Industries
Retail
Omnichannel CX and Intelligent Innovation – The Future of Retail
Highlights
- Retailers are actively focused on enhancing customer experience, leveraging technology for data-driven insights, and embracing flexible cloud strategies.
- AI-powered analysis and deeper insights can guide strategic decision-making and optimize business processes.
- In 2025, the retail industry is expected to be significantly more data-driven, personalized, and experiential, with technology playing a key role in shaping the customer journey.
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Overview
The retail industry has always been a competitive space—and 2025 will be no different.
With retailers actively focused on enhancing customer experience, leveraging technology for data-driven insights, and embracing flexible cloud strategies, the year will see infrastructure investments in primarily these areas.
The trends suggest a retail landscape that is rapidly evolving, driven by technological advancements and changing consumer expectations. In 2025, the industry is expected to be significantly more data-driven, personalized, and experiential. Here are six areas that’ll see planned investments to drive growth.
Store transformation
Retailers are moving away from superficial store updates and instead investing in transforming the physical store experience.
This involves moving beyond simple aesthetic changes— like rearranging shelves and lighting—and focusing on improving every customer touchpoint.
Experience is king: The focus is on making the store a destination that provides a seamless and enjoyable experience rather than just a place to buy goods. This involves:
- Streamlining the checkout process, potentially through mobile checkout options
- Elevating the overall shopping experience through personalized recommendations, interactive displays, and curated product assortments
- Transforming the fitting room experience using augmented reality (AR) and virtual reality (VR) to allow customers to virtually try on clothes and see how different outfits would look on them.
Luxury brands leading the charge: Luxury brands are moving away from the traditional high street’ concept of retailing and are investing in creating unique and immersive brand experiences in their flagship stores–in other words, the shift is from high street to ‘high brand’. This involves closing down older, less experiential stores and relocating to new spaces specifically designed to offer a more luxurious and engaging shopping environment.
Data-driven insights
Traditional data analysis techniques in the retail industry are giving way to real-time, artificial intelligence (AI)-powered insights derived directly from transactional data.
This change has significant implications for how retailers operate and make decisions.
Current methods involve aggregating transactional data in data warehouses and using analytical tools like Cognos or Tableau to generate insights, often resulting in a lag of a day or more. This delay makes it challenging for retailers to react quickly to changing trends and customer behaviour.
Large language models (LLMs) and AI are enabling retailers to query transactional data directly as it comes in, providing real-time insights into sales performance, product popularity, and customer buying patterns. This shift allows for a more agile and responsive decision-making.
Use of LLMs also means retailers can query data using natural language, making data analysis accessible to a wider range of users within the organization, regardless of their technical expertise.
Deeper, actionable insights: AI-powered analysis moves beyond simply describing ‘what’ is happening to also explaining ‘why’ it is happening. It even suggests ways to improve (‘the how’). These deeper insights can guide strategic decision-making and optimize business processes.
Omnichannel journey
Another growing trend is the increasing importance of a unified omnichannel journey that provides customers with a seamless experience across both physical and digital channels.
Retailers are using technology to offer personalized promotions and enable app-based checkout processes within the physical store. Mobile checkout options allow customers to bypass traditional checkout lines, leading to a faster and more convenient shopping experience.
A true omnichannel approach, however, goes beyond simply enabling transactions across different channels. It involves recognizing the customer's journey and ensuring their experience is consistent and personalized regardless of how they interact with the brand.
Embracing the cloud
Retailers are moving towards hybrid and multi-cloud environments to reduce their dependence on a single public cloud provider.
This trend is driven by a desire for greater flexibility and risk mitigation.
Retailers are combining services from providers like Amazon Web Services (AWS), Azure, and Google Cloud Platform (GCP), and some are even maintaining their own private data centers. This strategy allows them to leverage the strengths of different providers and avoid vendor lock-in.
Sustainability shifts
In 2025, the retail industry will look at sustainability as a key growth driver and not just a regulatory requirement.
More brands will integrate sustainability into their product offerings, empowering shoppers to make informed purchasing decisions. This includes offering products that may be pricier but have a lower carbon footprint, are longer-lasting, or are reusable.
Retailers will also embrace the circular economy principles and new business models, such as buy-back programs, gear swaps, repairs, rentals, refills, extended warranties for sustainable products, and subscriptions. Retail sub-industries like home furnishings and apparel are set to compete by differentiating themselves in the marketplace. Investments in this approach will drive customer loyalty and growth in the new year.
Other key areas
Besides AI solutions and cloud, there are areas that will have the retailers’ attention to improve brands and customer experience.
These other key areas of interest include:
- Point of sale (POS) evolution: Retailers are rethinking their POS strategies, exploring different assortment plans, availability management techniques, and the use of digital signage to create a more engaging and efficient checkout experience.
- Price optimization: Significant investment is also expected in price optimization algorithms and technologies to ensure competitive pricing and the ability to match or beat competitor prices.
- Brand upliftment: Brand upliftment is another significant investment area, encompassing strategies to improve brand image and perception among consumers.
