Looking Ahead: The Top Five 2025 Retail Trends

As 2024 comes to a close, Bolt’s chief executive Justin Grooms is forecasting an upcoming year of retail transformation — tapping into insights from the leading checkout technology company’s network of more than 80 million customers and hundreds of retailers to inform his predictions. Personalization, convenience and finding innovative ways to deepen financial ties with customers are just a few of the major make-or-break opportunities for retailers.

Now more than ever, retailers are tasked with creating an unforgettable experience for their expecting shoppers. To stay competitive in today’s market, retailers must focus on creating a digital and physical presence while seamlessly integrating across platforms, said Grooms.

Investing in value-oriented strategies such as loyalty incentives and alternative payment methods is key to retailers looking to grow in the aftermath of inflation. Grooms notes that by doing so, retailers can lower their transaction fees and retain more revenue to reinvest in their businesses — all while making their pricing more competitive and creating loyalty benefits for shoppers.

As for artificial intelligence, Grooms predicts 2025 is poised to see retailers utilize this rapidly improving technology to hyper-personalize customer journeys. Retailers are looking to use transparent data and AI solutions to enhance convenience and relevance through real-time product recommendations. By tailoring individual in-app interfaces and store displays based on customer preferences, these merchants are set up to not only improve the customer experience, but enhance shopper trust along the way.

From prioritizing repeat customers, to the rise of non-network payments, to pop-up events and more, Grooms sat down with Fairchild Studio to discuss his 2025 retail predictions.

Trend 1: Retailers Rollout the Red Carpet for VIP Shoppers

As rising new acquisition costs and evolving expectations by customers continue to be an industry-wide issue, retailers are now turning to their VIP customers to drive spending. Brands like Sephora are expanding their sales to offer more discounts and benefits to their repeat and most loyal “super-fans.”

Another way online-focused retailers are driving connections with brand advocates is through the expansion or opening of in-person stores — allowing shoppers to interact with their favorite brands previously accessible online. Salesforce predicts that 2 out of 5 purchases made over this holiday season will be from repeat shoppers.

By using data-driven insights to create relevant experiences and doubling down on their loyal customers rather than seeking out customers during the holidays for one-off sales, retailers will continue to retain their shoppers and create a close-knit community. In turn, these customers effectively become brand ambassadors.

“Retailers are increasingly valuing repeat customers, understanding that loyal customers spend more and purchase more frequently than new shoppers. Loyalty programs, exclusive VIP events and personalized offers cater to these repeat customers, giving them a sense of exclusivity and deepening their emotional connection with brands.”

Trend 2: Non-Network Payments Accelerate

Retailers are using shoppers’ smartphones to build app-based ecosystems that merge payments, loyalty programs and personalized shopping experiences.

The Starbucks app is a prime example of this. By allowing customers to link their bank accounts directly to its automated clearing house (ACH) to add more money to their Starbucks card — effectively bypassing credit cards entirely for the retailer to make direct financial ties to their customers.

With the rise in alternative payment methods, customers now have more spending power as the reliance on high-interest credit cards starts to wane. Major e-commerce retailers have been looking to push their own ACH and alternative payment methods ahead of the holidays and reduce credit card fees.

Retailers using in-app wallet payments can create a more cohesive brand experience and help reduce friction — making payments another part of the personalized shopping experience. By allowing more alternative payment methods of spending, customers have an increase in long-term purchasing power — benefiting both the customer’s personal finances and the retailer’s revenue.

“Alternative payment methods — like ACH and digital wallets — allow retailers to forge a direct financial relationship with customers, bypassing traditional credit card networks that charge high transaction fees. This approach not only reduces costs but also allows retailers to integrate payments with loyalty programs, giving customers incentives to use store-specific payment options.”

Trend 3: Pop-up Events Extend Storefronts Beyond Online to Truly Omnichannel

With online-focused retailers opening more and more pop-up spaces to connect with their shoppers in person, these are now becoming a space for brands to deepen their financial relationships with customers.

Using this blend to engage with customers in real time, retailers apply the data collected from in-app customer behavior to help tailor pop-up event experiences to engage with shopper preferences. These immersive experiences will boost sales by creating a memorable interaction for the customer, leading to higher customer retention and strong brand affinity.

In this reimagination of the department store for today’s digital age, shopping and personal finances are becoming increasingly blurred. Customers using these stores turned interactive hubs can explore products, making purchases through mobile devices — where content, deals and product recommendations are tailored to the individual.

“Pop-up events provide a unique opportunity to offer in-person experiences that deepen customer loyalty and create meaningful brand connections. By integrating exclusive in-app purchases or payment methods at these events, retailers can seamlessly extend the digital experience into the physical world. Retailers are creating ‘experiential’ shopping spaces where physical visits are enhanced by digital features — QR codes for product information, app-based payments or even in-store augmented reality experiences.”

Trend 4: Rise of In-app Transactions

Apps like TikTok, Shein and Temu have already tapped into shoppers’ expectations to discover and purchase all at once — with retailers seeing the potential for increasing their lifetime value of individual shoppers by utilizing these loyalty connections.

Moreover, major retailers who use direct payment capabilities and apps will see a return on their customer relationships. Through this convenient and seamless experience, customers will continue to engage in this as shopping volume peaks throughout the holiday season.

With shoppers relying heavily on smartphones today, retailers who engage in apps serve as a one-stop solution for shopping, paying and loyalty rewards to simplify the shopping journey. Moreover, exclusive in-app offers can help entice customers to engage with a brand’s app to increase app usage and, in turn, lead to more purchases.

Brands like Starbucks and Sephora excel in this market — by using tailored promotions and easy payment loading options. Starbucks reported $10 billion refilled on its accounts in 2022 to create a seamless spending experience that creates customer loyalty.

“Retailers that have optimized apps with one-click checkouts, personalized recommendations and integrated payment options that streamline the buying process. In-app purchasing boosts customer lifetime value by creating a captive, loyal audience within the app environment, where personalized offers, quick checkout options and loyalty rewards are all readily accessible.”

Trend 5: Retailers Prioritize Buy Now, Pay Later Offerings as Tool to Segment Transactions

With retailers such as JCPenny using buy now, pay later (BNPL), alternative payments offer not only an increase in sales but a tool to segment transactions.

As high credit card fees continue to be a recurring cost, BNPL allows the option to provide customers with the flexibility to make larger, aspirational buys with lower-cost payments. BNPL has effectively become a go-to for many and remains an attractive option for Gen Z and Millennial shoppers looking to avoid racking up credit card debt.

BNPL has come as a major pull for retailers in enticing customers to make installment payments for high-priced purchases. This segmented transaction through payment options allows retailers to promote payment for small purchases through its direct payments while encouraging BNPL for more premium purchases.

By using alternative payments through this segmented approach, retailers can provide personalized marketing efforts and deals based on customers’ payment preferences to drive revenue increases.

“Retailers are gravitating toward BNPL options because they provide consumers with flexibility, making larger or unplanned purchases more accessible without incurring high credit card interest. By offering BNPL, retailers can expand their potential customer base and improve conversion rates, especially during high-spend periods like the holiday season, while also meeting evolving consumer payment preferences.”