The Future of Retail is Personal
What Brands and Retailers can Expect in2025
The retail industry has been on a wild ride the past few years, marked by unprecedented moment after unprecedented moment. Panic buying, widespread out-of-stocks, historic levels of inflation – shoppers have navigated these dramatic swings in novel ways, from sacrificing brand loyalty in favor of private label to consolidating what once included multiple trips into one shop at a single retailer.
The act of shopping, whether it be for day-to-day essentials or larger one-time purchases, is deeply personal to consumers and has grown even more so in the reflection of our turbulent economic times. As shopper behavior responded to the radical shifts in the retail industry, the tried and true strategies brands historically used to reach them have struggled to keep up. Every shopping experience is unique and therefore, to succeed, every attempt to sway a shopper must be customized.
In order to reach shoppers throughout the path to purchase, especially while in the aisle where we know the majority of decisions are made, new approaches and tools must be deployed.The retail industry is working hard to pull the future forward and emerging technologies are promising. While the retail industry isn’t quite there yet, the future and its emerging technologies are promising.
Brands can win the battle against private label with smarter promotions
Leveraging AI to deliver every shopper a custom-fit promotion
According to Ibotta’s 2024 State of Spend report, 72% of consumers said a challenging economy has had a direct impact on their grocery spending habits. This translates to shoppers sacrificing brand loyalty to trade down to private label or omitting purchases entirely in face of rising prices. The swing to private label comes at a steep cost to brands. Reacquiring these lost consumers is expensive. A modern promotional strategy that reflects the current state of shopping behavior is essential to winning these shoppers back while still prioritizing the trial and acquisition of new consumers.
As brands kick off the new year, a balanced plan that incorporates digital, “smart” promotions, catered to the unique behaviors of the inflation-influenced consumers that can be modified based on performance should be the goal for promotional strategy. This will require tools and partnerships catered to the modern shopping ecosystem.
It is clear by now that the one-size-fits-all approach to promotions is antiquated and ineffective at swaying the modern shopper. Reliance on old-school tactics that blanket offers without consideration of the individual’s likelihood to purchase are most likely leading to a lackluster performance and result in disappointment. This is where innovation like AI can provide benefits that are not only effective in reaching individual shoppers where they’re at but at a reasonable cost to brands.
AI has the potential to radically change how brands have implemented promotions. Automation will allow promotional programs to look at the individual behaviors - brand loyalty or willingness to try new products - and develop algorithms that generate targeted, highly personalized promotions, all while brands set cost efficiency targets and drive incremental units. A critical part of a successful AI-based promotions program is real-time data. Together, AI and real-time data-informed promotions will evolve from a “nice-to-have” to an always-on revenue driver in the marketing plans of the future.
75% of purchase decisions are made in the aisle, presenting an enormous opportunity for brands to influence buying decisions through tools like electronic shelf labels (ESLs) and real-time promotions.
Tech in the aisle - meeting shoppers where decisions are made
Measurement in real-time is critical to the future of promotions
75% of purchase decisions are made in the aisle presenting an enormous opportunity for brands to influence buying decisions while the consumer is face-to-face with their product. Aside from crowded in-store signage, there has been a gap in reaching these shoppers at such a pivotal moment. The emergence of electronic shelf labels (ESLs) will enable brands to present their best offer right when it matters most. ESL adoption has historically been centered around operational impact, as their deployment is an investment for retailers. However, their potential beyond operational efficiency is untapped, especially when it comes to personalized promotions.
ESLs will be the premier way to engage with shoppers in the aisle through interaction with their mobile devices in real time. The ability to present targeted offers based on when they are in the aisle and who they are will turn the ways brands have historically done promotions on its head. As ESLs are adopted across the nation, brands will soon be able to deliver targeted offers based on likelihood to buy, brand loyalty, and purchase history. An opportunity that to-date has been limited to before and after purchases have been made, missing the massive opportunity right in the center of the shopping experience.
The archaic practice of setting a marketing budget once a year and forgetting about it until it’s time to measure success is an easy way to waste resources. Instead, brands should be getting real-time insight on how their promotional spending is unfolding and the ability to adjust based on performance. Ibotta’s platform leverages machine learning to analyze the performance of a promotion based on consumers exposed to an offer against those who were not. This information allows brands to determine how their campaign is performing along the way and adjust based on cost-per-incremental-dollar-moved – a key metric to determine the success of a campaign.
The future of retail is moving faster than we’ve ever seen. Shoppers are both more accessible and less influenced by one-size-fits-all promotions, especially as they are making cost savings decisions in the face of inflation. Brands have an opportunity to embrace the technologies of the future - tech in the aisle, AI, real-time measurement. Those who do so will certainly have an advantage in the modern retail environment to come.
The State of the Retail Industry 2025
JAN 2025
Bryan Leach – Founder & Chief Executive Officer
Bryan Leach is the Founder and CEO of Ibotta (NYSE:IBTA), a leading performance marketing platform that allows CPG brands to deliver digital promotions to over 200 million consumers through a network of publishers called the Ibotta Performance Network (IPN). Under his leadership, Ibotta pioneered a pay-per-sale model that allows brand marketers to gain market share cost effectively, only paying when their campaigns lead directly to sales.
After founding Ibotta in 2012, Bryan took the company public in 2024 in what was the largest tech IPO in Colorado history. Bryan is a frequent commentator on loyalty and rewards, digital media, and the role of AI in pricing and promotions. He has been recognized as a Top 10 CEO in the United States (small/medium size businesses) by Glassdoor.com, CEO of the Year by ColoradoBiz magazine, and EY Entrepreneur of the Year for the Rocky Mountain Region.
Prior to Ibotta, Bryan was a partner at Bartlit Beck LLP and served as a law clerk to former US Supreme Court Justice David Souter. As a lawyer, he specialized in international arbitration and dispute resolution, and handled trials and arbitrations in London, New York, Seattle, and San Francisco. Bryan is a graduate of Harvard, Oxford (Marshall Scholar), and Yale Law School. He resides in Denver with his wife and two teenage daughters, and has climbed to the summit of Colorado’s 58 tallest mountains.