Blog
Share:
The Global Executive Research 2025 report, prepared by Ebeltoft Group and World Retail Congress, provides insights into the challenges and barriers faced by retail leaders. The year 2025 is expected to be a period of redefinition of priorities for the retail sector. Companies will need to redefine customer relationships, implement new approaches to recruiting and developing teams, and accelerate technological implementations, which are now becoming a significant foundation for competitive advantage.
Cautious optimism and operating cost pressure
Despite a challenging economic situation, executives from the retail industry are confident about the future of the companies they work for. They anticipate that their companies’ profits in 2025 will increase compared to the previous year. 69% of them are optimistic about the next five years (up to 2030). However, when asked about the immediate future of the entire retail industry, the percentage of optimistic retailers drops to 42%.
Despite their faith in their company’s adaptive capabilities, retailers are aware of the need to modify their business models. Unsurprisingly, operating costs – such as wages and rents – are expected to rise, and margins will remain under pressure. 87% of respondents indicate the need for at least a partial change to ensure their company is ready to face current challenges, with 16% believing they need a complete overhaul of their business model (a 2% increase year-on-year).
Customer focus and the importance of physical stores
The number one priority cited by retailers is adapting to changing consumer behavior. This was indicated by 68% of respondents, a significant 14% increase compared to the 2024 study. However, there is a disconnect between awareness and action – only 42% believe their company is handling this sufficiently well. More and more retailers admit that their enterprise is not sufficiently customer-centric, and only about half (52%) feel that customers are loyal to their brand.
It is also worth mentioning that eight out of ten retail executives (79%) place the physical store among the top three most commercially important channels – which is still the best result (ahead of online stores with 56% mentions and marketplaces with 27%), but also represents an 11% decrease compared to last year’s study, which may signal changing priorities and the need to optimize store networks.
AI and digitalization are important, but difficult to implement
The integration of artificial intelligence (AI) and digitalization is perceived by 69% of retailers as crucial for maintaining competitive advantage. Both initiatives hold a high position in strategies for 2025. Furthermore, fewer retailers than in 2024 encounter financial barriers or time constraints in this area, suggesting increased investment and greater prioritization.
However, significant obstacles still exist in the implementation of AI and digitalization – primarily due to skills gaps among employees. This is a strong barrier to the development of artificial intelligence in businesses. Additionally, retail executives report problems with IT infrastructure, which hinders them from taking appropriate action. Thus, despite the willingness to invest, a lack of suitable talent and technological infrastructure may impede the full utilization of AI’s potential in businesses.
Labor shortage is a widespread challenge in retail
Generally, labor shortages remain a huge challenge for retail executives in 2025. Almost all (94%) face problems with hiring new employees. As mentioned above, recruitment difficulties for suitable personnel are particularly evident in IT and technology departments, as well as store operations, posing one of the biggest problems for the industry.
In response to these barriers, retailers primarily focus on strategies related to investing in employee development (63%), fostering company culture (49%), and investing in artificial intelligence and task automation (38%). These investments are perceived as extremely useful in attracting and retaining suitable talent.
Only one in four retailers (27%) offers more competitive salaries and additional benefits, which is a decrease of 15% compared to the previous year. This suggests a strategic shift towards building long-term employee engagement through professional development and a suitable work environment, rather than just salary increases.
Sustainable development – growing expectations
Among retail executives, awareness and dissatisfaction with current corporate actions regarding sustainable development are increasing. 40% believe that the company devotes too little attention to this topic (a 12% increase compared to 2024). Sustainable development should therefore become an increasingly integral component of business strategy.
Among the actions planned by market leaders for 2025, the priorities are adapting operations to regulations and reporting standards in sustainable development (51%), designing more sustainable products (46%), and reducing the ecological footprint in operations and the supply chain (43%).
Summary
The Global Executive Research 2025 report presents a picture of an industry that, while optimistic about the future, is also aware of the need for transformation. To maintain profitability and competitiveness, retailers must not only react to current challenges but also proactively shape their future, based on innovation and a deep understanding of customer and employee needs.
In the coming years, success in retail will be determined by: adaptation to changing consumer behaviors, investment in talent and organizational culture, strategic utilization of AI, and consistent pursuit of sustainable development.
The Global Executive Research 2025 report is the third edition of a joint project by Ebeltoft Group and World Retail Congress. It is based on the results of surveys conducted among 105 retail executives. The study was conducted from January 31 to March 7, 2025.
