Trends and technologies poised to make an indelible impact in 2025

With an improving economy and inflation on the decline, the 2024 holiday season promises to be both busy and profitable for retailers. 

NRF predicts holiday-related shopping sales will grow between 2.5% to 3.5% as compared with 2023. Coveo’s holiday outlook research has also shown that more than three quarters (76%) of consumers are planning to maintain or increase gift purchases this quarter, compared to the same period last year.

As 2024 comes to a close and the most hectic shopping peak of the year gets underway, it’s a good time to take a look forward to trends that will make an impact on the retail sector in 2025. 

Two major trends for 2025 that will continue to grow in popularity are drop shipping and online retail marketplaces, both of which are gaining momentum as they cater to evolving consumer and business needs. 

The global drop shipping market is projected to exceed $400 billion by 2025, driven by its low startup costs and the flexibility it offers businesses to operate with minimal inventory.

This reduces overhead expenses and eliminates the risks associated with unsold stock. The drop shipping model is particularly appealing to niche markets, as it allows businesses to swiftly respond to market trends and consumer demands while expanding their global reach with minimal financial investment.

Online retail marketplaces are experiencing significant growth, with U.S. consumer spending on these platforms expected to hit $468.33 billion in 2024. This surge is being driven by new players like Temu and TikTok Shop, which are disrupting the market with competitive pricing, attractive promotions, and free shipping. 

The scalability and wide reach of these marketplaces are also key factors behind their success, providing a vast selection of products and fostering competition that appeals to customers around the world. As a result, both buyers and sellers are increasingly flocking to these platforms, accelerating their rapid expansion.

Six other technology-driven trends that we’ll see reflected in retail operations, marketing campaigns, and ability to deliver business-to-business and business-to-consumer customers the buying experiences they demand, include:

• We’re in the 'show me the value' era of generative AI The hype cycle of generative AI experimentation is coming to an end, as enterprises now expect clear, measurable ROI from their investments in the technology. In 2025, we’ll see a decisive shift from pilot projects to full-scale generative AI deployments, with a focus on practical applications that drive real business outcomes.
• Transparency and ethics as commerce differentiators: Consumers are increasingly conscious of ethical sourcing, data privacy, and the societal impact of their purchases. Transparency and ethical practices will be key differentiators for commerce brands in 2025. Companies will need to demonstrate responsible AI usage, sustainable sourcing, and data privacy measures to build trust and loyalty.
• The rise of conversational commerce: Consumers are seeking more human-like and interactive shopping experiences, blurring the lines between online and offline channels. By 2025, conversational commerce will become mainstream, powered by AI-driven chatbots, voice assistants, and personalized recommendations that guide customers through their journey and provide instant support.
• The demand for value-driven shopping experiences: Consumers are increasingly discerning, seeking value beyond just price. They want personalized experiences, relevant product information, and seamless interactions. In 2025, successful commerce companies will prioritize delivering demonstrable value at every touchpoint, using data and AI to personalize offerings, optimize pricing, and build lasting customer relationships.
• Business-to-business commerce embraces agility and customer-centricity: More business-to-business companies are adopting business-to-consumer-like strategies, prioritizing digital transformation, personalized experiences, and streamlined sales processing; however, many software companies have not delivered products that grapple effectively with business-to-business commerce complexity. As software companies rise to the occasion, Business-to-business commerce in 2025 promises to be characterized by agility and customer-centricity, leveraging AI and data to empower sales teams, personalize product discovery, and optimize complex transactions.
• The evolution of commerce architectures:  The commerce technology landscape is shifting, with a move away from rigid, monolithic platforms towards more flexible and modular solutions. In 2025, commerce companies will embrace modular architectures that allow them to choose best-of-breed solutions, integrate seamlessly with existing systems, and adapt quickly to changing market demands.

New year, new opportunities to increase customer loyalty

Retailers should go into 2025 with optimism, as well as new campaigns that leverage first party customer data from the holiday shopping season. This will help brands identify their most loyal customers to offer early access to sales, special discounts, or loyalty points. These initiatives will encourage repeat business and make customers feel valued long after the holidays.

Peter Curran is GM of commerce for Coveo.