2025 Retail Technology Trends & Challenges

Executive Summary

Rizing, in collaboration with an independent research agency, conducted a survey targeting senior executives from leading fashion and retail companies in North America. The survey included a broad spectrum of retailers, such as fashion, grocery, convenience stores, lifestyle, home improvement, and specialty retailers. Responses were collected from C-level executives, Vice Presidents, Directors, and General Managers.

The goal was to assess the state of retail technology among top retailers with a focus on ERP, Inventory and Merchandise Management, Digital Commerce, and Supply Chain Management.

The research also sought to identify the most pressing challenges and priorities for retail leaders in 2025. Interestingly, the data revealed that while many companies have made significant improvements in modernizing their IT landscape, including some initial progress in AI usage, lags in cloud ERP and unified commerce adoption remain.

Key Findings at a Glance

• Top Challenges: Over 50% of retailers cite supply chain disruptions and economic uncertainty as top challenges in 2025.
• Full ERP integration remains a struggle: Only 17% of respondents have fully integrated their ERP systems across all departments and 39% are planning for expansions of their ERP implementation.
• AI Adoption is in the early stages: 70% of retailers say they are exploring AI, although only 4% have embedded it as a core business strategy.
• Omnichannel Gaps: Only 15% of respondents feel fully equipped for direct-to-consumer (DTC) and multichannel selling.
• Operationalizing Data & Analytics: Nearly 60% of retailers are still working on improving their analytical capabilities to anticipate market trends.
• Direct-to-Consumer: 28% claim they are partially equipped but still face gaps, while most struggle with limited capabilities or completely lack the ability to handle DTC and multichannel business models.
• Focus for the future: Survey respondents will be investing in a diverse range of technologies in 2025 – top investment areas are inventory and supply chain management, ERP modernization, and AI.

Managing uncertainty: The biggest challenges for 2025 are due to external pressures beyond a retailer’s control – economic uncertainty and supply chain volatility. Although these are not new concerns, the rate of disruption at a geo-political and macro level appears to have significantly increased.

This volatility in the market is driving a mandate for retailers to invest in transformative technology while at the same time keep costs under control. Resilience in the retail industry, in response to changing tides—is closely linked to the systems and processes in place and an organization’s ability to be innovative and agile. These retailers tend to view technology as a strategic enabler rather than a cost center.

Fast-changing Customer Preferences: Over 16% of retailers identify rapidly changing customer preferences as a primary concern, while only 13% [see exhibit 4] report significant improvements in their ability to anticipate market trends through current data analytics. This could be due to outdated technology, siloed data, and a lack of investment in tools that enable real-time insights.

Digital Transformation and keeping up with technology advancements: Retailers no longer question whether to transform digitally but instead focus on how to do it effectively; nearly 16% indicate keeping up with the rapid technology advancements as a challenge. There is a clear shift in how retailers view technology adoption throughout our findings in the survey.

Inventory & Supply Chain Management: Retailers continue to consider inventory and supply chain management as a technology challenge. This sentiment can be linked back to findings on the first question and concerns around volatility. Right investments in this area where end-to-end processes are considered rather than piecemeal solutions are likely to yield higher benefits.

Omni-channel, e-commerce and seamless customer experiences: With 14% citing delivering omnichannel experience as a challenge, seamless shopping experiences remain a work in progress. E-commerce too was cited as an ongoing challenge. As with the case with inventory & supply chain management, holistic solutions that can help orchestrate and deliver unified-commerce capabilities will be the right move for retailers.

Legacy systems: Some of the top concerns could also be largely due to operating on legacy systems, a network of disconnected and outdated ERP, Wearhouse Management, OMS, POS, and supply chain systems that are not designed for today’s fast-moving, omnichannel landscape.

AI in Retail: AI remains top of mind for most retailers. The focus is likely to be in identifying relevant business use cases of AI in Retail, moving beyond the initial hype. While there have already been interesting applications of AI in retail, companies will be looking for business scenarios that drive real ROI from investments in AI.

03. ERP Adoption & Digital Transformation

End-to-end ERP integration:ERP remains the backbone of retail and fashion operations, yet the data shows that the industry is still falling behind in ERP maturity.

• Only 17% of respondents have fully integrated ERP.
• Nearly 40% say there is limited integration across all business functions.

This highlights a significant gap in end-to-end ERP adoption, indicating silos exist not just across channels (e.g., eCommerce, POS, wholesale, retail) but also in critical functions like finance, HR, and procurement. More than 8% of retailers have no ERP which can be a significant disadvantage compared to competitors.

