Now that the 2024 holiday shopping season is behind them, retailers are turning their attention to shopping and industry trends that could impact their business in 2025. Even this early in the year, it seems clear that digital technology will not just be another “enabler, ” but the “driving force” that can define the overall retail experience.
Globally, Forrester predicts retail sales of $24.9 trillion in 2025. One-fifth of these retail sales—specifically about $5.3 trillion—will be online. A Forrester survey also reveals that 15% of retail companies have multiple deployments of Generative AI across their enterprise. The retail industry is investing in AI-powered tools to improve its customer experience and operational efficiency.
To stay ahead and remain competitive, retailers also need to modernize their warehouses and embrace the latest warehousing trends. Here’s a look at some trends that retailers should pay attention to in 2025:
- Robotic systems for optimizing warehouse operations and reducing energy consumption.
- Switching to renewable energy sources to reduce their carbon footprint.
- IoT integration
With the integration of IoT technology, retailers are transforming multiple areas including their customer experience, supply chains, and warehouses.For instance, with connected IoT technology, retailers are optimizing their warehouse management through:
- On-time customer deliveries
- Faster order cancellation and product returns
- Inventory management
- Supply chains
Besides real-time asset tracking, modern warehouses are enabling predictive maintenance through IoT-enabled sensors in their equipment (including forklifts and conveyors). Additionally, 5G connectivity in 2025 can provide warehouse managers with end-to-end visibility across distributed facilities. With these real-time insights, warehouses can allocate sufficient resources and reduce the misplacement of their inventory items.
- Sustainability
In 2025, consumers will continue to prefer retail brands that prioritize environmental sustainability. 64% want brands to reduce packaging, while 46% need clarity on product sourcing. According to Deloitte, supply chains in the retail sector contribute 25% of global greenhouse emissions.
Modern warehouses are switching to biodegradable and recyclable packaging to drive sustainability. Additionally, they need on-time stock replenishment to reduce wastage and environmental impact.
Here are some ways in which warehouses are amping up their management through:
- On-time customer deliveries
- Faster order cancellation and product returns
- Inventory management
- Supply chains
Besides real-time asset tracking, modern warehouses are enabling predictive maintenance through IoT-enabled sensors in their equipment (including forklifts and conveyors). Additionally, 5G connectivity in 2025 can provide warehouse managers with end-to-end visibility across distributed facilities. With these real-time insights, warehouses can allocate sufficient resources and reduce the misplacement of their inventory items.
- Smart warehouses
Powered by AI technology, modern warehouses are smarter and more responsive to changing market demands. In 2025, retail warehouses will undergo massive transformation with the integration of AI-powered tools like:
- Autonomous drones facilitate precise inventory tracking by monitoring and accounting for every warehouse item.
- Human-machine collaboration and intelligence enable warehouse robots to understand complex human instructions and provide real-time assistance.
- Robotic Pick Cells use machine learning algorithms to identify and handle objects of any size and material.
With AI-driven analytics, smart warehouses can also adapt to changing market needs through:
- Dynamic product slotting for easier access
- Accurate demand forecasting for maintaining optimum inventory levels
- Identification of operational bottlenecks and recommendations to overcome them.
- Supply chain visibility
Amid political conflicts and international tariffs, retailers face new challenges to their supply chains in 2025. This Forbes article predicts 2025 to be the year of efficient supply chain visibility. According to the World Economic Forum (WEF), AI technology is poised to protect global supply chains from the next massive shock.
More enterprises are recognizing the importance of integrated supply chain operations in 2025. For instance, warehouse managers can have real-time communication with their suppliers and logistics teams – along with real-time data sharing. Enterprises need this level of synergy for operational efficiency for warehouses, as well as for cost savings.
- Robotic automation
The global market for collaborative robots (or cobots) is projected to reach a value of $54.53 billion by 2029. Cobots are trained to work along with human workers, thus increasing both safety and productivity.
Collaborative robots are not the only use case for robotics in retail warehouses. In 2025, 36% of companies will increase their spending on automated materials handling equipment. Further, companies are expected to modernize their order fulfillment operations by using:
- Flexible racks and shelves (64%)
- Lift trucks (83%)
- Docking equipment (75%)
Over the next couple of years, companies are looking for warehouse solutions that can:
- Utilize their warehouse capacity (67%).
- Improve their order accuracy (58%).
- Improve their product packaging (49%).
The role of warehouse automation – and its challenges
25% of warehouses have implemented automation, up from just 5% a decade back. This percentage is only expected to go up in the coming years. That said, warehouse automation is not a “silver bullet” and can involve massive costs and efforts.
Apart from high implementation costs, automation solutions pose a variety of challenges like:
- Limited scalability to adapt operations to changing market demands
- Lack of integration into existing warehouse management systems (WMS)
- Labor shortages that can impact order fulfillment
- Inefficient product return management process thus adding to business costs
Effectively, retailers need to relook their warehouse automation to address these challenges in 2025. Without that essential prerequisite, they are more likely to lag in meeting customer demands as compared to their industry peers.
Conclusion
A successful warehouse operation is critical to business success for retailers in 2025 and beyond. While the technology-driven trends (outlined in this blog) have existed for years, retailers can no longer choose to delay their implementation beyond 2025.
With its Carte+ warehouse automation solution, Cartesian Kinetics can enable modern retailers to modernize their warehouses with in-built capabilities such as:
- Retrofitting an existing facility to save capital costs\
- Easy scalability and flexibility to adapt to market demands
- Operational efficiency through human-machine collaboration
- Seamless integration into existing warehouse systems
As an experienced warehouse solution provider, we can help you modernize your operations in 2025. Reach out to us today!
