Three predictions on how the retail store will evolve in 2025

Consumers are returning to stores — 2024 was a good year for foot traffic (even if consumers didn’t seem to be spending as much money there specifically). 

Heading into 2025, there is still a lot of concerns about softness in consumer confidence and consumer spending. While consumers have been resilient — even defiantly so — there is still a lot of trading down and discount-seeking behavior. Against that backdrop, I think retailers will be conservative in their technology investment decisions — at least until the economic outlook becomes clearer one way or the other.

In terms of where I expect retailers to invest the most, it really comes down to making sure all the areas retailers have been investing in for years are integrated in a way that allows retailers to unlock new offerings and service levels for customers.

PREDICTION #1: In 2025, retailers that put the most emphasis on tech-enabled employee experiences will offer the best customer experiences. 

Retailers have been talking about, and to varying degrees investing in, the employee experience for years. But let’s be real. The typical retail employee today is wearing too many hats — and juggling too many technology devices — to be highly effective in their roles let alone to serve the shopper in a way that is anywhere close to seamless. 

Store fulfillment? There’s a device for that. Inventory lookup? There’s a device for that. Transactions at the register? There’s a device for that. Engaging the customer on the sales floor? There’s a device for that. I could keep going, but you get my point.

It is not uncommon today, particularly during omnichannel transactions in-store, such as adding a cash-and-carry order to a BOPIS order and doing an online return, that an employee will have to do separate transactions, across separate systems and devices, and even ask for the customer’s payment method multiple times. These experiences are inefficient and frustrating for everyone involved.

Investing in mobile technology to streamline how associates serve customers is a high priority for retailers in 2025. They haven’t cracked the code on this yet, but with the industry continuing to experience staffing shortages, retailers can’t kick the can down the road anymore when it comes to making their employees more productive.

Plus, retail workers today don’t want to use dinosaur-era technology. Streamline the tech they use, make it modern and you’ll reap the rewards in employee retention and effectiveness. Your customers will notice the difference too.

PREDICTION #2: Retailers will see diminishing returns in the tech investments they’ve already made if they don’t find a way for their systems —and data — to be truly unified in 2025.

Here’s one example of how retail systems need to work together in an increasingly sophisticated way...

Brenda is shopping in her local store. She finds a jacket she would like to buy, but that store doesn’t have her size. The associate, via a mobile POS device and product inquiry lookup sourcing real time data, lets Brenda know that the product could be shipped to her home. They complete the transaction in-aisle, and once Brenda is identified in the retailer’s system during the checkout process, she is presented with shipping options that take into account her tier in the retailer’s loyalty program (e.g., her “Elite” status qualifies her for free two-day shipping).

In that situation alone, there are nearly a half-dozen possible systems – such as POS, OMS, Loyalty and Promo – that need to be unified to make this experience seamless for the customer, not to mention straightforward and efficient for the associate. Even if retailers can already handle these types of omnichannel scenarios, that doesn’t mean they’ve moved beyond siloed systems or have streamlined processes. When speaking with prospective customers, we often hear stories of retail associates having to use two or three different devices to complete a transaction like the one described above. And that level of inefficiency and disjointedness will be less and less acceptable in 2025.

PREDICTION #3: In 2025, social commerce continues to gain ground. But a word of caution: Don’t neglect social media and store alignment.

As brands plan their social strategies for the year ahead, it’s going to be very important that they don’t neglect the connection between their social media channels and brick-and-mortar stores.

Here’s a hypothetical example of why: A retailer puts together a collection of featured products on TikTok and does a fantastic job of generating buzz and excitement for the products in the digital space. A shopper sees those products via social media and drives to their local store to see them IRL before committing to purchase. But the products are hard to find or maybe not stocked at all, and certainly not promoted in a way that aligns with what the shopper saw on TikTok. The result? Likely lost sales, a disjointed experience and overall disappointment with the brand.

Let’s consider a different ending: The shopper drives to their local store and finds an attractive “As Seen on TikTok” endcap with all the featured products. Maybe there’s even a photo opportunity associated with the display. The experience feels “full circle” and satisfying, a purchase is made and the shopper is more likely to shop with the retailer again both in-store and digitally.

You might be thinking that connecting the dots between social media and stores should be easy. It’s actually not. There are a lot of different teams you have to pull together to do this right, including store ops, marketing, visual merchandising and allocation. It’s like the saying “Instagram versus reality.” You don’t want the experience you provide in the real world to be so wildly different than the one you curate on social media that consumers question your authenticity and lose affinity for your brand.

For retailers that successfully connect the dots between social media and stores in 2025, their customers will show their appreciation in all the ways that matter.

THE BOTTOM LINE: Retailers’ tech priorities are based on what they expect consumers want from them.

Retailers are interested in making the store experience more “experiential” and less commoditized. There’s also a lot of focus by retailers on taking out the disconnects and the friction involved in things like pickup in store and return in store. What’s offered in the store has to position the retailer to move that customer seamlessly from "experience" to new purchase. Orchestration across systems and access to real-time data will be major investment drivers for retail in 2025.