2025 The Year of
Digital Transformation in Retail
The retail industry marks another game-changing year for growth in 2025 as the industry adapts to rapid technological innovation while meeting new, unprecedented expectations of customers and stakeholders. With a return to a more stabilized environment following a few years of pandemic and post-pandemic uncertainty, the industry is poised to return to a more competitive landscape. To succeed, retailers need to quickly respond to new customer demands and preferences, as well as implementing any number of recent technologies that provide differentiation in the marketplace and innovative ways to deploy data to improve profitability and customer satisfaction.
Transformative Trends
This year, retailers face transformative trends requiring technological adaptation to drive profitability in the following areas:
- AI-Powered Personalization: Leveraging digital tools to create hyper-personalized customer experiences through predictive analytics, tailored recommendations, and dynamic pricing.
- Sustainability through Digital Traceability: Digitalization enables retailers to track product lifecycles, meet compliance requirements, and enhance brand loyalty with eco-conscious consumers.
- Omnichannel Integration: Unified digital platforms ensure seamless customer journeys across online, in-store, and mobile channels.
- Automation and Robotics: Digital solutions streamline warehouse management, inventory tracking, and in-store operations, improving efficiency and reducing costs.
- Immersive Technologies: Digital innovations like AR/VR and metaverse platforms redefine shopping experiences, fostering deeper engagement.
- Supply Chain Digitalization: Real-time tracking, blockchain, and predictive analytics enhance visibility and resilience against disruptions.
- Data-Driven Retail: Cloud and edge computing fuel smarter, faster decision-making across the retail value chain.
By embracing digitalization, retailers can pose themselves to gain a competitive edge, aligning with consumer expectations, while driving efficiency and growth.
A Strategic Perspective
The retail and e-commerce sectors are navigating a landscape defined by rapid technological advancements, shifting consumer expectations, and sustainability imperatives. To adapt to these evolving industry demands, retailers need to adapt several key strategies.
- AI-Driven Personalization is Non-Negotiable : The ability to deliver hyper-personalized shopping experiences will become a core differentiator. From predictive analytics to dynamic recommendations, AI will help retailers build deeper customer connections.
- Sustainability Will Drive Loyalty and Growth: Consumers are increasingly aligning with brands that prioritize sustainability. Retailers must adopt circular economy models, report on Scope 3 emissions, and communicate their environmental commitments transparently.
- Omnichannel Excellence is Table Stakes: A seamless integration between physical and digital channels is essential. Retailers must optimize BOPIS, ship-from-store, and real-time inventory visibility to meet customer expectations for speed and convenience.
- Immersive Commerce is the Next Frontier: The metaverse, AR, and VR will transform how consumers interact with brands. Virtual try-ons and immersive shopping experiences will become mainstream tools for engagement and conversion.
- Social Commerce Will Expand Influence: Platforms like Instagram, TikTok and even Facebook will lead the way in enabling live shopping and influencer-driven campaigns, creating new opportunities for retailers to reach customers where they spend their time.
- Resilient Supply Chains Will Define Success: Retailers investing in predictive technology, blockchain, and real-time tracking will gain a competitive edge by mitigating disruptions and ensuring faster delivery times.
- Automation Will Be a Game-Changer: Robotic fulfillment centers, cashier-less stores, and AI-powered chatbots will streamline operations, reduce labor costs, and improve customer satisfaction.
- Subscriptions Will Drive Retention: Curated subscription services will continue to grow, offering customers convenience, personalization, and value while providing brands with recurring revenue streams.
- Data Will Fuel Agility: Retailers leveraging big data and cloud platforms will improve decision-making across inventory, pricing, and marketing – and will stay ahead of shifting market trends.
- Localized Fulfillment is Critical: To meet rising delivery demands, retailers will be wise to embrace micro-fulfillment centers and regional sourcing strategies to prioritize speed and efficiency.
Success in 2025 will be determined by how quickly and effectively retailers adapt to these trends. Embracing innovation, sustainability, and data-driven strategies will not only position businesses to thrive but will redefine future retail experiences.
As technology advances and customer expectations shift, the future of retail will be defined by businesses that not only adapt but reimagine their role in a rapidly evolving marketplace.
A Shifting Landscape
The retail landscape is undergoing a profound transformation, driven by rapid advancements in technology, evolving consumer expectations, and a growing emphasis on sustainability. The question is: Are businesses prepared for the magnitude and speed of this change?
With AI transforming everything from personalized customer experiences to supply chain efficiency, and the rise of immersive technologies like AR and VR blurring the lines between physical and digital shopping, the possibilities seem endless. But there are challenges beyond technology. What about the shifting consumer mindset? Today’s customers demand transparency, sustainability, and authenticity—values that challenge traditional retail models to their core. Are retailers rethinking their strategies not just to adapt -- but to lead?
The integration of social commerce, subscription-based models, and next-gen loyalty programs indicates commerce is no longer transactional; it is relational and experiential. Add the pressure of navigating geopolitical instability, supply chain disruptions, and the push for carbon accountability, and it becomes clear: Retail is no longer business as usual.
The question is not just how retailers and e-commerce players will adapt—it’s whether they are ready to fundamentally reimagine their role in a rapidly evolving marketplace. The future of retail will not just be about meeting customer expectations; it will be about defining entirely new paradigms of commerce. As the industry looks to its future, it should continually remind itself to think broadly about what is coming next and use its technology and innovation to predict a solution.
The State of the Retail Industry 2025
JAN 2025
ANA FRIEDLANDER is the Retail Industry and Solutions Strategy Senior Director at Infor. She is an expert with more than 25 years of experience in the Apparel and Retail industry -- in fashion, retail, and competitive software companies. She oversaw the RFID and Blockchain projects sponsored by GS1 and Auburn University for the Apparel and Retail industry with larger retailers to test the feasibility of the technology before becoming a mandatory requirement.