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[Editor\u2019s note: I sat down with the folks at PAN, our co-host for an <\/em>exclusive event<\/em> that will take place Monday, Jan. 13 from 6 to 8 p.m. at KYMA at Hudson Yards, to discuss a few of the key trends retail will be grappling with in 2025 for <\/em>this blog post<\/em>. Read on to take a look at the issues we plan to watch and cover on\u00a0Retail TouchPoints. \u2014 Adam Blair]<\/em><\/p>\n PAN: Don\u2019t expect to walk by any vendor booths at NRF next week without having them tell you about their latest AI offerings and innovations. While a lot of AI use cases exist today \u2013 both in the back end and in customer-facing applications \u2013 there are still many companies that are waiting to achieve ROI on their AI investments.<\/mark><\/strong><\/p>\n Adam Blair:<\/strong> One of the more interesting AI use cases popped up just recently: Ulta Beauty\u2019s leveraging of generative AI from Nvidia to provide customers with realistic previews of potential new hairstyles and\/or colors for its\u00a0GLAMlab Hair Try On\u00a0solution. \u201cFor our hairstyle try-on use case, we had to license the model for commercial use, retrain it and put guardrails around it to ensure the AI was only modifying pixels related to hair \u2014 not distorting any feature of the user\u2019s face,\u201d Ulta Beauty\u2019s Juan Cardelino explained. To me this illustrates both how powerful gen AI-based solutions can be, but also the preparatory and ongoing work required to make them truly useful to both consumers and retailers.\u00a0<\/p>\n In terms of consumer acceptance of AI, there are strong indications that many consumers are unaware that AI is already sharpening the product recommendations they receive \u2013 or has planned a faster delivery route so that their package arrives on time. In fact, there\u2019s every sign that AI is becoming part of people\u2019s workflows both inside and outside the retail industry, which will pave the way for even greater acceptance by both consumers and industry in 2025.\u00a0<\/p>\n PAN: Since the results of the U.S. election were announced, tariffs have been on every retail and supply chain executive\u2019s mind. How are retailers in the B2B and B2C space preparing for supply chain disruptions caused by potential tariffs in 2025? Are companies more equipped to handle tariffs and other disruptions than five years ago?\u00a0<\/mark><\/strong><\/p>\n Blair:<\/strong> It\u2019s difficult to forecast the impact of tariffs since we don\u2019t have solid information yet on how big they will be nor which goods and countries they\u2019ll be applied to, though it\u2019s a pretty safe bet that China will be a key target of the incoming U.S. administration. The industry also will need to keep an eye on global conflicts that can slow down transportation and logistics, such as the attacks by Houthi rebels that slowed down ship traffic in the Red Sea in 2024.\u00a0<\/p>\n The overall impact on supply chains from tariffs and other disruptions will certainly be significant. However, it\u2019s important to remember that, since COVID, sourcing professionals have been exploring alternatives to China, which was hit harder \u2013 and for a longer time \u2013 by the pandemic than many other countries.\u00a0<\/p>\n The impact of \u201cnearshoring\u201d and alternate suppliers could mitigate the worst impacts of tariffs, including higher costs for brands and retailers that they will pass on to their customers (if they can).\u00a0<\/p>\n PAN: While the future of TikTok in the U.S. is still uncertain, the impact of social channels overall on retail sales continues to explode, and that\u2019s not expected to stop. This can be a lucrative opportunity for retail brands, but I imagine there are also challenges with having to manage this influx of new channels and influencers.\u00a0\u00a0\u00a0<\/mark><\/strong><\/p>\n How are brands keeping up and managing the influx of channels, while still maintaining a consistent brand presence? And as the rise of dupes threatens authenticity, is influencer culture helping or hurting brand perceptions?\u00a0<\/mark><\/strong><\/p>\n Blair:<\/strong> The growth of social commerce, which is likely to continue even if the TikTok ban takes effect in 2025, presents a major challenge to brands seeking to maintain their image in the marketplace. Such platforms may not have the brand protection and anti-counterfeiting infrastructures of more established platforms such as Amazon, making the presence of dupes both more likely and harder to track down and take off the market. Influencers can amplify this problem by promoting products that may or may not be the genuine article.\u00a0<\/p>\n Brands concerned about the dilution of their image may want to harness the power of key influencers, convincing them of the benefits of promoting their actual products rather than counterfeits. Consumer education is another potentially powerful tool, as is keeping a close eye on manufacturers to ensure they are not creating \u201cextra\u201d product to be sold on black or grey markets.\u00a0<\/p>\n PAN: Over the past several years, we\u2019ve seen more brands commit to sustainable packaging and logistics, circular commerce and other environmental efforts.\u00a0Are retail brands continuing to prioritize sustainability efforts in 2025? Will we see this pick up or slow down in 2025?\u00a0<\/mark><\/strong><\/p>\n Blair: The embrace of circular commerce is likely to continue growing in 2025, especially considering the number (and variety) of brands that initiated some kind of resale program in 2024 \u2013 including\u00a0Patagonia,\u00a0David\u2019s Bridal,\u00a0B\u00e9is,\u00a0Fj\u00e4llr\u00e4ven,\u00a0Stitch Fix\u00a0and\u00a0Ikea\u00a0\u2013 as well as the rise of resale-specific marketplaces such as\u00a0StockX.\u00a0<\/p>\n Brands, particularly those in the luxury space, are eager to extend the life of their products as well as making their products more affordable to an aspirational consumer, and trade-ins of \u201cgently used\u201d products and other resale opportunities give them a golden opportunity to accomplish both goals.\u00a0<\/p>\n There does seem to be a softening of support among some retailers for sustainability as well as other DEI (diversity, equity and inclusion)\u00a0programs, but I\u2019m hopeful that this is just a blip in the move toward a more sustainable industry. Big companies including\u00a0Starbucks\u00a0and\u00a0Amazon\u00a0are making sustainability investments in their supply chains that are likely to have positive ripple effects for years to come.\u00a0<\/p>\n Additionally, circular commerce programs provide low-friction ways for consumers to feel good about their personal sustainability profiles, which should encourage more participation.<\/p>\n<\/p><\/div>\nReflections on AI Use Cases<\/strong><\/h3>\n
Reflections on Tariffs and Trade Disruptions<\/strong><\/h3>\n
Reflections on Social Commerce<\/strong><\/h3>\n
Reflections on Circular Commerce and the Environment<\/strong><\/h3>\n