- Experimentation with AI will grow and become more usable
Whether it’s predictive or generative, you can’t escape the hype about AI. There are so many examples of how AI can be used across sectors to save time, improve productivity, improve customer experience and sell more. And the retail sector is no exception.
However, the reality is that most retailers are not yet in a position to benefit from AI technology due to a lack of data both in quantity and quality. Indeed, many of the ‘new AI tools’, are not ‘new’, they are existing machine learning tools that have simply been rebranded as ‘AI Tools’.
Experimentation with AI will grow in 2025 and will be more usable. It seems every technology vendor has an AI solution, but in 2025 there will be more focus on making those solutions as intuitive and usable as possible.
2. How retailers forecast and plan will change
If the global pandemic taught retailers anything, it was the need to be able to respond to a changing market, quickly. Once a year or even once a season plans when it comes to forecasting demand for stock just doesn’t work today.
Forecasting demand successfully is a challenge for all retailers. Understanding where your items are ordered from (not fulfilled from) enables you to replenish orders quickly and in the right place to ensure less ‘out of stock’ occurrences.
Modern order and inventory management systems maintain real-time synchronisation of inventory data across all warehouses, stores and platforms, offering unprecedented accuracy and reliability. This real-time insight enables retailers to avoid overselling (and underselling) and ensures that advertising efforts align with actual inventory levels, thereby preserving customer trust and reducing wasted ad spend.
Retailers need to be able to plan little and often and be able to adjust their forecasts easily.
- As cost of living pressure continue, retailers will focus on loyalty
In an Australian retail environment defined by heightened competition and consumers tightening their wallets, now more than ever, retailers need to focus on how they retain customers in 2025 and create customer experiences that drive loyalty.
The cost of customer acquisition is rising and that makes it more essential now than ever to ensure technology systems are integrated and that retailers have a unified commerce perspective.
Attracting and winning new customers is hard and expensive for retailers, so keeping existing customers happy, driving loyalty and extracting more revenue from them will be a priority in 2025.
- Budgets for enterprise tech will open, but the business case will be harder
Post Covid, we’ve definitely seen a contraction in budgets for new technologies. The focus has been very much on cost reduction and efficiencies. We are starting to see those budgets open up again from our existing and new customers, but the business cases to get that budget has become harder.
The process to gain additional budget to spend on technology has become more complex and the people who are making the business case have to understand the technology they want to buy.
In 2025 global brands will spend on enterprise tech, but the sales cycle will become longer.
Jamie Cairns is chief strategy officer at Fluent Commerce.