Retail in 2025: 3 Predictions for the Industry

From unexpected political shifts to surprising technological breakthroughs, 2024 witnessed major global developments across different sectors and retail is no exception. With ongoing economic uncertainty, predicting what’s next isn’t easy in the retail arena, where consumer behavior is constantly evolving.

As we step into 2025, we take a closer look at the recent retail developments and explore what the year might look like for the retail industry. In this blog, we detail three key trends likely to shape the future of retail…

AI Waves to Watch: AI Agents, Generative AI

In 2025, AI’s role is likely to expand further. Instead of simple and generic use cases, more sophisticated, personalized and integrated utilization of AI will provide brands with a competitive edge. According to NRF, 2025 is the year of the AI agent. Digitally the tech can influence sales by 60%, and this number is only likely to increase with AI agents learning to tailor recommendations, improve decision-making, and manage replenishment tasks. Similarly, generative AI is also set to revolutionize the industry in 2025.

To facilitate highly tailored interactions, brands will need to integrate AI into their existing systems for the tech to have real-time access to accurate data. Teamwork Commerce is working with Google Cloud to develop new generative AI features in its industry-leading mobile Point of Sale (mobile POS) and Order Management System (OMS). 

The partnership aims to provide retail associates with a generative AI assistant within their mobile POS devices. The AI assistant will be designed to help staff answer customer queries quickly and seamlessly.

Conscious Purchasing

In addition to the evolving technology landscape, it will be no surprise to the retail industry to hear that there will be continued developments and changes in consumer shopping behavior. In the last couple of years, economic uncertainty has led consumers to become more conscious of their purchasing habits – both from a budget lens and sustainability perspective.

According to a recent PwC survey, 22% of global shoppers plan to spend more consciously, seeking eco-friendly products and transparent practices moving forward. This trend is only expected to become more popular. What does this mean for retailers? With customers becoming more conscious about prices and the sustainable impact of purchases, retailers must align themselves with these consumer values. One example comes through, rental fashion, which is allowing customers to experience the freedom to wear what they like for a more eco-friendly alternative. According to British Vogue, renting one item can reduce up to 24% water usage, 6% energy and 3% CO2 emissions compared to buying a new item.

Brands that create sustainable offerings, products and operations can stand out and increase their chances of winning consumer loyalty. In 2025, the industry will likely see more retailers adopt eco-friendly practices to appeal to conscious consumers.

Hybrid shopping to increase

With conscious purchasing, how customers shop has also significantly evolved over the last few years with Buy Online, Pickup In-Store (BOPIS) and Buy Online, Return In-Store (BORIS) becoming popular shopping methods. Over the 2024 shopping period, online purchases were up 6.7% compared to the previous year – thanks to the growing popularity of shopping methods such as BOPIS. Similarly, Salesforce data revealed that BOPIS orders doubled during the weekend before Christmas, making up nearly 40% of all online transactions.

In 2025, the trend of hybrid shopping is only set to increase. According to Statista, in the US alone, the click-and-collect market is expected to surpass $154 billion by 2025. Retailers need to invest significantly in blending their online and physical stores to deliver a seamless shopping experience. Everything must be integrated with cutting-edge technologies that facilitate accurate information in real-time, from supply chains to different shopping channels such as physical stores, e-commerce websites, mobile applications, and social commerce platforms.

What’s next?

In 2025, as expected, AI is already starting to dominate much of the conversation within retail. Although, the discourse around the technology throughout NRF 2025: Retail’s Big Show, demonstrated that the sector’s expectations around the technology have simmered down compared to last year.

The industry can expect to see unique use cases of tech that will redefine both retail operations and the customer shopping experience. Meanwhile, conscious consumerism will likely continue to make the market more competitive.

 One key takeaway for retailers is to remain aligned with consumer values and equipped with the latest technology to cater to shopper needs. By deploying an all-encompassing retail tech stack, brands can operate their entire retail ecosystem from one software platform.

Are you looking to invest in the right technology for your retail business? Get in touch.