Retail trends to watch in 2025

Episode transcript, edited for clarity

[00:00:51] Bill Thorne: Welcome to Retail Gets Real, where we hear from retail's most fascinating leaders about the industry that impacts everyone, everywhere, every day. I'm Bill Thorne from the National Retail Federation, and on today's episode we're talking to my colleague and the National Retail Federation's Vice President of Content Susan Reda about her retail predictions for 2025.

We're going to talk about everything from AI agents to live shopping to in-store innovation and other trends she expects to take flight this year. Susan Reda, welcome to Retail Gets Real.

[00:01:25] Susan Reda: Bill, it's great to be here.

[00:01:27] Bill Thorne: This is one of our most popular podcasts that gets posted every year, and I've never looked back to see if all of your predictions have come true, but nobody has told me otherwise, so I have to believe.

[00:01:40] Susan Reda: We should always just look forward.

[00:01:43] Bill Thorne: I'm with you on that. So let's get to it because I know there's a lot of ground to cover. What did you consider as you put together your predictions for this year?

[00:01:53] Susan Reda: Whenever I start this process, and I actually usually begin in about July or August, it's tidbits. So the real genesis for me was at our NRF Nexus event, which takes place in July. It's one of NRF's most exclusive events, but we bring together lots of folks in the digital arena, digital and marketing primarily.

And there's a lot of innovation happening there. So listening to those keynotes started it, and then after that, it's just a case of, ooh, that sounds interesting. Put that in a folder. That sounds interesting. Put it in a folder. We did things a little differently this year because, while the lion's share of the predictions are mine, we did reach out and we tried to get some engagement from some retail experts.

So just like everybody else this year, and they are just buried in things to do, but gratefully, we did have a handful of experts who shared their expertise, and we tapped all of the various subject matter experts inside NRF to give us their feedback. So I feel really confident that the 25 we've come up with — which is a big number, 25 for 2025 — but I think we've got some really strong predictions.

[00:03:09] Bill Thorne: Well, I guess that if you don't have something that includes the two letters of the alphabet that always come up anytime you talk about innovation and technology in retail, A and I, then you've missed the mark. But I have a feeling that AI agents are a big part of this.

[00:03:32] Susan Reda: They are. Yes, AI has been with us for several years now, and we've been talking about how it's dominating retail. But the AI agents, while not brand new, will really shape 2025 because of what they're able to do with the shopping experience. So if AI is the big raw brain power that is out there, then the developers are giving some parameters to the agents so that the agents can take that data and actually make it make sense for those of us out there.

So the easiest way to look at it is like ChatGPT. So you can ask ChatGPT absolutely anything, and it comes back with a response based on how much you've paid for it and all that good jazz. But honestly, I'm always amazed at how they — and I ask lots of strange and personal questions. I'm like, they're my buddy.

Well, think of that in terms of retail, being able to use a chatbot that takes the data the retailer has and gives you back a response that's really defined for you. It's going to change the way we shop. It's not just, you might also like. It is going to home in on what it is you want.

So there was an example I read about Tapestry and their Coach brand. And they were just playing around, like, how can we use this to lift sales? And so they, working with the developers, changed some of the metrics that they put in for search. So the way that consumer describes things is often very different from the way the creator describes it.

[00:05:29] Bill Thorne: Sure. Right.

[00:05:29] Susan Reda: Taking those words, those ideas, and then allowing it to expand the boundaries of what you're going to get back if you say, I want X, Y and Z, and I want it in this color. It's natural language. It's the agent understanding better what the consumer wants and getting to a point where they deliver that product faster and more likely to hit the mark on what you are thinking of. It's a long way.

[00:05:57] Bill Thorne: Isn't that the job of marketers? Is this replacing marketers? They're constantly looking at trends and things of that sort, and then they try to hone down what works on different demographics they're trying to hit. Is it the speed? Is it the depth? How do those two work together?

