2025 Top 8 Trends and Priorities for Retail

The Challenge

Overcome legacy system barriers.

Legacy systems hinder retailers from integrating new technology, requiring complex and costly workarounds. These systems do not support real-time data processing and they come with security risks and inefficiencies. Additionally, they may not be able to handle increased volumes of data or meet functionality needs.

Why It Matters

Embrace Exponential IT growth.

The acceleration of digital transformation is crucial for retailers to drive revenue, improve margins, and remain competitive. Emerging technologies like AI, generative AI, the Internet of Things (IoT), and in-store innovations are vital for operational efficiency and customer engagement. The time to act is now, as exponential technologies compress the time available for companies to differentiate themselves.

The Solution

Prioritize modernization

Focus on modernization to maintain competitiveness in a rapidly evolving market and ensure a smooth transition to new technologies. This allows the business to maximize the benefits of digital transformation.

Integrate AI and IoT

Streamline operations and improve service delivery by integrating AI and IoT within operations. This involves modernizing IT estates to support these technologies.

The Challenge

Navigate application rationalization.

Legacy systems pose security risks, may perform poorly, and cannot handle increased data volumes or real-time processing. They struggle to connect with new technologies and hinder the adoption of AI, predictive analytics, and generative AI. Determining the rationalization for these systems is crucial for improving agility, scalability, and innovation.

Why It Matters

Retail transformation relies on modern applications.

Modernizing applications is essential for retailers to drive growth and remain competitive, as a modern application portfolio enables seamless omnichannel experiences, personalized offerings, and highly efficient operations that are necessary to keep pace with the ever-evolving industry.

The Solution

Build the case for modernization

Demonstrate how modern applications can drive value and improve operational efficiency through an application rationalization method. This will equip CIOs with the business case for modernization, project prioritization, benefits, and costs.

Embrace AI and cloud capabilities

Integrate AI and generative AI to enhance application development and drive productivity. Optimize costs, reduce sprawl, and enable "as a service" cloud capabilities for greater flexibility and scalability.

The Challenge

Tackle cost pressures in a competitive market.

Retailers face increased cost pressures from inflation, economic uncertainty, rising operational costs, and eroding margins and profitability. The optimization of business units can only happen by implementing new technology to cut costs and quickly adapt to market changes. Economic uncertainties, supply chain volatility, and intense competition make cost optimization crucial for survival and growth.

Why It Matters

Leverage exponential technologies.

Drive cost optimization to reinvest savings in innovation and growth, leveraging exponential technologies like ML and Gen AI. These technologies open new possibilities for competitive differentiation and operational efficiency. By freeing up resources through cost optimization, businesses can invest in key growth initiatives and strategic activities, gaining a competitive advantage.

The Solution

Streamline processes and reduce waste

Be relentless in finding opportunities to reduce costs, streamline processes, and minimize waste. Emphasizing lean operations and automating wherever possible can significantly reduce labor costs.

Invest in sustainable practices

Invest in sustainable practices to achieve long-term returns and enhance the company's reputation. Vigilant supplier management and continuous improvement in sustainability are essential for maintaining a competitive edge.

The Challenge

Enhance forecast accuracy and supplier relationships.

Enhancing supply chain visibility and optimizing processes are key imperatives for retailers and wholesalers. Optimized, demand-driven supply chains are more resilient to disruptions and better equipped to handle unexpected challenges.

Why It Matters

Achieve resilient and efficient supply chains.

Optimized supply chains consistently predict and meet changing customer demands, effectively dealing with supply chain and market perturbations. This is crucial for meeting customer expectations, reducing costs, improving margins, forecasting demand, managing inventory, and logistics.

The Solution

Sense and respond to fluctuations

Diversifying procurement strategies and identifying supply chain risks are key objectives for modern retailers and wholesalers. Organizations that sense, predict, and respond quickly to fluctuations in supply and demand will gain an advantage.

Invest in digital control towers

Work with business partners to build the case for investing in digital supply chain control towers. These control towers provide end-to-end visibility, quickly identifying issues and facilitating collaboration for timely resolution.

The Challenge

Navigate the omnichannel maze.

