The year 2024 has been marked by significant developments in the retail sector, with trends that continue to shape the future of commerce. As we look toward 2025, it becomes necessary, even essential, to understand the current dynamics and future prospects to remain competitive in this ever-evolving field.
Key Trends in 2024
1. Digitalization and Omnichannel Strategy
Omnichannel: In 2024, omnichannel has become a necessity for retailers. Consumers expect a seamless experience across all channels, whether physical or digital. According to the WARC Observatory, retail media is expected to reach $153 billion in 2024. In France, retail media accounts for 11% of the online advertising market.
Customer Experience: Customer experience remains a priority. Retailers are heavily investing in technologies to track deliveries and ensure order traceability, thereby enhancing transparency and customer satisfaction.
2. Sustainability and Circular Economy
Second-hand and Rental: The demand for second-hand products and rental services has surged. A 2024 ThredUp study indicates that the resale market is expected to double within the next five years. Additionally, the clothing rental market, valued at $1.77 billion in 2024, is projected to reach $2.47 billion by 2029.
Eco-friendly Practices: Consumers are increasingly sensitive to sustainable practices. Retailers must integrate eco-friendly initiatives into their business models to meet this growing demand.
3. Technological Innovation
Artificial Intelligence (AI): AI plays a crucial role in hyper-personalizing the customer experience. A study by Grand View Research predicts the global AI retail market will reach $18 billion by 2025, with an annual growth rate of 25%.
Phygital: The combination of physical and digital, or "phygital," is becoming increasingly popular. In-store virtual reality (VR) devices create more dynamic and engaging shopping experiences. Mixed reality is expected to emerge in 2025.
4. Security and Compliance
Cybersecurity: With the rise of cyberattacks, security and compliance are no longer optional. In 2023, 72% of companies increased their cybersecurity investments, a trend that continued in 2024.
Distributed Cloud: The adoption of distributed cloud technology is expected to surpass 90% by 2025, becoming a standard in the sector. For those unfamiliar, distributed cloud is a revolutionary concept in retail:
Faster Processing: Data is processed closer to customers, speeding up applications and enhancing online shopping experiences, such as real-time product recommendations.
Greater Reliability: If one server fails, others take over, minimizing service disruptions.
Enhanced Security: Sensitive customer data is better protected through geographic distribution.
Compliance with Local Regulations: Businesses can store data in regions that adhere to specific local regulations.
In summary, distributed cloud enables retailers to be more agile, responsive, and better equipped to serve customers worldwide. It's akin to having multiple warehouses globally to deliver products faster and more efficiently.
Outlook for 2025
1. Automation and Emerging Technologies
Cashier-less Stores and Automated Warehouses: By 2025, cashier-less stores and automated warehouses will proliferate. Amazon's "Just Walk Out" technology has inspired many competitors, and robots are becoming common in stock management and order fulfillment.
Autonomous Delivery: Autonomous delivery vehicles are becoming a reality, transforming retail logistics, particularly in the United States. While France adopted a strategy for autonomous vehicles in 2022, testing is still underway, such as Carrefour's experiments in Saclay. These tests aim to ensure that vehicles, routes, operating systems, and supervisor skills meet safety standards. Despite economic and technical challenges, autonomous delivery vehicles are seen as a potential solution for underserved peri-urban areas.
2. Extreme Personalization
Hyper-personalization: Extreme personalization will continue to dominate, with tailored recommendations, virtual try-ons, and customized tutorials for every customer. This trend, already prominent in 2024, is expected to intensify in 2025.
3. Diversification of Payment Solutions
Payment Flexibility: In 2025, diversifying payment solutions will be crucial to meeting customers' varied needs. Retailers must offer multiple payment options to simplify the buying process and enhance the customer experience.
4. Subscriptions and Customer Loyalty
Subscription Model: The subscription model will continue to grow, becoming a powerful loyalty tool. The global subscription market, estimated at over $200 billion in 2021, is projected to reach nearly $500 billion by 2025.
Conclusion
The year 2024 has seen significant advancements in retail, with strong activity in digitalization, sustainability, and technological innovation. Looking ahead to 2025, retailers must continue adapting to these emerging trends to remain competitive and meet evolving consumer expectations. Automation, extreme personalization, and diversified payment solutions will be key elements for success in the retail landscape of tomorrow.
Written by Sébastien GENTY
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