IDC FutureScape: Worldwide Retail 2025 Predictions

This IDC study presents the top 10 predictions for the retail market for 2025. Leslie Hand, Group Vice President, IDC Retail Insights and IDC Financial Insights, emphasized, "Retailers are not investing in small step changes to their portfolios - they are digitally transforming and investing in the massive scale and speed of digital, cloud-based, connected, AI-driven, and sensor-driven automation. We are in the middle of a customer-led, technology-enabled revolution in retail."

IDC FutureScape Figure

Executive Summary

IDC FutureScape Predictions

• Summary of External Drivers
• Predictions: Impact on Technology Buyers
  • Prediction 1: By 2026, 90% of Retail Tools Will Embed AI Algorithms, with Over 30% of These Algorithms Using Standalone AI or Modular, Agnostic AI Models That Can Be Swapped Out for Suitable Retail-Specific Models
    • Associated Drivers
    • IT Impact
    • Guidance
  • Prediction 2: By 2028, 30% of Retailers Will Drive 10% IT Costs Out of Stores by Utilizing Distributed Edge with Onboard AI Chips, Reducing Latency and Improving IT Operations Performance
    • Associated Drivers
    • IT Impact
    • Guidance
  • Prediction 3: By 2026, 70% of Retailers Will Implement AI-Driven Loyalty Apps, Improving Contextualized Offers by 40% and Boosting Customer Engagement to Drive Up to a 25% Increase in Customer Retention Rates
    • Associated Drivers
    • IT Impact
    • Guidance
  • Prediction 4: By 2028, Secondary Inventory Management Benefits Realized from Technology Adopted to Be Compliant with Regulations Will Spur a 30% Increase in Supply Chain Adoption of Track and Trace Capabilities
    • Associated Drivers
    • IT Impact
    • Guidance
  • Prediction 5: By 2025, Major Retailers Will Boost IT Spending by 10%+ to Enhance Cybersecurity to Better Battle the Rising Tide of New, More Sophisticated Data Breaches and Other Cyberthreats Retailers Now Face
    • Associated Drivers
    • IT Impact
    • Guidance
  • Prediction 6: By 2027, 40% of Retailers Will Leverage GenAI-Enabled Content Creation and Delivery for Dynamic Product Content, Boosting Conversion Rates and Cutting Content Management Costs by 30%
    • Associated Drivers
    • IT Impact
    • Guidance
  • Prediction 7: By 2026, 50% of Retailers Will Have Reduced Workforce Costs by 2% with Embedded GenAI in Fundamental Business Processes and Tasks Across Business Operations at Corporate and in Stores
    • Associated Drivers
    • IT Impact
    • Guidance
  • Prediction 8: By 2027, Over 45% of Major Retailers Will Apply Hyper-Localization for Store-Specific Assortment Planning, Selection, Allocation, and Replenishment That Leverages AI and Data-Driven Decision-Making
    • Associated Drivers
    • IT Impact
    • Guidance
  • Prediction 9: By 2029, Grocery Retailers Will Harness Quality Data at Scale from Interoperable Unified Supply Networks for AI-Based Decision Intelligence to See a 6% Increase in Profits and 18% Reduction in Waste
    • Associated Drivers
    • IT Impact
    • Guidance
  • Prediction 10: By 2026, 70% of Major Retailers Will Invest in Loss Prevention Tech Applying AI to Integrated Data Sets with Multiple Sources (RFID, Camera, Traffic, and Inventory Data) to Reduce In-Store Theft by 25%
    • Associated Drivers
    • IT Impact
    • Guidance

Advice for Technology Buyers

External Drivers: Detail

• AI-Driven Business Models - Moving from AI Experimentation to Monetization
• The Drive to Automate - Toward a Data-Driven Future
• Battling Against Technical Debt - Overcoming Hurdles to IT Modernization
• Regulatory Flux - Navigating Compliance Challenges in a Shifting Policy Landscape
• Expanding Digital Security Frontiers - Fortification Against Multiplying Threats
• Customer Experience Squared - Consumer and Citizen Expectations for Digital Services
• AI-Driven Workplace Transformation - Building Tomorrow's Workforce Today

Learn More

• Related Research