Three Essential Merchandising Capabilities to Lead Retail in 2025

If AI and advanced analytics aren’t already driving your merchandising processes, you will fall behind. By 2025, AI will be the foundation of every profitable retail decision, from assortment planning to promotions and pricing.

• Smarter Planning: AI must harness historical and real-time data (both internal and external) to ensure the right products are in the right locations. Overstock and stockouts should be relics of the past.
• Precision in Pricing and Promotions: Predictive analytics should fine-tune your pricing strategies and help maximize promotional impact for different customer segments. Further, leading retailers use advanced price optimization platforms that simultaneously optimize multiple KPIs, such as revenue, margin, and units.
• Unified Demand Signals: If your data isn’t consolidated into a single source of truth, you’re missing out on faster, more accurate inventory decisions.

Integrating AI into merchandising processes is no longer optional for retail leaders—it’s the key to thriving in an era of heightened competition and customer expectations.

Supply chain disruptions are now the rule, not the exception. If your supply chain isn’t transparent and agile, your merchandising team won’t be able to keep up with shifting demand. The days of static, long-term inventory planning are over.

• Dynamic Inventory Planning: Your supply chain analytics should offer full visibility from start to finish. If your merchandising team cannot forecast and allocate inventory with precision during market fluctuations, it’s time to rethink your strategy.
• Decentralized Sourcing: Diversified supplier networks reduce risk and ensure continuity for key merchandise categories, particularly during seasonal surges or disruptions.
• Sustainability as Strategy: Consumers demand environmental responsibility, and legislation will soon require it. Sustainable practices like circular inventory systems and carbon-neutral logistics must be embedded in your strategy to stay competitive.

Waiting to address these capabilities is a recipe for failure in 2025.

Your customers expect a frictionless experience across every touchpoint. If your merchandising capabilities don’t support this seamless integration, you’ll miss out on significant opportunities.

• Seamless Channel Integration: Your customers and customer-facing associates must have appropriate visibility of your assortment, inventory levels, and pricing, both online and in-store.
• Reimagined Physical Spaces: Retail leaders create immersive, tactile shopping experiences in their physical stores, and digital-first competitors are opening physical stores as experiential hubs to complement their online presence.
• Empowered Workforce: Store teams with the right training, processes, and tools are empowered to efficiently manage omnichannel inventory strategies and deliver exceptional customer experiences.

Retailers who master omnichannel merchandising execution will win in 2025. Those who don’t will struggle to survive.

Many leading retailers already have these essential merchandising capabilities in place. Those who delay implementing them will find themselves playing catch-up. It’s time to evaluate your current merchandising capabilities and ensure they align with the future of retail.

• Are your assortment and pricing strategies AI-powered and fully responsive to real-time demand signals?
• Does your supply chain provide complete visibility and flexibility to support merchandising decisions?
• Is your omnichannel strategy truly integrated, offering customers a seamless experience across every touchpoint?
• Are your merchandising and store teams empowered with efficient processes, updated training, and modern technology?

Retailers who act decisively in the coming year will position themselves to lead the market and capture opportunities that less agile competitors will miss.