The holiday season is almost at an end, and as New Year’s Day approaches, thoughts turn to how trends observed in 2024 might persist — or even evolve — as 2025 settles in. As the wrapping paper is bagged up and taken to the curb and the Christmas tree is taken down from its place of prominence and either recycled or placed back in its box, consumers turn from overflowing dinner plates and bright lights to thoughts of the next great sale.
What can we expect from the average American shopper, and the retail businesses that serve them, in the year to come? We asked our BrainTrust members a variety of questions surrounding this broader territory, and a few common themes came into focus as the experts weighed in.
Artificial Intelligence (AI) Is Set To Be a Major Force in Retail Shopping
Perhaps the most common thread running through comments made by our panel of experts was that 2025 may indeed be the year that artificial intelligence (AI) makes a truly indelible mark on the retail industry, both for retailers themselves as well as for consumers increasingly comfortable with the technology.
According to Adam Dumey — global vice president of retail for World Wide Technology — next year will see AI take its place as a central feature of the segment.
“On both sides of the equation, the impact of more sophisticated and pronounced AI-enabled tooling will emerge as one of the defining retail themes of 2025 — retailers will more effectively achieve hyper-personalization outcomes, while consumers will emerge as increasingly discerning and empowered shoppers through accelerated adoption for price intelligence and experience customization capabilities,” Dumey said.
Neil Saunders, managing director for GlobalData Retail, affirmed the above sentiment, focusing on the capabilities AI might place in the hands of an increasingly tech-savvy shopper while also emphasizing the importance of other trending retail opportunities in the tech space.
“As a more micro trend, I expect more tools to be used for product and brand discovery — including AI, social media, and live shopping,” Saunders suggested.
Other industry voices focused on the opportunities presented to retailers in terms of leveraging AI to its maximum potential, including Melissa Minkow, global director of retail strategy at CI&T. Indicating that Americans will likely be even more cost-conscious and price-aware next year than they already are — and that, if enacted, the incoming administration’s planned tariffs could cause prices to soar — Minkow stated that retailers would be wise to capitalize on AI tools to navigate the increasingly complex market, particularly when it comes to pricing strategies.
“Retailers will need to establish pricing strategies as their competitive advantage in order to navigate this, and AI is going to play a key role in helping them do so,” Minkow said.
Clay Parnell, president and managing partner of The Parker Avery Group, appeared to agree with Minkow’s assessment of the importance of AI-based pricing strategies. Beyond that, he also pointed to the importance of utilizing the tech to improve logistics and service standards.
“While there are real benefits for retailers in finding ways to deploy new technologies, including AI-based optimization, the impact on consumers and shopping has to be clear — better inventory availability, optimized pricing, and overall service improvements,” he explained.
With generative AI set to unlock between $240 billion to $390 billion in value for retailers, according to McKinsey & Company, it seems that AI-based tools are certain to become an intrinsic part of the industry sooner rather than later.
The Future of Shopping: Price Is Key, But It’s Not Everything
While many experts agreed with Minkow as to continued price concerns, the notion of a more discerning shopper — and of more discrete, smaller groupings of shoppers demanding personalized marketing from retailers — also commonly cropped up in conversation.
“In some ways, 2025 will see a continuation of the trends we have seen this year. Consumers will be seeking value for money — which does not always mean low prices. They will be seeking value for time, which means using more omnichannel services and more fast-delivery services. They will also be bargain hunting, so will want money off and deals in exchange for their spending,” Saunders said of the retail sector’s immediate future.” As household finances ease, there will likely be some optimism and energy that will modestly fuel indulgent spending. Consumers will remain picky and choosy about where they shop and spend, which means polarization between winners and losers will continue.”
Patricia V Waldron, contributing editor for RetailWire, spoke to the fluidity of demographics in a culture that has placed high importance on customized experiences and customer service. “Retailers and brands will need to continue to be surgical with advertising and promotions that target smaller, more fluid (and frequently more opportunistic) cohorts,” Waldron stated.
The importance of offering choices and utilizing diverse marketing channels to reach a target customer base was also top of mind for panelists, including Cathy Hotka, principal of Cathy Hotka & Associates.
