Over the past few years, ecommerce has seen its share of highs and lows. From the pandemic surge in online shopping to supply chain breakdowns, rising costs, and shifting customer behavior, it’s been a rollercoaster for retailers.
2024 continued the trend of ups and downs. Rapid advancements in AI-powered technologies, the loss of third-party data, stubbornly high costs, and rising consumer expectations have all contributed to challenges for brands — but it’s also created a wave of new opportunities.
As we head into a new year, agility will be the main driver of ecommerce success. Retailers must adapt to evolving conditions quickly in order to thrive in this competitive and changing environment.
Let’s dig deeper into the top trends that defined 2024 and what they mean for the year ahead.
AI Changed the Game for Ecommerce
Artificial intelligence (AI) advanced faster than anyone could have predicted in 2024 — especially generative AI — giving rise to both challenges and opportunities for brands.
AI brings a whole host of benefits for brands that leverage it effectively, including increased efficiency, less human error, and better experiences for customers. It’s also an effective tool for personalization, predictive product bundling, and combatting search abandonment — a persistent problem plaguing retailers and leading to trillion-dollar losses.
AI is not without its challenges, however. Adapting to new technology can be a struggle for brands. For one thing, since AI has evolved so quickly, finding talent with the experience and knowledge to utilize it properly isn’t easy. Further, ecommerce brands have so many AI-powered solutions to choose from, it makes it difficult for brands to find the right ones for their business. And finally, once a tool is selected, integrating it with the rest of the tech stack can be time-consuming and resource-heavy.
Research from Klaviyo shows there’s a huge disconnect between what brands think AI can do vs. its capabilities. They asked marketers what they wished they could use the technology for, and nearly half of respondents cited AI applications that already exist — performing marketing analytics (49%), comparing their company’s performance to similar organizations (49%), and predicting customer behavior and attributes (47%). In 2025, brands that understand how to leverage AI technologies will have an opportunity to streamline operations, stay on the cutting edge of innovation, and provide experiences that keep customers coming back. Retailers will increasingly turn to generative discovery — a combination of AI-powered personalization, natural language processing, machine learning, and behavioral analysis that can anticipate shopper intent and preferences — to deliver more accurate, predictive search results and personalization than standard AI.
Tightening Privacy Regulations Made Zero- and First-Party Data Essential for Retailers
Privacy regulations continued to tighten in 2024, as consumers were able to exercise more control over what data they share with brands. Several U.S. states have adopted stricter guidelines alongside action at the federal level; likewise, Europe’s GDPR continues to evolve as technology does. While this is definitely a win for shoppers, it makes targeting and collecting actionable insights harder for retailers.
With less access to third-party data, retailers need to rely on a combination of zero- and first-party data and insights. This requires building consumer trust and offering them value in return for their data.
In 2025, brands that find creative ways to collect more zero- and first-party data — like customer surveys, loyalty programs, and incentivized data opt-ins — will be better positioned to boost sales and retention. And AI-powered solutions that leverage affinity databases will be able to fill in the gaps where brands don’t have the data they need.
The Cost of Just About Everything Remained High — for Shoppers and Brands
Both retailers and shoppers felt the squeeze in 2024, as costs remained high and the economic future seemed uncertain. Data from Shopify shows that eCommerce growth in 2024 was slower than in 2023 — 8.4% vs 9.7%. With erratic consumer spending, the phrase “do more with less” took on new importance for brands looking to both cut costs and increase revenue.
Retailers turned their attention to technology costs, finding multi-product companies to partner with to streamline their tech stacks and reduce their total cost of ownership. And technology companies rose to the challenge, expanding their offerings to meet retailers’ changing needs.
Brands also began to focus more on growing retention as customer acquisition costs remained high. Investments in solutions to grow loyalty, increase AOV, and boost CLTV gave retailers an edge.
In 2025, retailers who import goods or materials may face increased costs from proposed tariffs, leading to a search for more ways to increase operational efficiency, cut costs, and promote customer loyalty. We’ll see more technology companies addressing these pain points, leading to leaner tech stacks and more deeply integrated solutions.
Rising Consumer Expectations Pushed Brands to Deliver Better Experiences
Consumers expected a lot from the retailers they shopped with in 2024, and those that delivered on those expectations saw increased sales and retention. What do today’s consumers expect? Personalized, frictionless, convenient shopping experiences.
Research from McKinsey shows that 71% of consumers expect companies to deliver a personalized experience, and 76% get frustrated when that expectation isn’t met. Brands that offer a deep level of personalization — whether it’s hyper-personalized search or tailored product recommendations — have a unique opportunity to stand out from their competitors.
Rising customer expectations also made omnichannel strategies more important for retailers in 2024. Ensuring shoppers have a seamless experience across channels — ecommerce stores, online marketplaces, social platforms, and brick-and-mortar locations — helps you build the connections necessary for long-term, mutually beneficial relationships with customers.
In 2025, customer experience will reign. Retailers that optimize every touchpoint along the buyer journey for personalization and ease will be able to acquire more new customers and retain existing ones.
2025: The Year of Agile Ecommerce
As we look ahead to 2025, the ecommerce industry is primed for a new wave of growth and innovation. Despite continued economic uncertainty, businesses that embrace new technologies and adopt integrated, data-driven solutions will have a solid foundation to navigate these complexities.
AI will play a pivotal role in the year ahead, enabling brands to deliver a more personalized shopping experience with relevant product recommendations and tailored messaging. And as more and more customers turn to ecommerce, brands will need to rethink their approaches to data collection and the mobile shopping experience. The key to success in 2025 will be agility. Retailers that stay attuned to emerging trends, adapt quickly to changes, and deliver exceptional customer experiences will be poised for growth — no matter what the future holds.
