The U.S. retail sector is undergoing a period of significant transformation, driven by rapid technological innovation, evolving consumer expectations, and ongoing economic uncertainty.
For finance and operations leaders in the industry, staying ahead of these retail trends means making smarter, data-driven decisions that drive resilience and profitability.
And with retail business failure rates of 13% in the first year and 40% within five years, there’s little margin for error.
In this post, we’ll explore the top retail trends for 2025 and what finance and operations professionals can glean from them to adapt their planning and improve long-term profitability.
2025 Retail Trends at a Glance
Retailers are blending online and offline experiences to create personalized customer journeys, requiring unified commerce strategies and impacting capital expenditures as physical spaces evolve.
The industry is using AI, automation, and other emerging technologies to transform operations through enhanced demand planning and efficiency.
The retail industry faces significant external pressures, including inflation, which demand greater agility, effective financial planning, and seamless operational execution.
Modern consumers prioritize values-driven purchasing and personalized experiences, which requires industry-wide operational shifts toward transparency, ethical sourcing, and community building.
The Phygital Revolution refers to the trend of blending physical and digital experiences to prompt more customer engagement. The trend marks a shift from omnichannel retail strategies to a blended approach that delivers personalization and brand cohesion.
A fashion brand successfully capitalizing on phygital experiences is Zara. As the Michigan Journal of Economics reported, Zara has used:
Smart mirrors: Allow shoppers to scan a product using radio-frequency identification (RFID) and see a holographic image reflected that suggests other products that pair well with the one scanned.
Self-service checkouts: Allow shoppers to scan their own items to check out. Some stores are introducing RFID technology to scan multiple items at once for rapid checkout.
Online order pickup: Allow customers to scan their receipt to pick up online orders in-store. A robotic arm then retrieves the customer’s order from the collection area and delivers it to the waiting customer.
Phygital experiences in retail have significant implications for both financial planning and operational strategies. As more retailers embrace these direct-to-consumer (DTC) models and optimize their phygital footprints, they’re also re-evaluating traditional brick-and-mortar spaces.
Instead of funding large, traditional stores, the trend encourages smaller, more experiential showrooms or localized fulfillment hubs. This directly decreases capital expenditures for maintaining retail locations.
Operationally, the Phygital Revolution requires a complete overhaul of retail supply chains and inventory management. Retailers must have real-time visibility into supply across all channels to facilitate services like buy online, pick up in-store, or ship to/from store.
To meet these needs, businesses can invest in advanced enterprise resource planning (ERP) systems and warehouse automation solutions.
The Phygital Revolution also intertwines a retail company’s marketing and customer experience functions with operations. Personalized marketing campaigns, delivered via digital channels, can drive foot traffic to physical stores. Similarly, in-store experiences can lead to higher online conversions when enhanced by digital elements.
Those in the retail industry must track customer journeys across these touchpoints and calculate customer acquisition cost (CAC) to gain valuable data, optimize marketing spend, improve operational efficiency, and ultimately, drive profitable growth from phygital experiences.
The Phygital Revolution has the power to reshape how retailers operate and engage with their customers. As this level of convenience and technology integration becomes expected, those who don't participate will be viewed as behind the times and not technologically inclined.
A unified commerce strategy helps businesses:
Improve survival rate and growth in the new retail landscape
Integrate all sales channels, data, and back-end systems into a single, cohesive platform
Have insight into every customer interaction and journey, no matter where it originates
Deliver data-driven personalization to enhance the customer experience and drive brand loyalty
Provide a real-time view of inventory to keep your most popular products in stock
Adapt to market or customer behavior shifts to retain profitability
Like many other industries, retail trends in 2025 are influenced by advancements in technology, including AI, automation, augmented reality, and virtual reality. Innovative technology is also helping to transform retail operational efficiency and provide critical insight into the customer journey.
From the back end to the front of the house, advanced technology is helping the retail industry operate more efficiently, optimize profitability, respond to needs and changes more quickly, and connect with customers on a more personal level.
Demand planning is perhaps one of the most impactful areas where technology is shaping retail operations. AI and predictive analytics move beyond historical sales data to deliver highly accurate forecasting reports that take into account:
Real-time sales data
Seasonal trends
Promotional impacts
Local events
Weather patterns
Social media sentiment
Broader macroeconomic indicators
With this data, retailers can quickly respond to changes in demand and prevent costly issues such as over- or under-stocking.
Additionally, retail teams can use AI to help optimize daily workflows to increase productivity and allocate time to other high-demand tasks. In fact, AI statistics show that those who have implemented AI are already gaining more than six hours back in their work week.
Using advanced technology is a key to gaining a competitive edge, improving profitability, and meeting evolving customer expectations.
Retailers should make efforts to fully integrate AI and automation into their operations and customer engagement strategies.
Strategically embracing these tools will help businesses:
Plan inventory more efficiently
Reduce costs
Drive sustainable growth
Develop meaningful connections with customers
Additionally, data gathered from these technologies provides valuable insights for continuous improvement and strategic decision-making, allowing businesses to quickly adapt to market shifts and unforeseen challenges.
The retail industry is currently facing significant pressure from global economic changes, which are affecting supply chains and consumer purchasing behavior. This high-pressure and volatile economic landscape means businesses must be agile in their financial planning and operational strategies.
Top challenges include:
Inflation: A remaining concern due to increasing costs of raw materials, transportation, labor, and other goods and services. Higher inflation can decrease customer spending power and tighten retail industry price margins.
