Retail & commerce in 2025: What’s next and how to stay ahead

The retail industry is under pressure. Shrinking margins, declining customer loyalty, rising employee turnover, and mounting operational complexity are reshaping the landscape—and putting brands at a disadvantage.

Fortunately, faster, personalized, embedded payment options are helping retailers respond to these growing challenges while unlocking entirely new opportunities for growth and loyalty. 

Here are the top 5 key trends reshaping retail in 2025—and how payments options are helping retailers rise to the moment.

Inflation, labor shortages and rising transaction fees are squeezing margins across the board. As a result, retailers are under pressure to improve profitability while continuing to invest in their customer experience (CX) and digital innovation. 

McKinsey research shows that companies considered leaders in CX achieved more than double the revenue growth of “CX laggards.” This presents an opportunity for brands that are quick to respond to evolving customer preferences. For example, AI-powered personalized shopping experiences that use transaction data to deliver tailored promotions offer hyper-personalized checkout experiences that differentiate the brand. 

Additionally, tapping into Buy Now, Pay Later (BNPL) and other alternative financing options gives consumers the flexibility and affordability they need while boosting sales and reducing cart abandonment. 

In an age of endless options and price transparency, loyalty is harder to earn—and easier to lose. Shoppers are more deal-driven and less brand-loyal than ever. A 2024 Salesforce report found that 71% of consumers switched brands at least once in the past year, largely due to better value (66%) or convenience (44%) elsewhere. And, it’s expensive to lose customers. According to McKinsey, recovering the value of one lost customer can require the acquisition of three new customers.

Loyalty-driven branded payment solutions don’t just stop the bleeding. They empower brands to launch branded credit, debit, or prepaid cards with customized rewards and incentives—offering competitive value that creates stickiness for the long haul. When tied to transaction data, these programs can evolve into hyper-personalized loyalty engines that reward behavior, not just spend.

Embedded payments and white-label commerce solutions also give retailers new avenues to drive loyalty. Embedding payment processing, financing, and branded banking services make monetization easier while enhancing customer engagement. 

The checkout process remains one of the biggest levers in ecommerce success—or failure. Cart abandonment rates still hover around 70%, often due to slow checkout flows, lack of preferred payment options, or security concerns.

Embedded payments streamline checkout by integrating digital wallets, BNPL options, and one-click experiences directly into the shopping journey. This reduces friction, improves conversions, and delivers the fast, flexible experiences that today’s shoppers expect.

Moreover, the use of AI-powered fraud detection and chargeback mitigation reduces losses without hampering the customer experience. Secure payment processing using tokenization and biometric authentication bolsters consumer confidence while offering a friction-free way to purchase. 

Retailers face high frontline employee turnover, often due to slow wage disbursement and lack of financial flexibility. Embedded payroll solutions can help by offering earned wage access or branded payroll cards, enabling employees to (as the name suggests) access their wages as soon as they’ve earned them.

Every brand—from grocery chains to fashion retailers—can benefit from using integrated payments to provide employees with real-time access to their earnings via a branded card. The end result? Improved employee retention and satisfaction.

As more retailers go global, payments need to keep up. Embedded, multi-currency payment solutions make it easier to sell internationally without friction.

The ability to unify in-store, online, and mobile commerce payment systems to offer a seamless omnichannel experience can boost cross-border sales. 

In today’s high-stakes retail environment, the brands that thrive are the ones that treat every transaction as a strategic opportunity. Next-generation payment solutions are enabling this shift—enhancing loyalty and delivering seamless, connected experiences across numerous channels and touchpoints.

Modern payment technology—from flexible financing at checkout to branded cards with instant rewards to automated payouts for partners and staff—has evolved from a back-end function into a front-line growth driver. As commerce continues to transform, retailers that invest in these smarter, more integrated financial tools won’t just keep pace—they’ll set it.

Is your retail business ready to unlock the power of embedded payments? Discover how our solutions can help revolutionize operations and delight your customers at every step in their journey.