2024 was a tumultuous year for retailers, with the country experiencing one of the hardest retail recessions experienced in years. As the e-commerce industry moves through its growing pains, staying ahead of the curve is essential for businesses to stay afloat in a competitive marketplace. We look at the top five retail predictions.
As Australia’s leading e-commerce resource, Power Retail, is proud to collaborate with Checkout.com on The Future of Ecommerce Report, created to deliver expert-led insights in the world of retail for 2025.
Packed with exclusive insights from ten leading ecommerce experts and industry professionals, The Future of Ecommerce by Power Retail is a 29-page report highlights top predictions for the year ahead and their implications for retail businesses aiming to thrive in 2025. Here we’ve compiled the top five predictions:
Experience Driven Consumerism
Reflecting on the “Taylor-mania” phenomenon from earlier this year, when Taylor Swift’s Eras Tour had a chokehold on Australia, it pointed to how this event epitomized a broader shift in consumer behaviour.
Power Retail Editor Rosalea Catterson says, “The fact that Taylor Swift tickets, themed outfits, and hospitality experiences sold out around the country while the cost-of-living pressures mounted, really proves that people are willing to put their wallets where their interests, values, and things that spark joy are.”
In 2025, we’ll see retailers capitalising on this through interactive pop-up stores, experiential in-store events, and loyalty programs that reward engagement, as consumers increasingly seek out shopping experiences that go beyond transactions.
Loyalty Programs
Expanding on the role of loyalty programs, in 2025, they will continue to play a pivotal role in addressing consumer priorities amid rising cost-of-living pressures.
Sarah Richardson, Chair of the Australian Loyalty Association shares, “Shoppers are increasingly focusing on value and transparency, so will be accessible programs that offer clear value through regular discounts, cashback, and simplified points redemption. Expanding earning opportunities, such as multiplied points or exclusive promotions, are also great opportunities for brands to make a significant impact with their loyalty programs.”
For Gen Z in particular, programs that integrate flexible payment options like BNPL, will further stand out, aligning with the demand for innovative and accessible loyalty solutions.
AI in Retail
AI will have a transformative impact on retail in 2025, as it will continue to reshape customer experiences and aid backend operations. In fact, when Power Retail polled their network of retailers, 100% of respondents said that they are embracing AI as they head into 2025.
Irving Lee, APAC Retail Industry Lead at Microsoft predicts, “On the customer-facing side, 2025 will see conversational commerce take flight, shifting shoppers from traditional “scroll-based” browsing to interactive ‘goal-based commerce.’ For leading ecommerce companies, AI shopping assistants will shift customers away from the basic search bar towards an interactive and highly personalised shopping experience. Similar capabilities will streamline and improve customer service post-purchase.”
Additionally, AI’s ability to analyse data from richer customer interactions will enable retailers to customize content dynamically and even influence product design and development.
Cross-Border Payment Solutions Taking Aussie Retailers Abroad
In 2025, more Australian retailers will look to expand internationally, driven by rising global consumer demand and the digital economy’s borderless opportunities. Optimised cross-border payment solutions—offering streamlined currency conversion, local payment methods, and compliance with international regulations—will play a pivotal role in this growth.
Brian Sze, APAC General Manager at Checkout.com says, “Supporting local acquiring of these methods, intelligent routing, and efficient currency conversion will help to reduce transaction costs for all parties, improve acceptance rates, and create a smoother checkout experience for international customers. Retailers with global-ready payment infrastructures will find themselves well-positioned to attract and retain customers worldwide.”
Increased Data Transparency
In 2025, stricter privacy laws under the Privacy and Other Legislation Amendment Bill 2024 will push Australian retailers to prioritize data transparency.
Customers will demand clarity on what data is collected, how it’s used, and the ability to opt in or out. Retailers will be forced to address the risks of retaining unnecessary data, and will need to adopt policies to destroy it after reasonable periods.
Alita Harvey-Rodriguez, Managing Director at MI Academy says, “We will all need to be a lot more transparent and responsible with customer data. The amendments confirm the Government’s view that entities have a responsibility to protect Australians’ personal information and not treat it merely as a commercial asset. We saw the Optus and the Medibank debacle, where hackers were able to get critical information like passport and Medicare information. Showing how risky it is to hold onto customer information that isn’t needed over a long period of time.
Retailers are guilty of this too. Keeping information that’s unnecessary for potential commercial use. To avoid getting into hot water, brands should have a point in their policies that says when they’re going to destroy customer information after a reasonable time. It’s going to be a fine balance between what marketers say they need and what legal teams say is the right thing to do!”
Additional trending areas highlighted in the report include social commerce, global commerce, marketplaces, profits, marketplaces and innovation. To read the full report visit https://powerretail.com.au/resources/the-future-of-ecommerce-report/.