Global economic trade shifts: Already in place and looming threats of tariffs are creating uncertainty around the world and impacting prices. The retail industry will be affected by tariffs, with softline retailers (like department stores) likely seeing the greatest impact.
Supply chain disruptions: Increased tensions around the world — including those driven by tariffs and other geopolitical issues — and an increase in extreme weather events have caused extended lead times, increased shipping costs, and created challenges for retailers in keeping acceptable supply.
Consumer spending patterns: Economic uncertainty, driven by rising prices and a shifting global trade market, means that more customers are seeking value and discounts in the purchases they do make. In uncertain times, consumers are more likely to tighten their budgets and prioritize spending on essentials, a trend that the National Retail Federationetail Federation is already observing.
To navigate these challenges, retailers must make comprehensive FP&A and agile operations strategies their main priorities.
Strategic Implications
To combat the above challenges in this shifting environment, FP&A models must include dynamic, real-time scenario modeling that allows companies to assess the impact of various economic and supply chain disruptions and strategically adjust as needed.
Operationally, retailers should consider:
Investing in advanced supply chain visibility tools
Integrating predictive analytics for proactive risk mitigation
Introducing diverse supplier networks to minimize reliance on single points of failure.
Companies like Schuh have already achieved this, reducing their budgeting time by 50% with the help of Vena.
Additionally, utilizing AI tools for finance can help retail companies improve inventory management and implement flexible pricing strategies. With sales statistics showing an uncertain start to the year, retailers must stay agile to meet their goals and maintain profitability.
The ability to quickly adjust, reallocate resources, and make data-driven decisions in real time will help businesses maintain profitability and market share amidst this volatile landscape.
Modern e-commerce trends focus heavily on the connection customers feel towards your retail company’s brand. With more consumers making value-driven purchases and demanding transparency from brands, it’s essential to clarify your company’s stance on key issues.
This includes:
Maintaining authenticity
Utilizing sustainable practices throughout the company
Practicing fair labor
Sharing your brand’s social impact
These consumer expectations mean retailers that continue to operate purely on a transactional basis risk lower customer retention rates.
Companies should integrate these values and how they’re executing on them into their core operations and supply chains, demonstrating a genuine commitment to responsible practices.
Additionally, customers are seeking more engagement, entertainment, and a sense of community from their interactions with brands. Whether this is in-store, an immersive phygital experience, or online, operations teams should aim to promote genuine customer interactions. Building a relationship with your customers will make them more loyal to your brand, increasing their customer lifetime value.
To help account for the evolving customer and their desires, your brand should prioritize supply chain visibility and traceability, working to verify and communicate the ethical and sustainable origin of its products
This might involve investing in blockchain technologykchain technology for transparent sourcing or partnering with certified ethical suppliers.
Building brand loyalty with authentic customer relationships and personalized experiences means understanding individual customer preferences and behaviors across all touchpoints.
Operations must be flexible enough to:
Support customized product offerings
Provide efficient fulfillment for personalized orders
Enable a comprehensive data infrastructure and analytics
Include responsive customer service channels that operate across social media and other platforms
Future success in the retail industry depends on a data-driven approach that recognizes how the phygital revolution, advanced technologies, global economic shifts, and evolving consumer expectations all interconnect.
Success in the modern retail sector is about constantly refining operations and customer touchpoints to remain relevant and competitive in a dynamic market. To achieve this, retailers require access to unified, real-time data.
Grow your retail business by:
Prioritizing unified commerce strategies
Investing strategically in AI and automation
Building resilient and agile supply chains
Understanding and catering to evolving consumer values
Leveraging data for predictive insights and strategic decision-making
Vena helps you unify data from critical sources, such as your ERP, CRM, and point of sale (POS) systems, into a unified database for flexible modeling.
A comprehensive FP&A solution, like Vena, can help retailers gain the necessary visibility, agility, and control to navigate these complex trends.
Source List:
Vena (2024). What Percentage of Businesses Fail? Averages by Time, Industry and Locale. Retrieved from https://www.venasolutions.com/blog/what-percentage-of-businesses-fail
Michigan Journal of Economics (2025). AI-Powered Fashion: How Tech is Reshaping the Future of Zara’s Fashion Empire. Retrieved from https://sites.lsa.umich.edu/mje/2025/04/04/ai-powered-fashion-how-tech-is-reshaping-the-future-of-zaras-fashion-empire/
Vena (2025). 100+ AI Statistics Shaping Business in 2025. Retrieved from https://www.venasolutions.com/blog/ai-statistics
Morgan Stanley (2025). Tariffs Hit the Shelves. Retrieved from https://www.morganstanley.com/insights/articles/tariff-impact-retail
National Retail Federation (2025). CNBC/NRF Retail Monitor Shows Sales Slowed in June as Concerns About Tariffs Continued. Retrieved from https://nrf.com/media-center/press-releases/cnbc-nrf-retail-monitor-shows-sales-slowed-in-june-as-concerns-about-tariffs-continued
Vena (n.d.). Schuh Uncovers Sales Insights, Reduces Budgeting Time by 50% With Vena. Retrieved from: https://www.venasolutions.com/customer-stories/schuh-reduces-budgeting-time-50-percent
RevContent (2025). 7 Key Ways Brands Are Making Value-Based Decisions. Retrieved from https://www.revcontent.com/blog/7-key-ways-brands-are-making-value-based-decisions
Vaayu (n.d.). Supply Chain Traceability: Transparency in Retail. Retrieved from: https://www.vaayu.tech/insights/supply-chain-traceability
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