The retail landscape in the United States underwent significant changes from 2023 to 2024, shaped by persistent economic headwinds and rapid technological advancements.
STUDY HIGHLIGHTS
STORE EXPERIENCE Study 2025
By Lee Holman and Dan Berthiaume
Top tech priorities for 2025 include inventory visibility and customer experience personalization
Store IT spend is expected to grow 4.9%
4.9% sales growth forecast for 2025
Mobile devices for managers and employees most sought-after technology for 2025
Store remodels up 4.6% this year
Retailers expect to expand their store counts by 4.2% in 2025
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Read on to discover the state of the store and how it will advance retail’s future, as well as where retail leaders are placing big tech bets to ensure their stores thrive.
85% of all retail transactions still have a store component associated with them
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5G at the store level will be the most-deployed of the emerging technologies by 2027
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Retail's Evolving Landscape
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Retailers are adapting to economic uncertainly by focusing on efficiency and profitability. Many major retailers reported improved gross margins in 2024 despite flat or declining sales, thanks to more efficient inventory management and supply chain operations.
Generative AI is becoming a game-changer, with 75% of retail executives viewing it as instrumental to their business's revenue growth (Accenture). Retailers are investing heavily in artificial intelligence (AI) and merchine learning (ML) technologies to enhance various aspects of their operations, from inventory management to customer service.
The integration of AI is transforming both the customer experience and back-end operations. AI-powered systems are enabling personalized shopping experiences, predicting consumer needs, and automating routine purchases.
In-store, technologies like RFID, smart shelves with electronic labeling, and AI are helping retailers address labor shortages while improving the customer experience.
E-commerce continues to gain market share, forcing traditional brick-and-mortar retailers to adapt their strategies and invest in omnichannel capabilities. The concept of "phygital retail" is gaining traction, blending physical and digital shopping experiences to cater to diverse consumer preferences.
Retailers are focused on enhancing trust and loyalty through personalized experiences and efficient operations. The ability to leverage technology, particularly AI/ML, while navigating economic uncertainties will likely determine which retailers thrive in this evolving landscape.
The year 2024 ended on a positive note despite economic challenges, with retail sales growing 3.6% to $5.29 trillion, according to the National Retail Federation. Non-store and online sales, which are included in the overall total, grew 8.1% to $1.47 trillion. (NRF’s calculation of retail sales excludes automobile dealers, gasoline stations and restaurants to focus on core retail.)
In 2025, economic challenges will continue to impact the retail sector. while sticky inflation remains a concern for both retailers and consumers. The National Retail Federation forecasts retail sales growth of 2.7% to 3.7% for 2025, with “signficant policy uncertainty” affecting the range of its outlook. And while consumers are still spending, they are doing so at a slower pace then in recent past years.
All that said, for 2025, respondents to our retailer survey have a fairly optimistic outlook. Overall store counts are up, IT spend is up, and respondent retailers are more optimistic than NRF’s forecast.
Also, AI continues to make its presence felt in a big way. Top priorities for retailers for 2025 look much like those in years gone by, with personalizing the in-store experience, CRM/Loyalty upgrades, empowering store associates and inventory visibility at the top.
When it comes to non-traditional fulfillment channels (such as BOPIS, Ship-from-Store and Local Delivery), retailers that don’t already have them are planning to adopt, while those that already have them continue to look to optimize those services to recover lost margin.
This year’s study confirms the findings of the past few years, that retailers of all sizes and segments concur that a physical store presence is still a necessary and vital part of the retail landscape. Once again, we see Leaders (respondents with sales growth of 10%+ for 2023-24) opening more stores, doing more remodels, and embracing those technologies that make their operations more efficient and profitable. And we see others following their lead example and attempting to do the work the Leaders did during the pandemic.
In short, in spite of massive headwinds, retailers continue to demonstrate that regardless of the obstacles placed before them, they can improvise, adapt, and overcome.
This study represents the twenty-second year of collaboration between Chain Store Age and IHL Group. As such, it brings the retail industry the definitive study that examines trends for the coming year in terms of technological advances that impact retail operations, growth plans, budgets and planned technology purchases for 2025 and beyond.
