The retail industry is facing numerous challenges ahead of 2025, according to two recent research reports. Despite some optimism, experts warn that retailers will need to invest in technology and agile supply chains to mitigate disruptions.
National director of retail services at Colliers, Anjee Solanki, says the industry is navigating a complex landscape with rising costs, evolving technological demands, and geopolitical instability. To adapt, retailers are focusing on strengthening their supply chains through the use of blockchain technology and local manufacturing models.
Solanki notes that mass retailers and home goods merchants are more pessimistic about growth due to ongoing hurdles affecting new development, including high construction costs and labor expenses. Retail sales have remained positive since 2020 but are expected to slow in 2025.
In contrast, Honeywell’s president of productivity solutions and services, David Barker, sees AI as a game-changer for the industry. He believes that agile supply chains and AI-driven decision-making will be essential for retailers to stay relevant in an increasingly dynamic market.
Barker highlights the importance of leveraging real-time data and AI-powered digital resources to empower sales associates and streamline operations. These technologies will enable workers to serve customers more efficiently and quickly answer shopper questions.
With the close of 2024, approximately 50 million square feet of new shopping center space will be added in the US, but high construction costs make it difficult for projects to be financially viable even in strong markets. The recent wave of inflation has also taken its toll on retail sales growth, which is expected to slow in 2025.
Overall, experts warn that retailers need to adapt quickly to changing market conditions and consumer behaviors to remain resilient.
Source: https://wwd.com/business-news/retail/retail-strategies-to-mitigate-tariffs-and-market-uncertainties-1236741420