Hotka outlined how retailers will seek more innovative ways to connect with tomorrow’s buyers. “I’m a huge believer in ‘third option’ shopping beyond online and in-person. We’re going to see a huge uptick in shopping via social media, through television shows with interactive ads, barcodes on signs, etc. ‘Third-option’ methods eliminate roadblocks and enable frictionless shopping anywhere. Watch for retailers and brands to come up with new ways to let the consumer purchase things at the spur of the moment,” she said.
Rachelle King, U.S. commerce lead at Google, further emphasized the necessity for retailers to move beyond traditional marketing and outreach — if they want to be successful in the marketplace of 2025 and beyond, at least.
“Digital and mobile commerce will continue to grow and diversify by giving consumers more places to shop than ever before. From expansions in discount and specialty shopping platforms to more last-mile delivery options, consumers’ choices will be king in 2025. Brands will not only need to compete for share of wallet, but also share of mind,” King suggested.
Finally, Lisa Goller, B2B content strategist at Lisa Goller Marketing, imagined a growing divide between two very different sorts of shoppers — those who are ultimately attracted by a value proposition and an appealing price point, and those more enamored by luxury goods and experiences that speak to their taste profiles.
“The growing gap between price-conscious and indulgent shoppers will show up in the bifurcation of advertising in 2025. One branch of advertisers will emphasize deals and low-cost leadership. The other branch will differentiate their brands with superior products and experiences that justify their comparatively premium pricing,” Goller predicted.
Frictionless Shopping, the Rebirth of Brick-and-Mortar Retail, and Mobile Sales
In 2025, customers are likely to demand an easy, no-hassle shopping experience, whether that takes place via an app on their smartphone (like on TikTok Shop, Temu, or Amazon), or in a traditional brick-and-mortar store, our experts said.
“The biggest change I see in consumer shopping habits in 2025 is a return to brick-and-mortar visits. Consumers are tired of playing defense against online shopping scams. This season alone, over 1,000 Amazon-like websites have surfaced to defraud everyday shoppers. The return to in-store visits provides traditional retailers with a ‘do-over’ opportunity with regard to the reasons why customers gravitate to internet shopping. How can physical stores be perceived as more convenient, seamless, assortment-abundant, and checkout and delivery-friendly than online stores? Address these shopper needs, and they will become a continuity of purchase customers,” said Richard J. George, Ph. D., professor emeritus of the Haub School of Business at Saint Joseph’s University.
Perry Kramer, managing partner at Retail Consulting Partners, appeared to concur as to the importance of a streamlined and efficient sales process.
“The growing significance of mobile in the shopping experience we have seen during this holiday season will continue to grow in importance over the next few years. This will have a direct impact on the importance of stores and the evolving tools and experience that consumers will expect in store. The omnichannel experience across the enterprise has become table stakes,” Kramer said.
“Retailers that do not provide a seamless experience — where customers and associates can access accurate inventory data and consumer purchase history in a single place and use the store as a showroom for the consumer who wants to put their hands on a product and then order it on their mobile device — risk falling behind,” he continued.
A third panelist reinforced the notion that a stressless and comfortable shopping experience was of utmost importance, offering up the double-edged sword of an increasingly generous return policy among prominent retailers as one example of a potential pain point. Shep Hyken, customer service/CX expert, elaborated on this score.
“Customers want convenience. Many retailers have created an experience that, for some, is proving to be problematic. Retailers have trained consumers to go online to buy and try, providing liberal return policies. This is starting to backfire as many online purchases are being returned, costing the brand a large percentage of its revenue,” Hyken explained. “In addition to the financial hit, there are also inventory issues that must be managed. In the end, the consumer will pay, but this also puts certain retailers in the precarious position of having to make at least two decisions. The first is to raise prices to cover the returns. The second is to change the return policy. Both of those decisions can create a competitive disadvantage. After all, it’s hard to backpedal on consumer-friendly policies, and what consumer wants to pay more?”
Lastly, Warren Shoulberg, senior contributor for The Robin Report, spoke about the currently fierce competition in the mobile shopping space, particularly with TikTok’s fate in the United States in peril.
“The biggest wild card for the new year is what happens with TikTok. Its shopping component has exploded, but if it is forced to leave the U.S. market or ends up being sold, it will change the playing field enormously. It could open up a void in the retail sphere that others will rush in to fill. Facebook and Instagram have never fulfilled their m-commerce potential the way some people thought, but TikTok is absolutely doing the job. It’s the great unknown for 2025,” Shoulberg said.