The modern customer demands a seamless experience whether they are shopping online or in store, but retailers face obstacles like limited budgets, complex integrations, and organizational silos. Additionally, many retailers are still running legacy systems, making it even harder to integrate online and offline channels and processes.

Why It Matters

Consistency is imperative.

Creating a consistent customer experience across all channels is essential for modern retailers and wholesale distribution companies and requires optimizing e-commerce platforms, inventory management, mobile apps, in-store technologies, planning and forecasting, and pricing and merchandising.

The Solution

Prioritize strategically↵Collaborate with business partners to prioritize aspects like e-commerce platforms, store and fulfillment options, supply chain optimization, and marketing. Align these priorities with the business context, current maturity, and long-term vision.

Unify online and offline experiences

Invest in unifying online and offline experiences using advanced CRM and e-commerce platforms. This ensures a consistent customer experience across all touchpoints. Optimize inventory management, mobile apps, in-store technologies, planning and forecasting, and pricing and merchandising.

The Challenge

Bridge omnichannel gaps.

Enhance relationships with existing customers by aligning organizational goals across different departments such as finance, product, and supply, allowing for the right product, place, price, and promotion. This involves overcoming obstacles like limited budgets, complex integrations, and organizational silos.

Why It Matters

The power of personalization.

Hyperpersonalization, frictionless transactions, community engagement, ethical practices, and loyalty programs will set future retail and wholesale leaders apart. The customer experience is now a dynamic, multidimensional interaction across channels, directly impacting a brand's reputation and turning satisfied customers into brand ambassadors.

The Solution

Create seamless and frictionless experiences

Focus on identifying technologies that create seamless and frictionless experiences for customers. This involves ensuring smooth transactions across all channels and providing higher levels of personalization.

Leverage advanced analytics and personalization

Translate customer preferences into actionable insights to enhance the overall customer experience by using advanced analytics. AI and ML will play a significant role in driving hyperpersonalization to meet unique customer needs.

The Challenge

Extract value from data overloads.

Retailers are inundated with vast amounts of data, but turning this data into actionable insights remains a significant challenge. Leverage data and analytics to facilitate decision-making, enhance customer loyalty, streamline operations, and adapt to market changes. This increasing volume of data requires secure, high-performance infrastructure and tools to produce these insights.

Why It Matters

Harness the power of insights.

Data and analytical insights are crucial for maintaining a competitive edge in the rapidly evolving retail and wholesale ecosystem. This helps retailers understand customer behavior, optimize inventory management, develop effective pricing strategies, improve loyalty, identify trends, and enhance operational efficiency.

The Solution

Develop data literacy and governance

Focus on building strong competencies in data literacy and governance by investing in training and education to ensure employees understand how to use data effectively. Establish robust data governance frameworks to help maintain data quality and integrity.

Leverage advanced analytics

Extract meaningful insights by investing in advanced analytics capabilities and using AI and ML to analyze customer data, supply chain data, and market trends. These technologies will enable retailers to personalize customer experiences and make data-driven decisions.

The Challenge

Combat cyber threats.

Retailers face increasing security risks due to cyberattacks and data breaches, exacerbated by outdated and legacy systems. The expansion of omnichannel capabilities and customer data adds pressure to improve security and privacy measures. Protecting customer data, financial transactions, and supply chain information is crucial as AI expands the cyber threat landscape.

Why It Matters

Safeguard trust and resilience.

Today's digitally driven retail and wholesale landscape requires a robust security posture to stay ahead of bad actors and ensure business resilience. Effective security measures protect customer trust and maintain the integrity of financial and supply chain information. As cyber threats evolve, advanced tools and agility are critical to maintaining a secure environment.

The Solution

Develop proactive security measures

Stay vigilant with updates and patches and implement new firewalls and antivirus protections. Back up critical data and develop a comprehensive cyber response plan to minimize vulnerabilities and protect company assets.

Implement advanced compliance and protection

Protect personally identifiable information (PII) and improve compliance through advanced activities like red teaming and breach and attack simulation. These measures ensure that security protocols are robust and can withstand sophisticated cyber threats.