2025 Retail Trends: Omnichannel, Gen Z, Personalization
Last updated January 15, 2025The retail industry never stands still. Channels are constantly changing, spending power is shifting, and customer engagement is in constant flux.
Art Sebastian – CEO of NexChapter, former VP of Casey’s, Meijer, and Kraft, and a Treasure Data executive advisor – has worked in the industry for over 25 years and helps retailers and brands keep pace with the change that is taking place. On our recent webinar, Unlocking Retail’s Future: CDPs and the Power of Data-Driven Strategies, Sebastian shared three trends impacting retail’s future and explained how a customer data platform (CDP) can help address those trends and meet the demands of consumers now and in the future.
Discover the top trends for retail in 2025 from Art Sebastian, CEO of NexChapter and a former VP at Casey’s, Meijer, and Kraft
Connection is driving strong retail sales
U.S. retail sales were strong in 2024 compared to the prior year. This growth was partly due to a strong labor market, lower inflation, and a resilient customer. Most of the data Sebastian shared is related to the US, but it can be easily extrapolated to other countries and markets.
In addition, e-commerce and in-store are no longer considered separate; instead, they complement each other through omnichannel experiences.
Successful retailers are showing value to consumers and trying to connect on a more individual level. It’s these retailers who understand the trends shaping retail in the coming year.
Three trends shaping retail in 2025
Sebastian shared three trends shaping retail this year: omnichannel experiences, the shift in spending power across generations, and the increasing need for personalization. Let’s look at each one a bit closer.
The power of omnichannel: Shop more, spend more
Your customers are finding and engaging with you on multiple channels. But it’s more than multi-channel; it’s omnichannel, meaning they interact on multiple touchpoints to help them make a single purchase. A recent study found that 73% of retail shoppers are omnichannel. Another study found that omnichannel customers shop 1.7 times more than single-channel shoppers, and they spend more, so it’s essential to provide a seamless experience across all channels and touchpoints. Customer data enables true omnichannel experiences.
Sebastian said there are a couple ways we see this in action:
- Click and collect will reach $110 billion in 2024, with three-quarters of that from grocery. In-store pickup is growing, and 44% of in-store pickup customers purchase additional items when they pick up their orders, resulting in higher average order value (AOV). Target expanded its curbside pickup in August, and in the UK, Tesco is continuing its click-and-collect program.
- Delivery continues to grow thanks to its speed and ease. This includes same-day delivery from services like Instacart and restaurant delivery services like DoorDash and Uber Eats. Sebastian said there are many delivery services outside the US as well.
There’s also a lot of delivery innovation, such as drone delivery, smart packaging that actively engages the product to preserve quality, freshness, and shelf life, and connective packaging, where customers get real-time information about their parcel.
Innovation is also happening in-store. For example, Walmart is expanding electronic shelf labels (ESLs) to 2300 stores. ESL enables dynamic and personalized pricing (which is not without controversy, Sebastian notes) and reduces labor costs and printed price tags. Several retailers are experimenting with robots that can scan store shelves to identify stock levels and inspect shelf execution. Even Instacart is trying new experiences to digitize the physical shopping cart with capabilities like gamification, location-based coupons, and aisle-aware advertising.
“In the most simple terms, this is about delivering a seamless experience across all the touch points. It’s about having your brand show up very consistently across all channels, whether it’s email, social media, SMS, or an app push. It has to be consistent. And finally, giving your customers multiple ways to shop, and they can order, they can return, they can interact with the retailer. All of this needs to be enabled by customer data to ensure the richest experience for consumers.” –Art Sebastian
Gen Z: Understanding the new power spenders
Spending power is shifting, and in 2025, marketers will need to adjust their strategies to meet the needs of Generation Y (better known as millennials) and Generation Z. Together, these two groups hold 36.6% of the spending power, and marketers will need to understand them better.
Sebastian explained that Gen Z has constant access to the internet, and they see the physical and digital world as one, performing extensive research at home and in-store. They price compare, look to social media (like TikTok) and influencers for recommendations, and use their smartphone for everything.
Gen Z is also concerned about data privacy and is taking steps to protect themselves against companies they don’t believe can keep their data safe, such as anonymous browsing and blocking cookies. However, if they trust a company, they are willing to exchange their data for more personalized, elevated experiences.
Marketers must work hard to create the experiences this generation demands, but those experiences also generate a lot of data that can inform better marketing decisions.
Personalization: Key to customer loyalty
The 2024 State of Customer Service and CX Study shows it clearly: 81% of customers want a personalized experience, and 70% said that it’s important that an employee knows them and their history with the company.
Delivering personalized experiences remains challenging for many retail companies for a few reasons:
- Data fragmentation is a serious challenge. Many companies don’t know what data they have or where the data they need is located. As a result, inaccurate reporting and poor decision-making lead to bad experiences.
- Walled gardens prevent marketers from combining all the data they need to make better decisions. This is especially true for social media platforms, which have a wealth of data from paid media.
- Consumers can choose the ads they receive and what information companies can access to personalize experiences.
- Privacy regulations are increasing. To date, 19 U.S. states have enacted comprehensive consumer privacy bills that can impact how companies manage customer data and deliver experiences. If the regulatory landscape becomes more and more complex and fragmented, the compliance challenges only increase.
- Cookie deprecation is an ongoing issue that may never be completely resolved. Marketers must find other ways to capture important data.
What do all these challenges mean? They point to a compelling need for first-party data, which a customer data platform can help address.
Overcoming data challenges with a CDP
Implementing a customer data platform creates value across the organization, helping marketers address these retail trends and create the experiences customers expect today. The CDP unifies first-party data from all your systems, giving you a single view of the customer. You can then enrich that data with supplementary data from zero-, second-, and third-party data sources, improving data accuracy and reliability. You can also add unstructured data from primary research.
With a CDP built for large retailers like Treasure Data, you can identify high-value audiences and create real-time personalized interactions through messaging, offers, recommendations, and content. One example Sebastian provided involved consumers who use a loyalty card at the gas pump. While filling up, the company could trigger an SMS message for an energy drink and have the pump play an associated ad. When the consumer goes in to pay for their gas, they buy the drink and other impulse purchases, increasing the company’s gross profit. Sebastian said this type of triggered campaign can generate enough ROI to cover the cost of your CDP investment.
As the relationship grows, you gain deeper insights into the customer, their shopping behaviors, and interactions and find ways to drive business growth. Another great example involved creating a segment of loyalty members who are also email subscribers, morning shoppers, and who buy coffee but have never bought a breakfast sandwich. With a targeted email offering a 50% off coupon for a breakfast sandwich, you can influence specific behavior and spark incremental gross profit.
Grocery stores and retailers are also good examples of companies with a high frequency of purchases and a lot of customer data that are using CDPs to explore segments on the fly to determine opportunities, create triggered campaigns, and when ingested by a CDP deliver personalized experiences across the entire customer lifecycle.
Unlock your data’s potential with a CDP and transform your retail business
Sebastian said there are many trends to watch regardless of your industry. For retailers and CPG brands servicing retailers, omnichannel, generational spending shifts, and personalization should be top of mind.
What helps you address these trends and deliver the experiences your customers demand is your data. Customer data is now your number one asset, and you need to manage it properly. A customer data platform helps you unify, enrich, grow, and activate your customer data.
Start with small practical use cases that deliver immediate business value and impact. Working together, marketing and IT can drive the innovation needed to propel revenue growth.
