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In 2025, the retail industry will reshape the online shopping trends, altering not only how we shop and sell, but also where we shop and what we buy (a mimosa while shopping, anyone?).
Retail and the global economy as a whole are entering a period of both optimism and unpredictability. There has been a determined effort to get things back to "normal" as nations all around the world work to recover from the COVID-19 pandemic. But given that so many customers have been forced to use digital communication, distant services, and mobile technologies on an unprecedented scale, what will that new normal look like?
The shop on the main street of your town, the shoppable Instagram post, and the promotional email directing you towards online shopping trends & can all be from the same merchant. And that retailer might have radically changed from the previous year. Let's find out what the retailing world has lying in wait for us for this and the coming years!
5 Retail Trends That Will Shape 2025
Hybrid Experiences Redesigning Retail
According to RedSeer Consulting, Indian e-tailing has touched ~$135 Bn in FY24 with a 22% growth rate compared to FY23! Post-pandemic, the Indian e-tailing industry is better off due to internet proliferation and omnichannel retailing driven by the surge in eCommerce platforms. So, in the bid to make the best of both worlds, retailers are adopting new strategies that ensure no opportunity for in-store or online buying falls through the cracks.
Many aiming to create more seamless omnichannel commerce consumer journeys and are providing distinctive, memorable shopping experiences that combine aspects of the digital and physical worlds.
On a physical level, brick-and-mortar shops are rapidly transitioning from being standard stores to experience centres. Retailers have come up with innovative ways to boost word-of-mouth marketing and create one-of-a-kind products, from event spaces like the House of Vans in London, which has a concrete skate bowl and frequently hosts art installations, workshops, and concerts, to creative store concepts like Nike Live small-format stores.
Smart retailers have enhanced their in-store experiences with digital elements including augmented reality (AR), interactive kiosks, touchscreen digital displays, and apps made expressly for in-store use. Conversely, this is also true: Retailers have figured out innovative methods to bring physical capabilities into the digital world, such as employing AR to let customers visually view furniture in their homes and even try on clothes.
These hybrid experiences, which were once thought to be experimental, will only spread throughout retail in 2025 and beyond as companies compete to out-innovate one another and create customer exciting, delighting experiences.
Millennials and Generation Z Prove They Are Digitally Aware Consumers
The popularity of consumers among Millennials and Gen Z is increasing both nationally and internationally with each passing year. Both generations are more accustomed to instant convenience and digital services than their Gen X and Baby Boomer counterparts because they were early users of technology and tech natives.
Younger consumers are more comfortable using online consumption financing options like buy now, pay later because they were quicker to switch to internet purchasing during the height of the pandemic (BNPL). In fact, according to eMarketer, either Gen Z or Millennials make up about 75% of all BNPL users in the U.S.
However, while both Millennials and Gen Z are inclined to shop in accordance with their personal ideals, digital technology is only a portion of the tale. Gen Z in particular will put pressure on brands to act on issues they support, such as climate change, racial equality, and accessible education, and they will reward companies who do so.
This provides a formidable mix for marketers wanting to win over the next generation of customers, especially when combined with their propensity for being thrifty with their purchasing. Customers that care about the environment will favour companies who are open about utilising sustainable and ethically sourced materials and that promote fair working conditions in factories. It isn't enough for brands to preach inclusivity or ethical responsibility they need to actually show their commitment to social causes. Given that younger consumers are inherently sceptic of brands and more likely to conduct research before making a purchase than previous generations, this is especially true.
Sustainability Is Top of Mind for Shoppers
Not only is sustainability a contentious topic, but it also ranks highly with today's retail shoppers. Customers who care about social issues are looking to vote with their dollars, buying everything from environmentally friendly goods made from renewable resources with a little negative impact on the environment to goods that were produced and sourced ethically by businesses that pay their employees fairly. In fact, a Capgemini consumer survey revealed that 79% of consumers are altering their purchasing habits due to sustainability. Furthermore, 34% of consumers are willing to pay more for sustainable goods and services, and those who are would tolerate an average price increase of 25%.
It's obvious that adopting sustainability is a significant revenue-generating opportunity for shops who are aware of it, and many sectors and advocacy organisations currently provide advice on how businesses can implement more sustainable practices. However, in their zeal to cash in on this trend, businesses must take care to prevent "greenwashing," which involves deceiving customers into thinking that their items are more environmentally friendly than they actually are. In fact, doing so can turn off customers; in a survey of consumers, more than half stated that they would completely stop doing business with companies they believed to be engaging in greenwashing.
Decisions Based on Data
The fact that no one can predict significant disruptions like the pandemic is by far the most important lesson of the times we live in. E-commerce trends can indicate in a direction of growth, but seismic shifts in all industries will always be brought on by unanticipated or unusual events. Making efficient use of real-time data across all channels is the only way to be certain of what might be the best course of action moving forward for your retail.
Democratize your data so that everyone in your company has access to the same information. Dismantle those silos to improve cross-channel and departmental communication. Organizing your data architecture for a more uniform and comprehensive picture is the first step in getting a clear understanding of who your consumers are, what they want, and how to effectively deliver that to them.
Service Economy
The conventional retail concept of purchasing a thing is dated. Consumers today desire both the product and the act of making the purchase. And while studies have shown that redesigning your store might increase your revenue, you still need to focus on providing your consumers with a more engaging experience if you want to remain in business in 2021 and beyond.
It is now easier to understand "brands as a culture." Large retailers are all experimenting with small-format or concept stores, including Nike and Ikea. These shops have a small selection of products but offer useful services or well-chosen content. Again, millennials are the driving force behind these modifications, but they are merely the forerunner of changing consumer behavior across other modern generations. Overall, experience-related costs increased by 6.3%.
Retailers should look ahead to the correct technical developments so they can start off strong in 2025 after the busy holiday season. With inflation and pent-up consumer demand producing unique dynamics, retailers have positioned themselves for success in the upcoming year by being adaptable, anticipating these problems and possibilities, and changing their operations to address them. By utilising data and technology, merchants will be able to differentiate themselves from rivals by making data-driven decisions and forging stronger bonds with customers. These techniques include more intelligent inventory management, intuitive pricing strategies, and fulfilling member experiences.
