This has been a year of disruption for the retail sector, but if 2024 was about survival, 2025 is about reinvention. With consumers evolving faster than ever and technology reshaping every touchpoint, retailers who fail to adapt will be left behind. In collaboration with Checkout.com, Power Retail has released The Future of Ecommerce Report, an expert-led forecast that reveals the top predictions shaping the retail space in 2025.

The insights compiled from ten industry professionals offer a glimpse into a future where e-commerce is more immersive, data-driven, and borderless than ever before. Retailers who act on these trends now will position themselves to lead the charge.

Here's what to expect in 2025:

1) Experience Driven Consumerism

Reflecting on the "Taylor-mania" phenomenon earlier this year, when Taylor Swift’s Eras Tour took over Australia, I couldn’t help but notice how this event highlighted a significant shift in consumer behaviour. The frenzy around Swift’s tickets, themed outfits, and exclusive hospitality experiences, despite rising cost-of-living pressures, demonstrates that consumers are increasingly prioritising experiences, values, and the things that bring them joy over traditional spending habits.

As we move into 2025, I anticipate retailers will tap into this by offering more interactive pop-up stores, experiential in-store events, and loyalty programs that reward engagement. Consumers are looking for shopping experiences that go beyond simple transactions, and this shift will drive how brands connect with their audiences moving forward.

2) 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.

3) 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 customise content dynamically and even influence product design and development.

4) 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 Se, 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.”

5) Increased Data Transparency

In 2025, stricter privacy laws under the Privacy and Other Legislation Amendment Bill 2024 will push Australian retailers to prioritise 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.

The predictions for 2025 are clear: e-commerce is no longer just about selling products, it’s about creating experiences, delivering personalised value, expanding globally, and building trust with consumers. Retailers who are ready to embrace these changes will not only survive, they’ll thrive in the fast-evolving digital economy. Those who act now to innovate and stay ahead of the curve will lead the way. The future of e-commerce is not coming; it’s already here.

The question is: Are you ready?

Rosalea Catterson, Editor of Power Retail.