Navigating the Future: Top Retail and CPG Technology Trends for 2025

As we move into 2025, the retail and Consumer Packaged Goods (CPG) sectors are poised for significant transformation, driven by innovative technologies. Here's how these trends could redefine consumer engagement, operational efficiencies, and sustainability across the secto.

1. Artificial Intelligence (AI) and Machine Learning (ML):

AI's role in retail and CPG is expanding, with leading researchers predicting an "external AI brain" that could revamp how businesses operate. This external AI could serve as an always-on, personalised advisor for both consumers and businesses, enhancing everything from product discovery to supply chain management. Retailers are already leveraging these technologies for predictive analytics, dynamic pricing, and personalised marketing; but it's time to reshape the underlying infrastructure of the organisation to ensure capitalisation is possible on these new technologies. I've left this point brief, as frankly all we see in every article is AI, AI, AI.

2. Beyond Omnichannel:

The shift towards an omnichannel approach is set to intensify, ensuring that the consumer journey is seamless across all platforms. The idea of a "Third Place" where digital and physical retail merge to create unique shopping experiences will become more prevalent, allowing retailers to engage with customers in new, innovative ways. But we should progress past talking about omnichannel, adopting the approach put forward by IDC 's Leslie Hand in the report "Retail Reinvention in the Age of AI Everywhere:From Omni-Channel to Future-Forward, Autonomous,and Resilient". This new approach of FAR is critical to adopting future technologies at scale and ensure impact on the end to end retail and CPG value chain.

3. Edge Computing, IoT and LiFi:

With IoT devices proliferating, edge computing will play a crucial role in real-time data processing, as noted by the emphasis on AI meeting physical world applications. This synergy will be pivotal in smart retail environments, where immediate data analysis can lead to optimized stock management and personalised in-store experiences. The integration of LiFi (Light Fidelity) with edge computing and the Internet of Things (IoT) is poised to have several significant impacts. LiFi could significantly enhance the performance, security, and scalability of edge computing and IoT ecosystems by offering faster, more secure, and energy-efficient data transmission methods. However, the full impact will depend on overcoming technical challenges and the pace of infrastructure development

4. Augmented Reality (AR) and Virtual Reality (VR):

From what I have seen with clients, and what I am predicting, I believe that interactive video, which in retail can translate into immersive shopping experiences, will be one of the major use cases. The #metaverse failed but it created a lot of amazing technology along the way. AR and VR will not only enhance online shopping but also revolutionise in-store interactions, enabling virtual product trials and visualisations that blend the digital and physical worlds. Most recently I saw this in action at Cognizant's retail innovation lab in Chennai, where we saw wayfinding, refresh retail media delivery via smart phone AR, computer vision combined with AR for replenishment and cleaning.

5. Sustainability and Transparency:

Sustainability is no longer a niche market; it's a mandate for survival in the retail and CPG industries. Consumers worldwide are increasingly voting with their wallets for brands that align with their ethical and environmental values. This shift is not just consumer-driven; regulatory bodies are also tightening laws around environmental impact, making sustainability a business necessity rather than an option. In retail and CPG this can translate to using technology for transparency. Blockchain and IoT can ensure product traceability and environmental accountability, aligning with consumer demands for ethical and sustainable practices. IoT devices are already, and will play an ever increasing role that is integral in monitoring environmental impacts in real-time. From tracking energy consumption in manufacturing to managing water usage in agriculture, IoT provides the data needed to make informed sustainability decisions. And finally, Digital twins, virtual replicas of physical products or systems, will allow companies to simulate and optimise product lifecycles for sustainability. They are already helping in designing products with sustainability in mind from the outset, forecasting environmental impact, and managing end-of-life scenarios more effectively. When we layer AI across all of these, we get sustainability of the future.

For retail and CPG companies, the path forward involves embracing these technologies not only to meet consumer and regulatory demands but to innovate and lead in sustainability. By integrating these tools, companies can reduce their environmental footprint, enhance brand loyalty, and open new revenue streams through sustainable product lines.

In conclusion, the fusion of sustainability with technology in retail and CPG is not just about adopting new tools; it's about rethinking business models to ensure they are viable, ethical, and forward-thinking in a world that values the planet alongside profit.

6. Retail Media Networks (RMNs):

Retail Media Networks (RMNs) have emerged as a powerful force in the advertising landscape, fundamentally altering how brands engage with consumers through retail channels. As consumers increasingly turn to retailers for both shopping and information, retailers are capitalising on this trend by transforming their digital properties into robust advertising platforms. RMNs allow retailers to leverage their rich, first-party consumer data to offer targeted advertising opportunities that traditional media cannot match. This means brands can now place ads in contexts where consumers are already in the buying mindset, directly influencing purchase decisions at the point of sale. The effectiveness of RMNs lies in their ability to provide detailed insights into consumer behaviour, demographics, and purchase history, enabling hyper-targeted campaigns that resonate with individual consumer preferences. Gartner forecasts that by 2025, over 50% of retail media networks will integrate with broader programmatic ecosystems, making advertising more seamless and data-driven. This shift not only opens new revenue streams for retailers but also enhances brand loyalty and engagement by delivering relevant content and offers when consumers are most receptive. The growth of RMNs (sometimes 30% CAGR) also signifies a broader trend towards retail becoming a central node in the digital advertising network, where the line between shopping and advertising blurs, creating a symbiotic relationship that benefits both retailers and CPG brands.

7. Personalisation at Scale:

The concept of personalization at scale has transitioned from a marketing ideal to a practical necessity in today's retail and CPG industries. This shift is driven by consumers' expectations for brands to recognise them not just as a demographic segment but as individuals with unique preferences and histories. Utilising AI, machine learning, and edge computing, companies can now analyse vast amounts of data in real-time to tailor experiences, products, and marketing messages to each customer's specific journey.

Adobe underscores this trend with their insight that, "Companies that create personalised experiences grow year-over-year incremental revenue by 1.7x, and more than double the lifetime value of their customers." This personalisation extends beyond simple recommendations to dynamic content creation, where marketing materials, product offerings, and even in-store experiences are automatically adjusted based on real-time data. The integration of technologies like CDPs and DXPs enables brands to orchestrate personalised journeys across all channels, ensuring that each touchpoint is optimised for engagement and conversion. This level of personalisation at scale not only enhances customer satisfaction and loyalty but also significantly boosts business metrics like retention, conversion rates, and ultimately, revenue. As we move further into 2025, the ability to deliver these personalised experiences will increasingly define competitive advantage in the retail and CPG markets, making it an area where investment in technology and data infrastructure is not just beneficial but essential. As with all AI infused technology approaches, it will be interesting to see how sustainability is tracked as compute power gets eaten up faster than ever.

8. Automation and Robotics:

Automation is expected to continue growing, with Andreessen Horowitz mentioning the resurgence of industrial capabilities. In retail, this means more automated warehouses, checkout systems, and even personalised robotic assistance in stores, improving efficiency and reducing labor costs. The supply chain has already gone through major transformation, just look at what companies like Amazon and Ocado Group are doing with their automated warehouses, and in Australia what Coles Group are doing with Ocado's technology.

Are you ready to embrace these transformative trends in 2025? What do you see as the future trends that will shape next year?