Attendees at last year’s National Retail Federation conference in New York City might have been wowed by eight-foot tall, three-dimensional holograms displaying fashion clothing, and every month of 2024 seemed to bring new talk of deploying artificial intelligence to customize consumers’ shopping experiences to exactly fit their tastes and physical measurements. But the truth is, when it comes to tech that genuinely changes the retail shopper experience, we’re still in the pre-flying-car phase: It’s all in the future, really. 

Which is curious, because the retail industry has been talking a big game in the last few years about putting the customer experience (or CX for short) front and center, touting the amazing capacity of both physical and software technology to make it giddy with novelty.

But take a walk around the New York flagship store of Macy’s – an icon of retail if ever there was one – and you’re greeted by vast floorspaces devoid of human assistants, with racks and racks of items that feel weirdly random, even abandoned. 

Arguably, traditional department stores have lost their appeal (ironically, in part, because they stopped offering services such as personal shoppers, free tailoring and local delivery). But even online, shoppers encounter frustrations that have come to seem intractable. Sure, if you live in a big city, you can get a meal or a book or an item of clothing delivered to you in a matter of hours. Sometimes. But online purchases often encounter delays in fulfilment – not least because many items are now sent direct from China or other countries with low production costs. 

Porch piracy, too, has become a deal-breaking problem the industry can no longer deny. According to Security.org, as many as 58 million Americans became victims in the 12 months to November, 2024, and apartment dwellers experience package theft at double the rate of those who live in homes – not a great trend in an increasingly urbanizing population.

“It’s important to remember that the brick-and-mortar proposition will still remain,” says Howard Meitiner, managing director at Carl Marks Advisors and former president and CEO of Sephora USA. He points out that in-person purchases still vastly outnumber online ones, by 85% to 15% overall, as of Q3 2024. “But if you look at the growth, such as the recent holiday season, the growth online is four times what we’re seeing in-store. And we’re seeing a decline in brick-and-mortar foot traffic,” he warns. 

“Stores are always going to be an important element of omnichannel experience," Meitiner says. "But what’s over-riding everything today is the convenience, efficiency and simplicity of online buying. As tech develops, stores are going to have rethink their reason to exist.”

What emerged as the chief motivator for shoppers in 2024, with inflation biting into everyone’s paycheck, was price, with convenience in close second place. Some 39% of shoppers now prioritize budget-friendly options, according to Shopify. The CX, in terms of golly-gee tech gimmicks, and even ease and cost of returns, remains a distant third. 

Meitiner expects to see growth in fairly simple ways of taking advantage of the omnichannel proposition, such as UNTUCKit, which allows shoppers to try on sizes and styles in their small-footprint stores, but then obliges them to order the items they want online via in-store touchscreens for home delivery. (This model is nothing particularly new if you remove the touchscreen order protocol – U.K. electronics retailer Curry’s has been doing it with paper and pencil since the 1980s.) 

This speaks to the real problem retailers are trying to solve, other than getting people to hit “buy” or pull out their wallet in a store – figuring out where to place inventory as close to the point of demand as possible. Nearly 8% of surplus stock globally will ultimately end up as waste, with about $163 billion of inventory tossed annually, according to a 2022 report from materials supplier Avery Dennison. Inaccurate inventory counts and data are also still a huge problem. According to software firm Blue Yonder, in 2023, the total cost of inventory distortion was $1.77 trillion, with out-of-stocks accounting for $1.2 trillion and overstocks totaling $562 billion. 

Furthermore, e-commerce may be growing like gangbusters, but it’s very hard to make a profit from it. “Very few companies make money online, and the reason is the cost of customer acquisition and retention, the cost of operational services such as free delivery, then managing returns,” says Meitiner. He points to standalone e-commerce companies such as The RealReal or Warby Parker. “They  make no money,” he claims. “What that shows is that the best model is one that integrates e-commerce and the in-store experience.”

It’s reasonable to retain a skeptical view of how technology will actually boost the retail CX in 2025. Ideally, it would help solve problems exacerbated by the online shopping model, such as bracketing (buying several sizes or colors of clothing at once), returns fraud (estimated at $101 billion in 2023), and failing to capture a sale due to lack of relevant product information (while this seems like low-hanging fruit, it’s expensive to generate). 

And, while brick-and-mortar shopping continues to dominate, there’s insufficient incentive to make the in-store experience something truly new. Being able to skate with your friends while shopping for Vans shoes is nice, for sure, but even the most enthusiastic proponents of “retailtainment” come up with examples that seem to involve little more than gimmicky props and expensive refits. 

This October, 2024 list of predictions for “The Future of Retail” from Forbes mostly repeats the predictions of two, three, even five years ago (virtual dressing rooms, availability of detailed information about product sourcing, AI-inflected personalized purchase suggestions), none of which has materialized in any widespread way. 

But it does end with a solid forecast: That, in 2025, retailers will be using AI and machine learning not just to track inventory but to predict demand, and adapt to disruptions before they become crises. In other words, the greatest benefits of tech in 2025 will be felt further back up the retail supply chain, where it can lower costs by better managing inventory and distribution; not in brick-and-mortar stores, or even online storefronts. 

Retailers, like consumers, will prioritize saving time and money for a good long time to come.