As we step into 2025, the retail landscape continues to evolve at a breathtaking pace. But what are the essential themes shaping the future of the industry? In this episode, Oliver Banks delves into the defining topics that retailers must navigate, from the evolution of AI to the growing influence of retail media networks. Discover how financial pressures, social commerce, cross-border trade, and Retail as a Service are setting the tone for the year ahead. Whether you’re looking to anticipate challenges or uncover new opportunities, this episode offers the insights you need to thrive in the fast-changing world of retail.
Listen now to discover:
- Why financial management is even more in focus this year.
- How AI will evolve in the retail sector, and the opportunities and risks it presents for businesses.
- How cross-border commerce is reshaping convenience and consumer expectations.
- Why social commerce’s special blend will drive the next wave of shopping.
- And more!
A quick refresher of the 6 essential themes shaping the retail industry in 2025
Theme 1. Financial management is top of mind
In 2025, financial management will be a crucial focus for retailers, especially in the UK, due to increasing National Insurance costs and already tight margins. Companies will need to find innovative ways to manage payroll and productivity without compromising customer service, amid challenges like inflation and potential business rates reform.
Theme 2: The next evolution of AI
AI will continue to be a hot topic which promises to shape (or reshape) retail in 2025. This year, we’ll be learning and developing a deeper understanding of its various technologies and use cases. Retailers must focus on integrating AI in a way that aligns with customer needs and business goals, ensuring data quality and process improvement are prioritised to avoid misleading outcomes.
Theme 3: Cross-border commerce challenges the urge for convenience
Cross-border commerce will challenge consumers’ preference for convenience as retailers like Shein, Temu and Amazon’s new Haul proposition grow by offering low-cost goods with longer delivery times. Retailers may explore similar models, leveraging their existing marketplace model with offshore suppliers and warehouses to reduce costs while reconsidering the balance between price and delivery speed.
Theme 4: Social commerce brings shopping by stealth
Social commerce will expand this year, blending entertainment and shopping, with platforms like TikTok leading the way. Retailers will need to adapt to this change by engaging consumers through authentic and entertaining content, especially in categories like beauty and fashion, while also anticipating potential new social media platforms.
Theme 5: The rise of Retail as a Service (RaaS)
Retail as a Service will grow, with more companies offering their systems and expertise to other retailers, adding complexity but also maximizing existing capabilities. This trend may extend into data and analytics services, providing smaller retailers access to advanced technologies and expertise.
Theme 6: Refining the Retail Media Network sector
Retailer’s media networks will focus on refining their operations and scale, meanwhile brands need to strategically allocate advertising budgets among numerous available channels. Smaller networks may struggle against larger players due to the need for stringent performance metrics and high profitability expectations.
Bonus Theme: KPI reform for the omnichannel age
Realigning KPIs to reflect modern omnichannel business models will be a significant opportunity, but will remain a tough challenge to overcome. The traditional KPIs were created for an age before omnichannel evolved. But in today’s market, they’re no longer the optimal measures for success. Retailers will need to address complex interactions and emotional factors to effectively measure performance across integrated channels, enabling the next level of omnichannel evolution. Whilst this is a hard transformation to make, the rewards for companies that can deliver this change will be ready to seize the omnichannel market.
Additional episodes to listen to next
Retail trends are a continuation. So consider what’s in store for 2025 by reflecting on the evolutions from last year. Listen to episode 326: Retail Review Of The Year 2024 to remember some of the key evolutions.
The ever-trends of retail continue to be the hot topics, but they continue to evolve. Check out episode 200: The Ever-Trends Of Retail to discover more.
And finally, with so many transformation ‘plate spinning’ in progress, you’ll want to consider how you can overcome the challenges. Be sure to tune into episode 307: Avoiding Transformation Failure to learn more. And remember, Oliver’s book, Driving Retail Transformation: How to navigate disruption and change is here to help you.