[00:06:16] Susan Reda: I don't think it'll replace the marketer. I think the marketer still has to do all of that work. I think it's purely getting the consumer what they want more quickly. So for the holidays, I have an Amazon Fire 11 and I was thinking — and I got the plug-in and I got this, and I need one of those bags.

And so of course, you go online and I'm like, "I need a sleeve. No, no, it's not a sleeve. It's a bag. It's like I needed to hold —" And all of a sudden, there it was. And I'm telling you, I was not sophisticated in the way I'm trying to say that. I was writing it just like I sounded now like, well, la la, what is that?

[00:06:59] Bill Thorne: Yeah.

[00:07:00] Susan Reda: And it came back to me. So it's not about not using the marketer to get the right product to the consumer. It's helping that consumer find exactly what they saw Selena Gomez wear. And they want to say, “It was this, it was this, it was this,” and the agent goes and finds it.

[00:07:19] Bill Thorne: It's a brand-new world. It is interesting though, when you think about trends. And I've told people that I believe we're having conversations today like they had conversations maybe 20, 25 years ago about the internet. The impact that that technology is going to have on our lives, not only just on their industries.

And I honestly believe that this is that next step, the next technology that people are really going to begin to rely on to ensure that they're maximizing their experiences, whether it's looking for something to buy, learning more about a certain subject matter, and personalizing it. I think that's the other important part of it. It's amazing.

[00:08:03] Susan Reda: I find that I use ChatGPT as much for understanding a process or a term that I've heard. I very quickly go to that and say, tell me what it is. Living in the sandwich generation where medical things come up all the time, I'm forever going, "Hey, what's that?"

[00:08:23] Bill Thorne: True that. Yeah, forget WebMD. Check in with ChatGPT.

[00:08:29] Susan Reda: There's some truth to that because ChatGPT is going to give you that quick, easy summary. I feel like a commercial for ChatGPT, but —

[00:08:38] Bill Thorne: Or you could just say AI tools.

[00:08:40] Susan Reda: This is summary that you understand. You're not going to have to sort through the jargon that is WebMD.

[00:08:46] Bill Thorne: For better or worse. So, live shopping and social commerce. Your thoughts.

[00:08:53] Susan Reda: I think it's going to finally catch fire here. We've been hearing that it's been booming in Asia for a long time. And meanwhile, we've always had QVC and HSN as the beacons of that. But what brands continue to learn and find is that it is an extension of social media and content strategy.

So if a brand can plan using social media, put out there that we're going to host an event for our spring fashion, and so for a number of days they're using social media to tell people when and what time, they'll get consumers to join in because it's part of the fun and energy of retail to be on the sidelines or in this case, watching a screen as that unfolds and be among the first to buy that latest, greatest outfit for spring.

A lot of brands are trying it and it's working, but we've already seen both Nordstrom and Bloomingdale's are doing their own live shopping, and they're having really strong success with it. So I think brands are on board. I think we learn constantly from what we're seeing on social media, and it's time. It's time for that to happen.

[00:10:16] Bill Thorne: Live shopping, how does that work? I'm a [Inaudible]. Is it something that you tune in at a certain time on a certain day and via a network, you are then given the opportunity to see a new product or a new line, that it's live and you're able to interact with it? Is that what it's like?

[00:10:39] Susan Reda: The interaction is just probably shopping at that point. You might be able to, much like a webinar, ask a question that they might pick up and address in the course of presenting it, but it's usually happening on social media or, in the case of a Nordstrom or Bloomingdale's, on their website.

So you're there and you're in the moment and you can shop immediately. But there's also things like on — QVC has a program that they launched with Busy Phillips, a character, but she is in a room and everything in that room is sold on QVC’s channel, everything she wears. She'll bring a guest out and they'll have a conversation. And everything that that guest is wearing is also available on QVC. So the whole event is both content and fun and entertaining and shopping.

[00:11:37] Bill Thorne: Former chairman of our board, Mindy Grossman, she talked about that a lot, and she was QVC. But she would talk about a regular TV show. So let's say that you were watching something that's really popular. Somebody would be wearing something, and you could literally click on it, and it would show you what it was, how much it cost, and where you could get it. She said, "I believe that that's the future." So QVC is really doing that for all intents and purposes.