The retail landscape in the United States underwent significant changes from 2023 to 2024, shaped by persistent economic headwinds and rapid technological advancements.
Retailers are adapting to economic uncertainly by focusing on efficiency and profitability. Many major retailers reported improved gross margins in 2024 despite flat or declining sales, thanks to more efficient inventory management and supply chain operations.
Generative AI is becoming a game-changer, with 75% of retail executives viewing it as instrumental to their business's revenue growth (Accenture). Retailers are investing heavily in artificial intelligence (AI) and merchine learning (ML) technologies to enhance various aspects of their operations, from inventory management to customer service.
The integration of AI is transforming both the customer experience and back-end operations. AI-powered systems are enabling personalized shopping experiences, predicting consumer needs, and automating routine purchases.
In-store, technologies like RFID, smart shelves with electronic labeling, and AI are helping retailers address labor shortages while improving the customer experience.
E-commerce continues to gain market share, forcing traditional brick-and-mortar retailers to adapt their strategies and invest in omnichannel capabilities. The concept of "phygital retail" is gaining traction, blending physical and digital shopping experiences to cater to diverse consumer preferences.
Retailers are focused on enhancing trust and loyalty through personalized experiences and efficient operations. The ability to leverage technology, particularly AI/ML, while navigating economic uncertainties will likely determine which retailers thrive in this evolving landscape.
The year 2024 ended on a positive note despite economic challenges, with retail sales growing 3.6% to $5.29 trillion, according to the National Retail Federation. Non-store and online sales, which are included in the overall total, grew 8.1% to $1.47 trillion. (NRF’s calculation of retail sales excludes automobile dealers, gasoline stations and restaurants to focus on core retail.)
In 2025, economic challenges will continue to impact the retail sector. while sticky inflation remains a concern for both retailers and consumers. The National Retail Federation forecasts retail sales growth of 2.7% to 3.7% for 2025, with “signficant policy uncertainty” affecting the range of its outlook. And while consumers are still spending, they are doing so at a slower pace then in recent past years.
All that said, for 2025, respondents to our retailer survey have a fairly optimistic outlook. Overall store counts are up, IT spend is up, and respondent retailers are more optimistic than NRF’s forecast.
Also, AI continues to make its presence felt in a big way. Top priorities for retailers for 2025 look much like those in years gone by, with personalizing the in-store experience, CRM/Loyalty upgrades, empowering store associates and inventory visibility at the top.
When it comes to non-traditional fulfillment channels (such as BOPIS, Ship-from-Store and Local Delivery), retailers that don’t already have them are planning to adopt, while those that already have them continue to look to optimize those services to recover lost margin.
This year’s study confirms the findings of the past few years, that retailers of all sizes and segments concur that a physical store presence is still a necessary and vital part of the retail landscape. Once again, we see Leaders (respondents with sales growth of 10%+ for 2023-24) opening more stores, doing more remodels, and embracing those technologies that make their operations more efficient and profitable. And we see others following their lead example and attempting to do the work the Leaders did during the pandemic.
In short, in spite of massive headwinds, retailers continue to demonstrate that regardless of the obstacles placed before them, they can improvise, adapt, and overcome.
This study represents the twenty-second year of collaboration between Chain Store Age and IHL Group. As such, it brings the retail industry the definitive study that examines trends for the coming year in terms of technological advances that impact retail operations, growth plans, budgets and planned technology purchases for 2025 and beyond.
STUDY HIGHLIGHTS
5G at the store level will be the most-deployed of the emerging technologies by 2027
By Lee Holman and Dan Berthiaume
EXPLORE
STUDY
PRESENTED BY
Read on to discover the state of the store and how it will advance retail’s future, as well as where retail leaders are placing big tech bets to ensure their stores thrive.
STORE EXPERIENCE Study 2025
Retail's Evolving Landscape
EXPLORE NOW!
TITLE SPONSOR
The retail landscape in the United States underwent significant changes from 2023 to 2024, shaped by persistent economic headwinds and rapid technological advancements.
Retailers are adapting to economic uncertainly by focusing on efficiency and profitability. Many major retailers reported improved gross margins in 2024 despite flat or declining sales, thanks to more efficient inventory management and supply chain operations.