Integration challenges are slowing down cloud ERP adoption: Retailers are shifting towards modernization, as indicated by nearly 60% using cloud-based or hybrid ERP solutions yet concerns over integrating cloud ERP with existing legacy systems remain a significant challenge. This implies that retailers are looking for more agile cloud-based solutions to help them integrate existing systems and scale as they grow.

As many retailers scale and diversify their business models, they rely on various specialized applications for HR, order management, warehouse management, e-commerce management, and more. Usually, these point solutions are implemented as businesses grow organically or, in most cases, are inherited through mergers and acquisitions.

A best practice in such instances would be to have a clear Cloud ERP integration strategy from the outset of any transformation initiative, bringing in the right expertise to efficiently overcome any technical and process-related challenge. Retailers should also consider selecting software vendors with an ecosystem of integrated solutions that can address industry-specific needs.

Aside from integration, budgetary constraints continue to remain a challenge. This issue is closely tied to the lack of clarity around the ROI of Cloud ERP and other modern technology implementations.

Retailers can address these challenges by:

• Engaging experts to streamline integration efforts, minimize disruption, and conduct training programs to upskill employees.
• Adopting a phased migration approach to mitigate risks.
• Choosing a modern ERP solution, equipped with built-in integration capabilities to reduce complexity.

It is worth highlighting that the survey reveals a gradual and promising shift in how executives view technology adoption. It is no longer considered as just a technical challenge—but as an organizational transformation, as evidenced by executives citing resistance to change as a key barrier.

04. Omnichannel Operations & Inventory Visibility

Unified commerce remains an operational hurdle for retailers: Despite the surge in direct-to-consumer (DTC) and omnichannel retailing, the survey indicates a significant gap in omnichannel capabilities and readiness. The fact that only 15% of retailers feel fully equipped indicates that most retailers are still bridging the gap between e-commerce, brick-and-mortar, and third-party marketplaces. Business models such as buy-online-pickup-in-store (BOPIS), ship-from-store, and same-day delivery require modern order management and supply chain technologies.

In 2025, we see brands making a stronger push toward unified platforms to improve order fulfillment, inventory visibility, and customer experience [see exhibit 12]. Without the right technology in place, retailers will struggle to execute flexible fulfillment efficiently.

Inventory tracking and accuracy: In the face of growing consumer expectations, seamless shopping experiences across multiple touchpoints have become the norm, which means retailers must ensure inventory accuracy across all touchpoints. Yet only around 55% of survey respondents indicated they have the systems to provide real-time inventory visibility effectively. The rest lack complete confidence in their inventory visibility systems and likely face a high degree of manual effort to make it work.

05. Supply Chain Management

Managing supply chain disruptions: The rise of flexible fulfillment has created a growing demand for faster, more efficient delivery models and better collaboration with suppliers. However, the data reveals that less than 50% of respondents feel they have an effective supplier management system.

This indicates that most retailers have less-than-optimal supplier management systems, making them prone to supply chain disruptions, volatility, and an inability to respond to changing customer preferences. This is also reflected in the survey findings, which found that 26.36% of respondents cited supply chain disruptions as a significant challenge.

Fashion and retail brands will likely face several challenges without a robust supplier management system, including:

• Increased risk of supply chain disruptions – Indicated as a top challenge affecting 53% of respondents.
• Complexities managing inventory across multiple channels – Reported by 10% of respondents as a significant issue.
• Difficulty delivering omnichannel customer experiences – 14% struggle with creating omnichannel customer experiences, which rely heavily on supplier transparency.

Future-proofing the supply chain depends on end-to-end integration.

These insights point in the same direction: retailers must fully integrate their systems—ERP, POS, e-commerce, and other third-party tools—to enable accurate, real-time stock tracking across stores, DCs, and online channels. Success hinges on choosing the right core platform that allows data to flow seamlessly across different parts of the business. This enables retailers to:

• Improve order management: End-to-end ERP integration allows retailers to make profitable decisions and shorten delivery times by routing orders based on real-time demand, and proximity to the nearest stock location.
• Optimize stock levels: Real-time access to inventory data across brick-and-mortar, distribution centers, and online channels can help retailers manage supply and demand more effectively.
• Deliver a consistent customer experience: A unified platform gives consumers access to product availability, order status, and flexible fulfillment options, ensuring they can shop seamlessly across all touchpoints.

06. Data Analytics

Prioritizing Data Analytics: Retailers are at different stages of data analytics maturity. Over 40% of respondents report moderate to significant improvements in anticipating trends and customer preferences, while 28% are still building or planning to boost their data analytics capabilities. This suggests that while progress is being made, most retailers are still building the core infrastructure needed to support advanced analytics. This could be due to disparate systems, limited skilled resources or lack of strategic investments, requiring buy-in from key stakeholders to address these gaps.

