Retail Trends: What to Expect in 2025?

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Retail Trends: What to Expect in 2025?

 

The retail landscape is undergoing a profound transformation, fueled by the relentless march of technology. As we look towards 2025, the convergence of the Internet of Things (IoT), Artificial Intelligence (AI), and cloud-based solutions is poised to redefine the way we shop and retailers operate.

Gone are the days of traditional brick-and-mortar stores and online shopping as separate entities. The lines between physical and digital realms are blurring, giving rise to a new era of omnichannel retail. IoT devices are transforming in-store experiences, AI is revolutionising personalisation and customer service, and cloud computing is enabling retailers to scale their operations and respond to market demands with agility.

In this blog post, we will explore the key technological trends shaping 2025 and delve into how retailers can leverage these innovations to stay competitive and meet the evolving expectations of today’s savvy consumers.

6 Key Trends Shaping the Future of Retail:

  1. Omnichannel Excellence: Today’s consumers often use three channels during each purchasing journey. To meet their expectations, retailers need to seamlessly integrate their online and offline channels by 2025. Consumers will demand a consistent and effortless shopping experience, regardless of whether they’re browsing online or in-store. Moreover, retailers are increasingly focused on creating seamless, integrated shopping experiences across all channels. This includes leveraging technologies like mobile apps, in-store touchscreens, and AR to bridge the gap between online and offline shopping.
    Companies that successfully integrate their online and offline channels will be better equipped to cater to today’s consumers. Research shows that 81% of retailers plan to increase their digital sales channels within the next year, highlighting the importance of this trend.
  2. AI-Powered Personalisation: By 2025, AI is expected to handle 80% of customer interactions, offering personalised recommendations, 24/7 support, and optimised pricing and inventory. This will enhance customer satisfaction and drive operational efficiency, leading to increased sales and profits. AI is transforming the way retailers understand and engage with customers. By analysing vast amounts of data, AI algorithms can provide highly personalised recommendations, improve product search, and enable predictive analytics.
    AI and machine learning are driving significant sales and profit growth for retailers. Retailers using these technologies report a 2.3 times increase in sales and a 2.5 times increase in profits compared to those who don’t.
  3. Sustainability and Ethical Practices: Consumers are increasingly aware of the environmental and social impact of their purchasing decisions. As a result, there is a growing demand for sustainable and ethical products. Retailers are responding to this trend by implementing eco-friendly practices, ensuring ethical sourcing, and promoting transparency in their supply chains. Retailers that are able to meet this demand are seeing significant benefits. They are building brand loyalty, attracting new customers, and differentiating themselves from their competitors.
    In 2023, resale grew 15 times faster than general apparel; by 2028, it is expected to double, growing 6.4 times faster. (ThredUp’s 2024 Resale Report)
  4. e-Commerce and AR Innovations: e-Commerce has revolutionised the way we shop, but the online shopping experience still has its limitations. Augmented Reality (AR) is changing that by bringing the physical world into the digital realm. Virtual fitting rooms, 3D product visualisation, and interactive product demos are becoming commonplace. AR technology overlays digital information onto the real world, creating interactive and immersive experiences. In e-Commerce, AR can be used to:
    • Create virtual fitting rooms: Customers can try on clothes without leaving home.
    • Provide 3D product visualisation: Customers can see products from all angles and in different environments.
    • Offer interactive product demos: Customers can interact with products and see how they work before they buy.

    By 2025, 25% of retailers are expected to adopt Augmented Reality and Virtual Reality to enrich the shopping experience.

  5. Supply Chain Innovations: The supply chain is the complex network of organisations, people, activities, information, and resources involved in creating and delivering a product or service. In recent years, there have been a number of innovations in supply chain management that have the potential to revolutionise the way businesses operate. Two of the most important innovations are blockchain and automation. Blockchain and automation are revolutionising supply chain management. Blockchain ensures transparency and traceability, while automation improves efficiency and reduces costs.
    1. Blockchain: Blockchain is a distributed ledger technology that can be used to track the movement of products through a supply chain. Blockchain is tamper-proof, which means that it is impossible to alter or delete data once it has been recorded. This makes blockchain an ideal tool for ensuring transparency and traceability in supply chains.
    2. Automation: Automation is the use of technology to perform tasks that were previously done by humans. Automation can be used to improve efficiency and reduce costs in supply chains. For example, robots can be used to automate tasks such as picking and packing orders.

    Investments in retail automation, such as robots and automation technologies, are projected to increase by 9.3% annually from 2024 to 2030.

  6. Digital Payments: Digital payments are rapidly changing the way we pay for goods and services. Contactless payments, mobile wallets, and other digital payment methods are becoming increasingly popular, offering convenience, security, and a host of other benefits. One of the most significant trends in digital payments is the growth of mobile wallets. These apps allow users to store their credit and debit card information, as well as loyalty cards and other digital credentials. Mobile wallets can be used to make contactless payments at stores, pay bills online, and even send money to friends and family. The future of digital payments is bright. As more and more people adopt smartphones and other digital devices, the demand for digital payment methods will continue to grow. New technologies, such as biometrics and blockchain, are also likely to play a role in the future of digital payments.
    By 2025, it’s predicted that there will be 4.4 billion digital wallet users globally, accounting for over half of the world’s population.

The Future of Retail:

As technology continues to evolve, we can expect even more exciting innovations in the retail industry. From personalized shopping experiences to sustainable practices and cutting-edge payment solutions, the future of retail is bright. Retailers who embrace these trends and leverage technology will be well-positioned to succeed in the competitive marketplace of tomorrow. Many modern retailers across Asia Pacific are switching to ETP’s Omni-channel Retail Solutions and some visionary retail owners are even upgrading their systems to ETP’s Unified Commerce Retail Solutions as they get ready to meet the challenging demands and deliver the amazing customer experiences and benefits that retail consumers in the future would expect from them.

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