A retailer’s New Year’s resolutions for 2025

As a retailer, stepping into 2025 feels like opening the door to a fresh new chapter. Last year had its ups and downs, but you're ready for a fresh start. As you open the doors of your store, you see that the shelves are stocked and the lights are on, but something in the air feels different. 

This year, you don’t just want to go through the motions—you want to flourish! It's time to take your business to the next level. It is time to reflect on what worked, learn from what didn’t and set resolutions that will drive lasting success.

For retailers, peace of mind comes from overcoming the complexities of inventory management. You must strike the right balance between minimizing waste, matching stock with demand and keeping shelves full but not overstocked.

Grocery retailers, for example, must manage multiple channels, including in-store, online fulfillment, marketplace and third-party logistics fulfillment. This management helps them avoid walk-in shoppers competing with online delivery fulfillers for the same limited inventory, which can lead to out-of-stock items and empty shelves. 

Still, 45% of online shoppers are finding that their selections are out-of-stock, which costs grocers nearly 8% in revenue. Furthermore, 52% of executives surveyed reported that fresh food is especially vulnerable to spoilage and late deliveries, leading to an annual loss of USD 18.2 billion.

AI can help by providing clearer insights into inventory gaps and guiding smarter, waste-reducing strategies, particularly by using intelligent safety stock to manage stock levels with real-time demand signals.

Retailers need systems that manage supply chain complexities, offer real-time inventory visibility and streamline replenishment. By using AI-driven tools and collaborative planning, you can ensure timely, efficient stock management. And you’ll sleep better at night knowing you’re keeping shelves stocked for customers while still minimizing waste.

Start the New Year by adopting tools and strategies to help you declutter your returns and turn a burdensome process into a streamlined, efficient system. Retailers often struggle with the financial and environmental toll of returns, but by embracing a circular approach, they can turn these challenges into opportunities for both sustainability and profit. 

Returned goods come with significant financial and environmental costs. It is estimated that the retail industry could save USD 125 billion annually by focusing on returns reduction. More than 4 billion tons of returned US products also went to landfills in 2022, and 24 million metric tons of CO₂ emissions were released from transporting those goods. 

Retailers can benefit from advanced capabilities that prioritize shipping out remaindered items versus pulling from warehouse stock.  By recirculating returned items and using soon-to-be-marked-down merchandise, retailers can reduce waste, cut reverse logistics costs and keep products out of landfills. 

AI can also optimize the return location based on predicting the likelihood of returns, so that returned items can quickly be restocked at the least cost and resold at a profitable margin. This approach also speeds up recirculation of time-sensitive goods and optimizes the handling of remaindered inventory.

This new year, focus on genuine connection as the foundation of your customer service success. A store associate's smile and a call center rep’s voice can create a more positive experience through the power of human connection. 

For retailers, customer service means more than just answering questions. It’s about enhancing response times, improving accuracy and empowering your call center agents with the insights and tools they need to engage with customers on a personal level. This helps turn each interaction into a lasting relationship. And those lasting relationships are key because 93% of customers are likely to make repeat purchases after excellent customer service. 

With generative AI working alongside human agents, retailers have a unique opportunity to create a dynamic, personalized experience that redefines customer engagement. According to the IBM IBV, 65% of customer service leaders expect generative AI to increase customer satisfaction. 

By integrating prebuilt generative AI with your enterprise data, retailers can streamline operations, reduce agent training time, and speed up order inquiry resolutions. 

For example, a call center representative who uses an AI assistant can instantly verify if a coupon can be applied retroactively to an order and automatically apply it without manual intervention. Ultimately, it’s the seamless fusion of cutting-edge technology and a human touch that builds customer loyalty and drives long-term business success.

Prioritize saving this year with AI tools that optimize your fulfillment to reduce costs and maximize efficiency. For retailers looking to boost profitability, this is the year to reduce costly end-of-season product markdowns, avoid missed sales due to stockouts and optimize delivery fulfillment for speed and margins.

This strategy is particularly critical because, while sales might be growing, profit margins are not necessarily following suit. A recent study of 50 public US retailers revealed that between 2012 and 2022, profitability dropped from 13.8% to 8.3%, even as online sales grew from 9.4% to 25.6%. 

By using AI-based promising and fulfillment, retailers can analyze inventory scenarios through the lens of profitability, allowing them to strategically balance expensive factors such as markdowns and stockouts with on-time delivery.

In fact, 57% of retail executives reported that AI has driven both an annual revenue increase and an over 15% operating cost decrease. This means that retailers that adopt AI tools can save more, manage inventory levels better and plan for a profitable future.

2025 is the year to embark on a new adventure by revolutionizing your retail business logistics. To stay competitive, retailers must embrace innovation and tailor their strategy to meet customer expectations. 

The urgency for faster delivery has never been greater, as customers demand quicker, more convenient service than ever before. More than 68% of online shoppers cite shorter delivery windows as the determining factor for placing an online order. 

Greener delivery is also top of mind for many consumers. In fact, 69% of consumers said that sustainable shipping has influenced their past purchases, and 76% of shoppers say they would pay an extra 5% for more sustainable shipping.

The rise of last mile fulfillment strategies, including innovations such as dark stores and cross-docking, has revolutionized how retailers meet these expectations with cost-effective, rapid delivery. By streamlining local distribution and shortening delivery times, these strategies ensure faster, more efficient service. This improvement in service is what boosts customer satisfaction while keeping costs in check and helping you gain more customers into your footprint coverage for same day delivery.

The key to achieving these resolutions is a flexible, composable and scalable order management system that can effortlessly handle seasonal spikes while driving profitability and success. IBM Sterling® Order Management can help you optimize inventory, reduce errors and speed up fulfillment while adapting quickly to market shifts and seasonal changes. Keep your New Year’s resolutions while pushing your business to new heights.