How you can thrive in 2025…with data-driven retailing

It’s been another tough year for retailers: ONS data tracks retail sales dipping and rising over the course of the past 12 months, while in September, it was revealed that 6,945 shops closed in the first half of 2024. While new store openings have offset this startling statistic, resulting in a net closure of 12 stores a day, it’s still a downward trend for retailers on the high street. Will 2025 be a better one for retailers – and how can data help?

Exploring the ‘why’ of returns
According to one set of research, returns cost brands – especially ecommerce brands – a huge £60bn a year. In 2025, the returns debate will evolve to focus more on the ‘why’. The challenge of how to balance the cost of returns against customer experience is an issue that retailers have been struggling with, and which shows no signs of going away.

Many retailers have started to charge for returns, but this has caused a customer backlash and, in some cases, an impact on loyalty – especially when customers are having to pay for returns on items where the fault lies with the retailer.

With retailers starting to feel the effects of introducing these charges, they are now looking for ways – outside of only charging for returns –  to help reduce returns.

We therefore expect retailers to take a more inward look – using the data they hold on their customers’ transactions – to better understand their customers’ shopping habits and loyalty, and accordingly make future decisions based on this.

They can interrogate their data to understand customer lifetime value, and look at metrics such as spend and tenure, and use this to inform decision making. For example, they could offer free returns to loyal, regular spending customers, rather than to one-off or low spend customers.

The retailers that take the time to interrogate their data and who treat returns as a learning exercise will steal a march on the rest of the field.

The rise of real-time
We expect to see real-time push notifications opening up new revenue streams for retailers in 2025. After years of big talk, retailers and marketers are ready to move on from ‘data dithering’ and strike before the window of opportunity shuts.

They need to move quickly: somebody buying suncream may be on their way to purchase beachwear from another shop, or to change their pounds into foreign currency. Within seconds of the transaction going through, retailers need to push offers in front of the customer – whether that is an end-of-season discount on summer sandals, or a deal from an affiliate bureau de change.

Until now, retailers may have taken days or even weeks to digest the data and push deals out to customers – in many cases, they will have returned from their holiday by the time an offer reaches them. It can’t go on like this: with spending remaining squeezed, retailer will be forced to act more quickly, and using real-time push notifications is a highly effective way to increase wallet share and drive up revenue.

Dean Standing is chief revenue officer at Sagacity