[00:12:01] Susan Reda: Yes, I do think that we're seeing a little bit of that, but I cannot point my finger to an exact show, but there have been instances where it was made available immediately to somebody who was way more trend-savvy than you or I and would know how to do that.

[00:12:18] Bill Thorne: Well, TV-savvy. I'm sitting here, I'm like, OK, a TV show? I can't even think of a TV show. I was like, I'm at “Friends.” “Everybody loves Raymond.” That's what's coming to my mind. I'm like, "Who's going to buy clothes from that?"

[00:12:32] Susan Reda: I think I'm getting to my Marie Barone face.

[00:12:34] Bill Thorne: Just is unbelievable. The other thing too is on the social commerce side of this, it's funny, as you were describing it, I was like, if you look at all those old movies where the women would go up and they'd sit in like a salon, the ladies would come out wearing the dresses and then they would be able to feel the linen or whatever, and they could buy the dress and be fitted for it, and then leave the store with it. It's the next version of that where it's a social event.

[00:13:00] Susan Reda: It is. Yeah.

[00:13:03] Bill Thorne: That's from the movies. I never experienced that myself. I've never seen it in real life, but that's from the movies. All right. So the rebirth of retail stores. I have to tell you, Susan, we've had so many conversations about this over the years particularly when you think about just a few short years ago, the death of retail, the zombie malls, the shuttered stores.

And it would drive us crazy because it was a narrative that was being fed by fiction as far as I was concerned. And so what we learned was, in fact, while there were stores closing, there were also stores opening, and in fact, more stores opening than closing. And in fact, many of the stores that were closing were just not high-performing stores that needed to go away.

So I love this idea of the rebirth of retail stores. What do you think you're going to see in store, brick and mortar, go through the doors, converse with people? Never has gone away. Never will go away.

[00:14:06] Susan Reda: It never will go away. And maybe it's the word “mall,” I'm always going to call it a mall, but it's a social shopping venue. And I think part of the reason why we're using that word rebirth is because Gen Z and, gratefully, Gen A are finally saying enough with looking down at a tablet. That's not what life is.

“I need to get out and be with friends and see and touch and feel things.” Maybe it's because they spend so much time using their tablets, their computers, their phones. We didn't. When we grew up, one, didn't have them. Two, we went to the mall. But even millennials, we're just coming into that when they were in their teenage years.

But Gen Z, that was all they knew for the longest time. And they're lonely and they're depressed and they're not engaging. And so they see this as an opportunity to get out and be engaged and have fun. And I think the challenge for retailers is to keep it fresh, keep it social. I think flexible store formats, it's more than just using your CAD system, reorganize your store this way.

You've got to find ways to really lean into experiential retail and to keep that current. Those were really big challenges. For some it could be that you're operating a store in one area of the mall, but you put a pop-up at the other end that's just trend-focused in some way. Pop-ups are really important.

We seem to hear they come and go, but people love that. They love the energy of, “it's there, I got to be there. I want to buy it while it's hot.” And then it closes and you're left feeling bad if you didn't go, so you'd want to go the next time. There's a lot of good energy there. There's tailoring those offerings and experiences to the customer you have to really understand what they want.

Is it a fun drink when they walk through the door? Is it coffee? Because you can set up a little coffee station. Or is it something else? It could be anything, but it's based on who your customer is. It's tailoring that experience, and it's keeping it fresh, however you do that so that when they come back, wow, I got to go there again.

[00:16:31] Bill Thorne: Right. It's so funny because just up on my TV comes Rick Caruso and you think about what he did in the Grove and all of the developments that he has had under his belt in terms of completely changing the idea of what a mall experience is. And this comes on the heels as I'm looking at this promo.

