Looking ahead to 2025, retailers that integrate advanced logistics, leverage real-time data, and diversify delivery options will be better positioned to retain customers—and, ultimately, grow, according to Shippit co-founder and co-CEO, Rob Hango-Zada (above).
“In 2024, the debate between prioritising customer acquisition or retention is giving way to a more nuanced reality – successful retailers must excel at both, with retention taking a slight edge,” he said.
“Understandingwhat drives both is critical. Data from Shippit’s State of Shipping Report underscores this shift. Over half of customers won’t return to a brand after a poor delivery experience. This makes seamless, reliable delivery crucial to fostering loyalty and repeat purchases.
“Investing in retention is not only about keeping customers satisfied; it’s a cost-effective growth strategy. Retaining customers costs up to five times less than acquiring new ones, and loyal shoppers spend 67% more than first-time buyers over time. However, acquisition remains vital for growth, especially as e-commerce competition intensifies and new players like Temu and Amazon expand.”
Zoho director of AI, Ramprakash Ramamoorthy believes the potential of AI will accelerate in 2025 as retailers start tapping into Large Language Models (LLMs) designed specifically for business needs.
“AI has already begun reshaping the retail landscape, but in terms of its full potential, we’ve barely scratched the surface. Most LLMs on the market today are built for consumers and have limited utility for businesses. However, business-specific LLMs will offer deeper contextual understanding and opportunities for growth,” he said.
“Today, most of the retailers that are using AI are doing so in fairly rudimentary ways, for example to write product descriptions or marketing content. Powered by business-specific LLMs, we’ll see more retailers using AI to integrate formerly disparate tools or processes, enhancing customer service automation, deploying personalised marketing, or streamlining inventory management.”
Among the many trends that will play out in 2025 will be bricks-and-mortar retail continuing to go from strength-to-strength, is the opinion of Lightspeed senior director of marketing for Asia Pacific, Simon Le Grand.
“While e-commerce penetration continues to surge, it’s not necessarily coming at the expense of bricks-and-mortar retailers. According to Lightspeed research, around three-quarters (76%) of Australian shoppers continue to favour in-store shopping,” he said.
Consumers favour the physical retail environment for a number of reasons including the ability to see products in real life (56%), to avoid shipping costs (53%) and being able to compare similar items in person (46%).
“With shoppers clearly still eager to shop in-store, the ways in which retailers utilise their physical stores in more creative ways will be fascinating; whether that’s product demonstrations or classes, snap sample sales, collaborations with other brands or something else entirely,” Le Grand said.
Zeller head of growth, Josh McNicol predicts 2025 to be the year of accessible omnichannel for Australian retailers of all sizes, compared to recent years where it’s exclusively been large retailers benefitting from access to the most innovative payments, point-of-sale, and checkout technology.
“With recent advancements in payments technology such as Tap to Pay and greater accessibility to a wider range of POS and payment solutions available in Australia, we’re excited to see small and medium sized retailers, deploy new technology that helps them offer and sell their products in more places, streamline the checkout experience, and offer exciting and innovative experiences to meet the customer expectation for convenience and speed,” he said.
According to monday.com go-to-market lead for Asia Pacific & Japan, Gavin Watson, retailers that embrace the shift towards hyper-personalised marketing will come out on top as consumers exercise greater control over their purchasing decisions.
“Loyalty programs, for example, have become a critical strategy, blending data insights with personalised offers to meet individual preferences and build stronger connections,” he said.
“One of the biggest challenges for retailers is understanding and leveraging data, which is often siloed across organisations. The abundance of data can be overwhelming, and many retailers need help to use it effectively. In 2025, there will be a move beyond isolated data systems to implement unified tools, including AI-driven platforms, that unify their information, enabling retailers to analyse and customise experiences.”
Rippling vice president and head of Asia, Matt Loop believes the Fair Work Commission’s review of modern awards in 2025 will be a game changer for the retail industry.
“Its ambition to simplify part-time arrangements and offer more predictable hours for employees has the potential to address high turnover and labour shortages– two challenges that have long held back the sector,” he said.
“However, regulatory change alone won’t solve these longstanding challenges. Retailers must seize this opportunity to rethink workforce management, balancing operational needs with employee expectations for flexibility and stability. Critically, the review paves the way for more flexible working arrangements like compressed schedules, staggered shifts, or other innovative ways of balancing operational demands with employee wellbeing.”