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From AI to retail media, and self operating stores let’s take a look at some of the retail trends we think will shape the future of retail.
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Between machine learning, social media commerce, self-operating stores and retail media disrupting the advertising industry, retail is standing at the threshold of a new day, so as the year is coming to an end we’re taking a look at the future of retail and 11 retail trends we think will shape the state of retail in 2025.
If you work with any form of email marketing you’ve probably spent a good deal of time talking about how “personalization” should be implemented in your work. Not more than a few years ago “personalization” simply meant adding dynamic tags like !Firstname to your emails.
But things are different now.
Between generative AI and retail customer purchase data, personalization is looking a lot more like mind reading and a lot less like dynamic tags and cheap parlor tricks.
Retail AIs are used all over the world to help customers with things like party planning and suggesting items they might like based on previous purchases. And internally retailers like Edeka and Max Mara are using Retail AI to manage everything from improving support situations for the software systems used in their stores to speeding up their order-to-cash cycles.
While e-commerce was once the thing that shaped the future of retail it is currently giving way to a new sales channel, that could be named SoMe-commerce, and this new sales platform is only going to become more important in the years to come.
We’re certainly not saying that e-commerce is going to disappear, but with platforms like TikTok shop and Instagram Shopping entering the market, social media platforms are no longer just a marketing channel to drive traffic to your brand’s webshop. It is becoming a fully integrated shopping experience where buyers can browse offers, explore collections and shop products directly from their Instagram or TikTok app.
This tendency ties in especially well with Gen Z shoppers, 73% of whom use social media platforms to research a product before making a purchase (compared to the 31% for all age ranges), and social media commerce initiatives will help bridge that gap, which is why it is definitely among the retail trends you need to look out for in 2025.
Many brands are focusing their ad spend on retail media networks instead of going with traditional media placements. In fact, retail media was the fourth biggest advertisement channel in 2024, just behind linear TV, and there’s a good reason for that.
Retailers generally have a huge amount of first-party customer data from things like customer clubs and loyalty programs, and purchase data from many of their customers, which means that offers and promotions can be hyper personalized compared to other channels. Retailers already use this information to optimize their offers and promotions, and they are now offering brands to benefit from this information as well—at a price.
Over the past years we’ve seen retail media ad spend grow substantially in both Europe and on a global scale, and there is no reason to believe that this will stop anytime soon.
You can find more retail media statistics in our overview of the state of retail media.
The concept of retail as a service isn’t exactly new, with providers like New Stand, Zybra, WithMe, and the now defunct b8ta having been in business for more than a decade.
Retail as a service, also sometimes referred to as RaaS (not to be confused with Ransomware-as-a-Service), is essentially the WeWork of the retail industry, and presents a break with the traditional retail model in more than one sense.
Where the retail industry commonly focuses on product sales and profits, retail as a service is the go-to strategy for businesses that were previously purely online that want to build a better relationship with their customers through in-store experiences.
Additionally, retail as a service gives brands a much lower barrier of entry to setting up in a physical store by subscribing to a retail as a service platform that manages the entire retail infrastructure and brings multiple brands together in a store-within-a-store way.
While the VR craze probably turned out to be one of the bigger let-downs of the early 2020’s, and we have yet to see a good implementation of Meta’s “Metaverse”, the mixing of physical and digital spaces in retail is an entirely different animal—probably because it holds a practical use.
From virtual dressing rooms that enhance the online buyer’s experience to 3D product inspections, online shopping is seeing massive improvements, and 2025 is unlikely to be different.
As the 20’s are evolving we’re staring down the barrel of a labor shortage, and that begs the question, can we cut the human element out of our business. Here retail is no different than any other industry.
Amazon’s JWO technology (Just Walk Out) is an excellent example of how technology can be applied to retail to solve challenges related to the current (and future) labor shortage. The shopper enters using a mobile application or other login, and picks up the items they want before walking out. A mix of AI, image recognition and sensors placed on aisles or shelves handles things like pricing and payment.
