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Key Takeaways:
- The retail sector continues to evolve at pace
- Technology blending physical and digital is driving innovation
- Seamless, unified experiences are crucial for customer satisfaction
- Cost efficiency is a priority amid economic turbulence
Future of Retail 2025: Ciklum's Predictions
The retail sector is experiencing rapid digital transformation, driven by evolving consumer expectations. According to Gartner, 86% of customer service leaders across all industries say improving customer experience is a top priority for them.
This aligns closely with the growth of new technology in the sector, such as artificial intelligence and the Internet of Things (IoT), which are supporting 8.5% year-on-year growth among the biggest 250 companies in global retail.
But what does the future hold for a sector that’s evolving and growing so quickly? This blog highlights Ciklum’s 2025 retail trend predictions.
Where is the Retail Sector Currently?
Firstly, it’s important to take a snapshot of the factors that have driven such a strong pace of change in retail in recent years. These include:
What’s Next for Retail? Our Key Predictions
1. Self-Service Takes Over: The Rise of Autonomous Shopping Experiences
Customers will increasingly want more control over their buying journeys, whether they’re shopping physically or digitally. More than half of younger shoppers in Generation Z say they prefer self-checkouts over those operated by staff, and a similar amount say they would switch retailers if a better checkout-free one became available.
This will encourage more and more self-service checkouts to be introduced to a wider range of retail scenarios, expanding beyond grocery into fashion and general merchandising.
2. Back to Bricks: The Return of the Tactile Shopping Experience
The physical shopping experience will continue to hold value for customers. EY’s Future Consumer Index has found that 57% of consumers worldwide want to be able to see and touch products they’re interested in before committing to a purchase. Increasingly, consumers are astute in choosing digital or physical buying journeys, depending on what it is they want to buy.
At the same time, augmented and virtual reality are giving consumers the best of both worlds, combining physical product evaluation with virtual try-ons and experiences to create seamless, immersive buying journeys. Giving customers more confidence that they’re making the right purchasing decisions will help boost satisfaction and lower return rates.
3. The Impact of Generative AI: How AI Is Changing the Way We Shop
We expect 2025 to be the year where the novelty of Generative AI wears off and more retailers focus on practical use cases for the technology. These are likely to include search and product discovery, supported by conversational interfaces that can help customers find the products they want through natural language.
Additionally, generative AI will play a leading role in supporting hyper-personalization, in conjunction with data analytics. Assessing consumer behavior and preferences can inform tailored shopping experiences and product recommendations that drive better loyalty and engagement in the long-term.
4. Goodbye Omnichannel, Hello Unified Commerce: The Seamless Shopping Future
It won’t be long until the retail industry is talking less about omnichannel and more about unified commerce, where the focus will be on holistic, seamless blending of digital and physical touchpoints. This approach goes beyond traditional omnichannel strategies by providing a completely integrated customer experience across all channels, with a single, centralized view of customer data and operations. This will not only make for smoother and more satisfying experiences, but it will also help alleviate fears around intrusion or misuse of customers’ personal data, as customers come to realize the value of the experience they receive in return.
While this transformation is taking time to materialize—with Forrester discussing a '6E Strategy for Digital Store Transformation' even a year ago—the expectation is that this migration to unified commerce will begin to manifest itself in the coming year, emphasizing operational efficiency and a truly customer-centric approach that eliminates distinctions between online and in-store interactions.
5. Sustainability in Retail: How Business Models Are Evolving for a Circular Economy
As demand for sustainable retail grows among both authorities and the public, we expect more efforts from retail towards supporting a circular economy that minimizes or even eliminates waste and pollution. Consumerist messaging (such as Black Friday promotions) will gradually be softened and toned down as retailers move away from the idea of overconsumption, towards more durable products designed from recycled and/or eco-friendly materials.
6. Brand Collaborations: Why Partnerships Will Drive Retail Innovation
Economic turbulence and increased legislation will lead more brands, including some of the world’s biggest, to collaborate in order to pool their abilities to innovate, expand and tap into new customer bases. According to the Retail Insight Network, 90% of companies feel that collaborations are good for their innovation and expansion initiatives. From Primark and Disney to Shein and Forever21, it will make increasing business sense for some businesses to work together rather than try to build entire materials and innovation bases in-house.
7. Generative AI Driving New Ways Of Working Behind The Scenes
Not only will Generative AI change the ways in which people shop, but it will also transform how retailers operate. This can include turning concepts and sketches into high-quality designs; enabling Robotic Process Automation (RPA) throughout the supply chain; generating detailed sales descriptions and content based on previous work that has gained traction; informing store layout optimization; and developing personalized training content for staff.
8. Social Commerce Boom: Why Shopping on Social Media Will Dominate
The growth of social media-based shopping has been huge in recent years, driven in no small part by major retailers like Temu and Shein on TikTok. This will continue to grow at pace in the years to come, with Forbes expecting annual social commerce sales to more than double in just four years, reaching $144 billion by 2027. Forward-thinking brands will pursue this channel more and more in 2025, in order to grab emerging market share.
9. Staying Efficient: How Retailers Are Innovating to Overcome Economic Challenges
More and more retailers will have to get creative in order to balance their ability to innovate and embrace new opportunities with economic reality. For example, in the UK, changes to the National Living Wage, National Insurance and business rates will add costs for all retailers in staffing terms. This may lead to many retailers accelerating the rollout of automated technologies like self-service checkouts and AI-supported customer service agents, as the case for making cost savings becomes even more compelling. This is a good way for brands to reach shoppers directly at the point of sale, where they’re more likely to make a purchase.
10. From Warehouse to Doorstep, Smarter Than Ever
Related to the previous point, many retailers are turning to intelligent automation in their supply chain management in order to find those cost efficiencies. This includes using Robotic Process Automation (RPA) alongside AI to optimize supply chain operations, ensure timely delivery; rationalize inventory management; and enhance the ability to respond to new market trends and changes. All this can not only save money, but improve efficiency and performance at the same time.
In Summary: Taking Full Advantage
There’s a lot that retailers can do to take advantage of these trends and stand out from the crowd in a saturated, competitive marketplace. And from a customer experience and technology standpoint, this is where the support of a partner like Ciklum can be so helpful.
Our expertise in retail and consumer technology innovations means we’re perfectly positioned to develop and implement the solutions that can help you make the most of these trends. Talk to our team today to find out more about how you can embrace innovation and build future-ready strategies for long-term success.
