Retail is changing – fast.

Over 126 million shoppers hit physical stores over the 2024 Thanksgiving weekend, according to National Retail Federation (NRF). That’s a record-breaking surge, proving that brick-and-mortar retail is not just surviving, but thriving. 

But with this shift, retailers are facing new questions: 

• How do you measure in-store engagement? 
• How do you make every square foot for retail space more valuable?
• How do you bridge the gap between online and offline shopping?

In 2025, we’ll see brick-and-mortar retailers rethink their in-store strategy, leveraging computer vision and real-time analytics to optimize everything from promotions to shopper journeys. The line between online and offline will continue to blur, and AI-driven insights (the real kind, not the buzzword kind) will help create an advantage against competition. 

Let’s dive into the three biggest trends shaping 2025:

1. In-Store Analytics Goes Mainstream

Retailers have been flying blind when it comes to in-store engagement. That’s about to change.

While e-commerce brands had the advantage – tracking every click, scroll, and conversion, physical stores have been flying blind and getting further behind. But in 2025, that gap is closing. Retailers are using computer vision and advanced analytics to measure how shoppers interact with displays, promotions, and products in real-time.

And the need for in-store insights has never been greater. 76% of purchase decisions are made in-store – meaning retailers who fail to understand shopper behavior are leaving revenue on the table. (POPAI)

What This Means for Retailers:

• Smarter promotions: Adjust in-store campaigns dynamically, just like A/B testing online ads
• Stronger attribution: Brands will finally connect in-store media placements to actual sales impact
• Full shopper conversion funnels: Go beyond traditional heatmaps with new metrics that track the entire shopper journey

The days of guessing are over. AI-powered in-store analytics will give retailers the insights they need to maximize every customer visit – turning foot traffic into measurable revenue.

2. The Physical Store Resurgence: More Than Just Transactions

Consumers are craving and returning to in-person experiences. They’re not just walking into a store for a quick purchase – they want engagement, discovery, and convenience. Retailers are adapting, transforming stores into immersive, data-driven experiences.

How Retailers Are Evolving:

• In-store media is booming. More digital screens, interactive kiosks, and dynamic promotions based on real-time data
• Brands are using physical stores as media channels. Retailers will monetize high-traffic areas and partner with CPG brands for targeted in-store advertising
• AI-driven personalization is getting real. Retailers are using real-time insights to tailor promotions, recommend products, and optimize inventory dynamically

2025 isn’t just about driving foot traffic – it’s about making every store visit more valuable for shoppers and retailers alike.

3. Food Delivery Slows, Grocery Retail Evolves

Food delivery had its moment. Now, economic pressures are shifting consumer habits.

With inflation still hitting wallets, we anticipate that consumers will cut back on expensive delivery services in favor of in-store pickup and ready-to-eat meals. In response, we expect to see grocery retailers adapting with the following strategies:

• More grab-and-go options to cater to busy shoppers looking for convenience
• Smarter in-store personalization that tailors promotions based on real-time shopping behavior
• Increased investment in in-store technology to make grocery shopping seamless and frictionless

Retailers that understand this shift – and optimize their stores accordingly – will come out ahead.

The Retail Landscape is Evolving – Are You Ready?

2025 isn’t just another year – it’s a turning point. The gap between traditional retailers and AI-powered innovators is widening. Those who invest in in-store analytics, shopper insights, and smarter engagement strategies will drive growth and outpace the competition.