It is promising to note that overall, there is a growing recognition of the importance of analytics among retailers, with most planning for continuous investment. The use of predictive analytics among this small group of retailers serve as examples of how impactful analytics can be when they’re fully integrated into business strategies.

In the coming months, investments in predictive analytics and AI-driven insights will be crucial as advanced AI-driven analytics mature and become core to a retailer’s business strategy.

Managing customer data: The survey results reveal a mixed landscape in the effectiveness of customer data management systems among respondents. Over half of the survey respondents said their customer data management systems are effective, which means these companies are better positioned to use personalized customer experiences to improve customer retention.

However, the remaining 45.83% fall short and may face challenges in achieving the same level of business optimization and performance. These organizations need to address technological shortcomings by adopting advanced customer data management tools and integrating customer data for a unified approach.

07. Pricing Management

Dependence on traditional pricing models: Pricing strategies have become more complex than ever, as retailers must balance competitive pricing, promotions, and markdowns across all sales channels while maintaining control of inventory levels and margin pressures.

The survey results indicate that while most retailers have set up basic pricing management capabilities, most are still facing issues when it comes to optimizing revenue fully.

Retailers risk eroding margins without lifecycle pricing capabilities. These tools can help retailers to dynamically adjust prices based on multiple factors such as competitor intelligence, demand, seasonality, and trends. Without it, retailers face a higher likelihood of:

• Increased markdown rates
• Overstocked items being sold at steep discounts
• Out-of-stock instances of high-demand items

Pricing decisions should be strategic – not reactive.

In an industry where markdowns and discounts are crucial to sales performance, solving these issues can significantly affect the bottom line. Retailers who have invested in the technology are seeing real benefits:

• 7% have seen a reduction in overstock and stockouts.
• 24% use it to optimize initial price setting.
• 15% leverage it for markdown optimization.
• 7% use it for dynamic pricing based on demand and seasonality.

08. AI in Retail

AI remains largely untapped in retail: AI adoption is expected to accelerate drastically in the coming years, given its potential for cost reduction, improving operational efficiency, and delivering personalized customer experiences.

The data reveal that retailers are still in the early stages of AI adoption. In the months and years to come, we will likely see further embedding of AI across more areas of retail operations. Competitive pressures will likely accelerate AI adoption, especially in optimizing supply chains and improving the customer experience.

09. Investment Priorities for 2025

Supply chain resilience remains a priority: Inventory and supply chain management are top priorities on the list; this focus aligns with the industry’s biggest challenges heading into 2025, as indicated in exhibit 2. Substantial investments in these areas reinforce the move toward real-time data integration, which can help retailers address the need for agility, cost reduction, and revenue growth.

The shift toward smarter, data-driven operations: ERP, AI, and predictive analytics will also see significant investments. This indicates an industry-wide shift toward automation and advanced data analytics to anticipate market trends and customer behaviors better. In-store Technology Upgrades (11%) and Commerce Platform Initiatives/Upgrades (9%) are likely tied to improving omnichannel integration and direct-to-consumer (DTC) capabilities.

What does this mean for the industry? Retailers are making practical, technology-driven investments to build more resilient retail operations.

Retail 2025 Technology Trend Survey: Concluding Notes

As we move ahead in 2025 and beyond, economic uncertainty, supply chain volatility, and rapidly evolving customer expectations seem to be top of mind for retailers. Many retailers appear to have made significant strides in bring new technology innovation to the table. Some have started the journey. At the same time, it was observed that challenges persist in fundamental areas such as delivering omni-channel experiences, inventory visibility and supply chain modernization.

To thrive in this evolving landscape, retailers should prioritize a few key areas:

• Holistic System Integration: Rather than addressing technology challenges in isolation, retailers must adopt an integrated approach that connects ERP, inventory management, order processing, and customer-facing systems.
• Data-Driven Decision-Making: Real-time visibility and predictive analytics are becoming increasingly critical. Its impact on inventory optimization, pricing strategies, and personalized marketing will soon be widely prevalent, forcing retailers to reassess their data analytics strategies.
• Supply Chain Resilience: Complex supply chain disruptions are becoming common in today’s market, calling for retailers to leverage technologies that improve responsiveness throughout the value chain.
• Unified Commerce: The divide between consumer expectations and current omnichannel experiences represents both a risk and an opportunity. Investments in agile platforms that support seamless customer journeys across all touchpoints will be essential.

While economic pressures may tempt organizations to delay investments, the survey findings suggest that technology modernization is not optional but rather vital for long-term success. Retailers who will thrive in 2025 and beyond will be those who can effectively execute their digital transformation journey, breaking down legacy silos while building an integrated, data-driven foundation necessary for retail excellence.

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