I just went to a mall not too long ago. It was the most depressing thing I've ever experienced because it was primarily closed. There were a couple of anchors that were still there, but it was sad. But as I looked at that, I thought, boy, this has so much potential. If they can bring in somebody with a vision of like a Rick Caruso or others, it could come back. It absolutely could come back.

We got the high sign, which I can't believe because I feel like we just got started. So we have to talk about the demographics, these Gen Zers and the Alphas. And by the way, just yesterday I heard somebody talking about the betas. Can you believe that?

They were like, if your child was born on January the first, we're going to give you $100 in an account that will then, by the time they retire, be worth at least $100,000. This is for the beta generation. I was like, "Wait, now? Betas?"

[00:17:43] Susan Reda: I know. Well, here's the thing. I learned just a few weeks back that I am going to be a grandmother in June.

[00:17:49] Bill Thorne: Oh, Susan.

[00:17:51] Susan Reda: I'm a boomer and my grandchild will be a beta, so it's just fitting.  Boomers and betas.

[00:17:58] Bill Thorne: Boomers and betas. Congratulations. I had no idea. That's fantastic. Are you ready?

[00:18:04] Susan Reda: Sure. I'm ready to spoil. Are you kidding?

[00:18:07] Bill Thorne: Yeah. I'm very much looking forward to the picking of the name, nana, Susu. Any who. All right. Totally off of the subject. No, it's not off the subject. It's totally on the subject, but let's talk about Gen Zers and Alphas.

[00:18:24] Susan Reda: The next year there'll be a prediction about baby something.

[00:18:27] Bill Thorne: Yeah, yeah, yeah, for sure.

[00:18:29] Susan Reda: For sure.

[00:18:29] Bill Thorne: So what do we have in terms of the influence of the Gen Z demographic, the alpha demographic? Who are these people —

[00:18:36] Susan Reda: I think Alphas are really going to be the ones to watch because they all see themselves as creators. Somebody would say to me, "Oh, well, my son or daughter goes to the thrift shops and they buy all this stuff, and then they resell it." And I'd be like, "Wow, that's pretty cool."

Now that's pretty common. They all have their own way of thinking about things, about putting themselves together. I watched a video from Claire’s, and I was just thinking, well, that's exactly their customer, is the alpha. And they just put themselves together in a unique way. They're not following the rules, and brands love that.

So brands are actually looking to partner with some of these alpha creatives, which just blows my mind. I don't know, I guess they get the alpha child, and I'm certainly going to get the mom in the background, so good luck. But I think that the future is bright for retail because they are energized by product, and they are creative. And yes, they've grown up as digital natives, but that's only a good thing for retail right now. I think it looks very positive going forward.

[00:19:51] Bill Thorne: Susan Reda, I'm going to ask you one last question. I know that we did get the high sign and we're probably a little bit over, but I do want to ask you, of all the predictions that are in this year's list, which is the one that you like the most? The one that says, that makes me feel good.

[00:20:08] Susan Reda: It's probably live shopping that makes me feel good. But there's just so much in here about everything from health and wellness and how we'll use biometric rings to better understand whether we need to hydrate. Are women most fertile at this moment? Is my heart rate out of sync?

Truly important information about our health. And just by wearing a ring that's linked to an app, we can know that. I think there'll be trends in food, and there's so much going on from self-driving vehicles to more drone delivery. Every time I mention drones, somebody groans, but they're out there.

[00:20:55] Bill Thorne: Susan, it has been a distinct pleasure, again, talking about what the future holds for retail, the great new things that are being unveiled to the consumer. But I think that the underlying theme every year has been the marriage between retail innovation and technology. And it's a dynamic industry that changes at a pace that I don't think any other industry can change. And so thank you, again, for sharing with us your predictions for the year ahead.

[00:21:25] Susan Reda: Yes. Thank you. I could not have said that better myself. And they must go to the NRF blog and read all 25.

[00:21:32] Bill Thorne: Amen. And thank you all for listening to another episode of Retail Gets Real. You can find more information about this episode at retail gets real dot com. I'm Bill Thorne. This is Retail Gets Real. Thanks again for listening. Until next time.