Retail & eCommerce trends in 2025: AI & loyalty focus

Jamie Cairns, Chief Strategy Officer at Fluent Commerce, has provided insights into retail and eCommerce trends anticipated for 2025.

Artificial Intelligence (AI) is expected to become more usable and widespread in 2025. According to Cairns, "Whether it's predictive or generative, you can't escape the hype about AI. There are so many examples of how AI can be used across sectors to save time, improve productivity, improve customer experience and sell more. And the retail sector is no exception. However, the reality is that most retailers are not yet in a position to benefit from AI technology due to a lack of data both in quantity and quality. Indeed, many of the 'new AI tools' are not 'new', they are existing machine learning tools that have simply been rebranded as 'AI Tools'."

In 2025, there is expected to be an increase in experimentation with AI, with efforts concentrated on making AI solutions intuitive and user-friendly.

"Experimentation with AI will grow in 2025 and will be more usable. It seems every technology vendor has an AI solution, but in 2025, there will be more focus on making those solutions as intuitive and usable as possible," Cairns remarked.

Retailers are also anticipated to alter their approaches to forecasting and planning in 2025. Cairns noted the shifting dynamics imparted by the global pandemic, stating, "If the global pandemic taught retailers anything, it was the need to be able to respond to a changing market, quickly."

"Once a year or even once a season plans when it comes to forecasting demand for stock just doesn't work today."

Real-time synchronisation of inventory data will allow retailers to better track orders and replenish stock efficiently, minimising 'out of stock' occurrences.

This synchronisation also helps align advertising with actual inventory levels to maintain customer trust and minimise wasted ad spend. Retailers will need to adopt dynamic and flexible forecasting capabilities. "Retailers need to be able to plan little and often and be able to adjust their forecasts easily," Cairns highlighted.

As the cost of living pressures persist, retailers will place greater focus on customer loyalty. Cairns explained, "In an Australian retail environment defined by heightened competition and consumers tightening their wallets, now more than ever, retailers need to focus on how they retain customers in 2025 and create customer experiences that drive loyalty."

With rising customer acquisition costs, retaining existing customers and enhancing their loyalty will become critical.

The approach to technology investment within the industry is also poised to change. Post-pandemic budget constraints are easing, but the justification process for new technologies has become more rigorous.

"Post Covid, we've definitely seen a contraction in budgets for new technologies," Cairns said. "The focus has been very much on cost reduction and efficiencies. We are starting to see those budgets open up again from our existing and new customers, but the business cases to get that budget has become harder."

Global brands are expected to increase their spending on enterprise technology in 2025, albeit with lengthier sales cycles as decision-makers must well understand the technologies under consideration. "In 2025 global brands will spend on enterprise tech, but the sales cycle will become longer," Cairns concluded.