Retail in 2025: Staying Ahead of the Curve

Global Retail in 2025 - Ins & Outs

1. Balancing channels: In 2024, global brands in retail began a shift back to employing DTC in a more balanced manner, as one of many channels at their disposal. That trend is bound to continue in 2025 as retailers realise the importance of leveraging wholesale equally. A September 2024 report from BMO Capital Markets found that wholesale sales come with higher margins before taxes and interest than DTC sales. The focus on profitable growth, especially in a tough funding market, will require retailers to consider the best way to sell their products, not just the trendiest. Nonetheless, a Capgemini Data and AI recent study found that shoppers are more willing than ever before to buy directly from brands.‍
2. Unlocking the potential of predictive AI to supercharge growth: Rather than focusing on genAI in isolation, innovative retailers are using predictive AI to greater effect. The combined power of genAI with predictive AI will help brands speed up development & predict future trends. More than 80% of retail executives predict adopting AI-powered automation tools by 2027, indicating the increasing importance of AI in retail, as per Deliverect . 46% of marketers in retail worldwide plan to use AI to personalise content in the next 12 months, according to another survey.‍
3. Focus on hyper-personalisation continues: Brand loyalty will take a back seat as shoppers choose companies and products that better align with their personal values and needs. Indeed, consumer expectations around personalisation are increasing, with 73% of shoppers expecting brands to understand their unique needs and expectations. Additionally, retailers who effectively implement personalisation could see a 20-30% increase in conversion rates.‍
4. The new definition of “value”: After years of uncertainty following the pandemic, shoppers have become more intentional about value. As a consequence, people are placing more importance on a retailer’s overall brand value proposition than on discounts & offers. In fact, at least 70% of customers say they are willing to continue buying from companies that increase their prices if they feel valued as a customer. We’re predicting a shift to value-driven messaging that balances cost with quality, with a more empathetic approach.

This Just In- Trending News from the Retail Space

1. Holiday shoppers spent a global record $1.2 trillion online. Mobile and social commerce drove holiday sales that beat forecasts, based on a Salesforce report released last week. The data indicates holiday retail sales reached $282 billion in the U.S., up 4% year over year, and $1.2 trillion globally, a 3% rise from last year. But consumers have also returned 28% more merchandise than last year.
2. Titan Company Limited (TATA Group) inaugurated its first exclusive brand store, IRTH, under its expansion plans in Chennai and aims to achieve a revenue target of Rs. 1,000 crore by FY2027 from its IRTH and Fastrack bags business divisions.
3. 3.20+ global brands including ASOS, Footlocker, EL&N London and Kylie Cosmetics forayed into the Indian market in 2024, as India continues to solidify its position as a lucrative market for international brands, 2024 has proven to be another remarkable year for global entrants.
4. Reliance Industries Limited is testing the market to introduce Campa Cola in the Middle East, starting with Bahrain and then expanding to Oman & Saudi Arabia

NRF 2025: What Went Down at Retail's Biggest Show

‍It's that BIG show that gets BIGGER every year!

“AI is becoming transformative for our business and we really haven't had a technology revolution as large as this since the start of the internet.” – Doug Herrington, CEO, Worldwide Amazon Stores

This year, the following themes were central to the experiences and talks at the conference:

• Omni-channel, now omni-present: The future of shopping is seamless– retailers are mastering the online and offline to offer a unified, engaging experience along with real-time personalisation.
• Sustainability- front & center: Circular model will gain even more depth in 2025- with brands like IKEA, Target & Walmart leading the charge in eco-conscious & waste reduction strategies.
• AI and the automation revolution: From Nvidia’s 'digital twins' to Walmart’s use of robotics; from self-checkout systems to drones, AI-powered innovations are streamlining retail operations and enhancing customer interaction.‍
  

The CX Factor

As CX leaders prepare for the year ahead, they must navigate a blend of timeless challenges and emerging technological hurdles. The CX space has evolved but metrics in CX haven’t. Score obsession still exists, when there should only be experience-obsession, given the decline of brand loyalty.

Only 1 in 5 CX teams are able to translate feedback into measurable business impact.

The goal should be to look beyond traditional CX approaches. By connecting metrics like net promoter score to customer lifetime value & active subscribers to repeat purchase metrics, leaders can gain deeper insights into the correlation- these metrics influence one another and the sooner we decode these patterns, the faster we can build strategies to elongate loyalty.

Winning the Aisle: Your Key to Improving In-Store Footprint & Conversion

As shoppers increasingly seek immersive experiences, brick-and-mortar stores are set to see a surge in foot traffic. To capitalise on this trend, retailers will turn to in-store advertising as both a revenue driver and a way to captivate customers.

In 2025, in-store advertising will elevate the shopping journey through targeted activations that blend the strengths of physical and digital experiences. According to eMarketer, 65.6% of consumers report that digital in-store media formats enhance their spending, with 37.9% stating they would spend significantly more in stores featuring such signage.

Other effective measures for improved experiences include offering free samples of products and services or complimentary demonstrations, exclusive in-store discounts & raffles.

But how do you get their foot in the door - literally - into your store?

Proximity targeting, geo-conquesting, weather targeting, click & collect options, in-store experiences are a few marketing strategies to ensure improved numbers. Trying out new strategies like these will allow brick-and-mortar to compete more effectively with online shopping. The offline retail industry has never been an easy nut to crack and today innovation is more important than ever before.

Did you know that lines can have a direct impact on sales too? 3 in 5 customers have left a line before it’s their turn, while 2 in 5 customers indicated that waiting in a physical line reduces their satisfaction with a business.

Clearly, in the new age of retail, every detail counts!

Decoding Retail: Your Insider Glossary

'Brick and Click retailers'

This term is used for businesses in retail that seamlessly integrate their e-commerce site and their traditional brick-and-mortar stores. When the two aspects are integrated, it enables web-to-store services, like buy online-pick up in-store and buy online + return in store.

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