In 2025 we’re expecting to see cashierless stores, automated warehouses, and self-driving delivery vehicles becoming a lot more common.
Sustainability has been a core topic for more than a decade, but we’re starting to see climate consciousness become a decision driver in retail purchases.
This means that carbon-footprint tracking for specific products and presenting climate-impact scores along with nutritional information is likely to become much more commonplace in retail.
Another thing we’re beginning to see in the retail space is climate responsive pricing. While pricing and climate impact often are related already (mainly because climate impact includes things like transportation which affects prices) some retailers are experimenting with surge-like pricing models based around changes in the climate impact of a product.
For instance, the climate impact of strawberries for Scandinavian retailers will vary depending on season. In June-July most Danish retailers carry strawberries from local sources, whereas the December supply of strawberries needs to be transported from Spain.
For older generations purchasing second hand or knock-offs was seen as a last resort, and definitely not something you bragged about, but between a desire for sustainability and a rise in the popularity of ‘old money’ and ‘stealth wealth’ aesthetics both are becoming more common—and more and more acceptable.
With how easy reselling has become with social media commerce, the second hand market is growing to become a competitor to luxury retailers. And although this isn’t new, for instance the second hand luxury retailer Vestiaire Collective is more than 15 years old, we’re seeing more local fashion resellers pop up both physically and on social media.
And if we take a look at knock-offs something interesting is happening as ‘dupe culture’ is having a moment. While buying imitation products goes back generations, Gen Z and younger millennials are publicly outing themselves for buying ‘dupes’.
‘Dupes’ are not replicas carrying the brand name of luxury goods, but instead imitations sold under a different name, that are made to look the part at a glance.
In 2024 private label products held a 38.2% market share of consumer goods in Europe. And in countries like Switzerland and Spain private label products had close to a 50% market share.
And there’s a good reason for that. Coming out of the cost of living crisis, consumers have become more cost-conscious when it comes to spending, but as the economy stabilizes we may not see consumers return from private labels to brand products. In fact, 38% of consumers have no plans to switch back to brand products should the prices drop.
Over the past 6 years the private label value share of FMCG sales in Europe has grown from 31.4% to over 38%, and we’re not expecting to see a plateau in the coming years.
In a world where the origin of a product is just as important as the brand name, transparency is becoming a competitive advantage—in more ways than one.
In 2025 consumers will focus much more on how products were made, how they were imported, and how they are positioned in both a political and environmental sense, and this is the first place where supply-chain transparency becomes important.
Secondly, supply chain transparency has become much more important because the market as well as the consumer is acting globally, which is especially important for online retailers and brands. As a result of the global presence, questions of availability are becoming much more difficult to answer, as consumers are looking for information not just about whether or not an item is in stock, but also if the product is available in their specific region, why they are out of stock, or when they are expected to come back in stock.
From global trade uncertainties to geopolitical instability, and a red sea crisis that may well last into the first half of 2025, if we’ve learned one thing it’s that there’s a constant cloud of uncertainty hanging over our supply chain. So, it’s not really a surprise that supply chain resilience has been a hot topic for the past many years, and we don’t expect that to change.
What we do expect, though, is a growing number of retailers implementing machine learning and AI, not just to track their inventory, but to predict supply chain disruptions and help adapt to them before they impact their business.
From technological innovation to shifting consumer priorities and new business opportunities, the retail industry is being hit by so many disruptions at once that it’s impossible to keep up with all of them.
One of the primary drivers for this, is that many of these retail trends aren’t about retailers adapting to outside pressure, but rather a result of innovative retailers driving a change within the industry.
The future of retail isn’t solely about selling products. It’s a process of creating experiences and adapting to the expectations of a digitally native audience, which is why there’s a need to bring the retail industry into the future be it through new platforms like social commerce, virtual shopping experiences and self operating stores or even new revenue streams like retail media.
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