or the technology sector, retail is pursuing a remarkably broad range of value levers. While industrial companies are primarily focusing on technology and optimization in supply chains and operations, and tech companies are focusing on technology and improving working capital, the distribution of levers in retail is more balanced. For example, 30 percent of respondents in retail use pricing optimization very frequently, compared with 28 percent in industry and 24 percent in the tech sector. Retail also leads the way in mergers and acquisitions (M&A) as a value driver.

Speed as a success factor

The study shows that it is not only the choice of levers that is decisive, but also their feasibility. According to the respondents, 43 percent of working capital initiatives deliver tangible results within a year. At 27 percent, this figure is significantly lower for M&A measures. “The speed of value realization is therefore becoming a critical factor, especially in an environment that demands short-term results,” says Dorothée Fritsch.

Technology will remain the dominant value lever in retail in 2025. The combination of IT infrastructure and AI will remain crucial when it comes to sustainable scalability and efficiency gains. At the same time, the integration of online and offline channels continues to gain relevance, as evidenced by the high priority given to sales effectiveness and systematic customer relationship management.

“Investors expect operational excellence, but they are increasingly evaluating the ability to implement digital strategies,” says Dorothée Fritsch. "Those in retail who focus exclusively on cost programs will be left behind. The key is to integrate technology into the operational backbone of the company and deliver results quickly. This is exactly how investments will be measured in the future."

About the survey:

In the second quarter of 2025, FTI Consulting surveyed more than 500 decision-makers from private equity firms, including investment professionals and operating partners. The aim was to gain a better understanding of the levers used to increase value in portfolio companies. The survey was global in scope and included participants from the US, Latin America, Europe, the Middle East, and the Asia-Pacific region.

The full study can be downloaded here:

https://www.fticonsulting.com/insights/reports/private-equity-report

About FTI-Andersch:

FTI-Andersch is a management consultancy that supports its clients in developing and implementing viable future/performance and restructuring concepts. FTI-Andersch actively supports companies that are facing strategic, operational or financial challenges and change processes – or want to align their business model, organization and processes for the future at an early stage.

Its clients include medium-sized companies and corporations operating internationally. FTI-Andersch is part of the FTI Consulting Group (NYSE: FCN) with more than 8,100 employees worldwide.