Retailer trends to watch in 2025
South African retail is a highly competitive, fast-paced and rapidly evolving market.
Therefore for retailers to not only survive, but actually thrive, they need to ensure constant adaptation and innovation to meet the needs of consumers
The Nedbank Group said that “retail has always been a fast-paced, intensely competitive operating environment but, like many things these days, things seem to be moving at break-neck speed and faster, better, stronger innovations are raising the competitiveness stakes.”
As such, Karen Keylock, national retail services manager at Nedbank Commercial Banking, has shared “three trends that should be on your to-do list for 2025 if you want your retail business to prosper.”
These include:
- Artificial intelligence (AI);
- Omnichannel retail; and
- Modernised systems to support AI and omnichannel retail.
Artificial Intelligence (AI)
First, Keylock said that leveraging AI for personalised customer experiences and improved operational efficiency is crucial for driving growth and competitiveness in 2025.
AI analyses vast amounts of customer data, including shopping history, demographic information, social media engagement, browsing habits and more, to personalise the customer experience.
This shift from generic recommendations to “intuitive, relevant, and personalised” experiences is key for meeting customer expectations, said Keylock.
For example, the 2022 Salesforce “State of the Connected Customer Report” shows that 73% of customers anticipate personalised retail offers – “so the pressure is on.”
According to research from Swiftly, personalisation, powered by AI, translates to a “40% increase in revenue” for retail businesses.
For instance, Kauai business development director Guy Le Ray Cook said at a recent event hosted by Nedbank and Franchise Coaches that the company leverages AI-driven digital platforms to provide “hyper-personalisation and the use of data to benefit and drive customer engagement.”
This has resulted in enhanced customer loyalty and higher engagement.
Keylock also underscores the value of AI-driven insights in strategic decision-making, such as identifying optimal locations for new stores and optimising profitability by analysing production variances and forecasting demand.
According to a McKinsey paper published in 2022, AI demand forecasting can lead to a 20-50% reduction in supply chain errors and up to a 65% decrease in lost sales.
Omnichannel retail
Keylock describes omnichannel retail as a key strategy for growth and competitiveness in the retail industry.
This approach involves providing a consistent shopping experience across all channels – online, in-store, and via apps – making it easy for customers to switch between them seamlessly.
The retail service manager at Nedbank emphasises that customer preference is driving the shift towards omnichannel retail, with Salesforce reporting that 71% of customers express a desire for such experiences.
Omnichannel retail also offers benefits for businesses.
According to Salesforce, companies that adopt omnichannel customer engagement strategies retain 89% of their customers and experience higher customer loyalty, with 83% of shoppers expressing greater loyalty to these companies.
While in-person shopping remains popular, mobile devices are becoming increasingly dominant in online shopping, accounting for 34% of shopping in South Africa.
“Social commerce continues to gain global traction,” with 78% of South Africans having made purchases through social commerce platforms. said Nedbank.
The reach and immediacy of social commerce position it as a crucial element for consumer brands and thus Keylock underscores the need for retailers to adapt to these evolving customer preferences and integrate mobile and social commerce into their omnichannel strategies.
Systems to support AI and omnichannel
Finally, modernising existing systems is necessary to fully support AI and omnichannel strategies, ensuring data accuracy and enhanced customer trust.
Even if existing systems are functioning adequately, Nedbank cautions that retailers may struggle to exploit the full potential of these technologies without modernisation.
Point-of-sale (POS) systems are particularly valuable in this context.
They serve as a primary source of the rich customer data needed for AI analysis, personalisation, demand forecasting, and inventory management. However, their efficacy hinges on interconnectivity, enabling seamless omnichannel experiences and real-time data accuracy.
This is crucial not only for operational efficiency but also for building customer trust.
“If you provide stock and pricing information for products online, accurate and real-time data contributes toward customer confidence in your brand,” said Keylock .
This data can also be used to enhance customer engagement through upselling and personalised promotions.
App modernisation is similarly important, extending beyond merely keeping pace with technological trends.
It is about “enhancing security, increasing flexibility, and improving the performance of your business, ” said Keylock.
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