Juphy’s Weekly E-Commerce News Express – 20-24 January 2025
Ceyda Duz
This week, we explore how 2025 is set to be a transformative year for retail, with AI integrations revolutionizing the industry and strong consumer spending trends driving significant growth. We’ll also dive into effective strategies for tackling retail returns, reducing friction, and building lasting customer loyalty. Plus, stay updated on the latest product developments from Amazon, Omnisend, and Cloudways, as they continue to shape the future of e-commerce.
2025: A Transformative Year for Retail with AI Integration Consumer Spending Trends
Deloitte’s 2025 U.S. Retail Industry Outlook predicts a 3.1% growth in consumer spending, with durable goods seeing a sharper increase of 4.7%. While economic conditions remain favorable, consumers are more price-conscious, favoring discounts and affordable brands over loyalty. This shift highlights the need for retailers to balance pricing strategies with value-driven offerings to meet consumer expectations.
Generative AI Boosts Retail Performance
Generative AI is shaping up to be a game-changer for retailers in 2025.
- Improved Conversion Rates: Retailers using generative AI tools, such as chatbots, saw a 15% increase in conversions during Black Friday.
- Enhanced Efficiency: AI-powered tools are helping with precise demand forecasting, inventory management, and streamlining supply chains.
- Personalized Experiences: Seven in 10 retail executives anticipate implementing AI tools this year to deliver hyper-personalized shopping experiences, from product recommendations to interactive features like voice questionnaires.
Evolving Retail Strategies
To stay competitive in this dynamic landscape, retailers are adopting innovative approaches:
- Convenience First: Almost half of retail executives emphasize the importance of inventory visibility and last-minute delivery options for meeting consumer demands.
- Shoppable Media Growth: Social commerce and interactive shopping experiences are on the rise, especially among Gen Z consumers. Partnerships like Netflix and Google Lens allow viewers to shop directly from entertainment content, expanding the boundaries of shoppable media.
- Store Innovations: Retailers are investing in immersive experiences and technologies like augmented reality, virtual reality, and interactive displays to elevate in-store shopping.
Workforce and AI Integration
Retailers are also addressing workforce challenges, including labor costs and turnover rates. Two-thirds of retail executives plan to invest in workforce hiring and retention while leveraging AI tools to enhance employee efficiency, such as task guidance and instant support.
Outlook for Retail in 2025
Deloitte describes 2025 as a pivotal year for retailers willing to embrace digital-first strategies and AI-driven solutions. As economic pressures persist and consumers demand more value for their money, retailers that prioritize innovation and efficiency are poised for success.
Tackling Retail Returns: Reducing Friction and Building Loyalty
Returns are a natural part of retail, yet they remain one of the retail industry’s most challenging hurdles. For shoppers, they’re an inconvenience. For retailers, they represent a significant financial and logistical burden. From pre-purchase strategies to reverse logistics, addressing returns effectively can transform a pain point into an opportunity for improved customer satisfaction and loyalty.
The Scope of the Returns Challenge
In 2024, retail returns were estimated to cost the industry between $685 billion and $890 billion, according to studies by Appriss/Deloitte and the National Retail Federation (NRF). Returns now account for up to 17% of retail sales, with online purchases driving significantly higher return rates (25%) compared to in-store purchases (9%). Fraudulent returns alone cost retailers over $100 billion annually, further compounding the issue.
While stricter return policies might seem like a solution, they can alienate customers. Nearly 55% of shoppers avoid retailers with restrictive policies, while 70% make additional purchases following a positive return experience. Striking the right balance is essential to reducing returns while maintaining customer trust and loyalty.
Pre-Purchase Prevention: Reducing Returns Before They Happen
The best way to address returns is to prevent them. Retailers can use AI and data-driven insights to:
- Optimize Product Information: Detailed sizing guides, accurate photos, and clear product descriptions help shoppers make informed choices.
- Identify and Deter Abuse: AI-powered systems can flag habitual returners, allowing retailers to take appropriate action.
- Personalized Fit Recommendations: Advanced tools and virtual try-ons reduce the need for bracketing (ordering multiple sizes).
Retailers like Amazon have experimented with “try-before-you-buy” services but are now shifting toward enhancing digital tools for better purchase accuracy, avoiding the operational complexity of such programs.
Improving the Return Process: Convenience is Key
When returns are unavoidable, simplifying the process can turn a negative experience into a brand-strengthening opportunity. Many consumers prefer in-person returns, even for online orders, with 60% opting for the buy-online-return-in-store (BORIS) model. By providing clear policies, faster refunds, and multiple return options, retailers can align their returns processes with consumer expectations while fostering trust and repeat business.
After the Return: Minimizing Waste and Maximizing Value
The post-return phase is just as critical. Once merchandise is returned, retailers face decisions about whether to restock, refurbish, resell, or recycle items. Currently, only 45% of returned goods are resold, with 11% of apparel returns ending up in landfills. Sustainable reverse logistics strategies can mitigate environmental impacts while recovering value from returned products.
A Path Forward
The retail industry must embrace a holistic approach to returns, addressing challenges at every stage:
- Before the Purchase: Equip consumers with tools for confident decision-making.
- During the Return: Provide seamless, customer-friendly return options.
- After the Return: Implement sustainable, efficient reverse logistics processes.
By tackling returns comprehensively, retailers can reduce costs, build consumer trust, and turn returns from a liability into a strategic advantage.
Amazon’s New Tool for FBA Sellers
Amazon has introduced the “Inventory Defect and Reimbursement” (IDR) portal to support FBA sellers in managing inventory issues more effectively. This centralized platform addresses common challenges like warehouse damage, lost inventory, and customer returns, offering greater visibility into defect statuses and resolutions. Sellers can access detailed insights, track reimbursement claims, review defect trends, and understand the rationale behind decisions. By consolidating this information into one tool, the IDR portal aims to simplify operations and improve transparency for sellers.
Omnisend Enhances Reporting Capabilities
Omnisend has upgraded its e-commerce marketing platform with advanced reporting tools. Merchants can now track the performance of emails, SMS, and push notifications in one place, across any date range. The update enables detailed comparisons of revenue generated by each channel and offers full data history. Additionally, businesses can customize sales attribution, giving them greater control over campaign insights and strategy.
Cloudways’ AI-Powered Solutions for SMBs
Cloudways has launched Cloudways Copilot, an AI-driven suite designed to help small and medium-sized businesses with intelligent managed hosting. This tool automatically detects and diagnoses website issues, providing real-time support to resolve problems. The introduction of AI-powered diagnostics marks the first phase of the Cloudways Copilot rollout, aimed at streamlining website management for digital businesses.
Juphy AI Earns the “Built for Shopify” Certification
Great news for Shopify merchants! Juphy has officially received the “Built for Shopify” badge, a mark of excellence awarded to apps that meet Shopify’s highest quality standards. This certification guarantees smooth integration, top-notch performance, and an optimized user experience for merchants. With features like personalized product recommendations, automated customer support, and multilingual capabilities, Juphy’s AI Agent is a game-changer for e-commerce businesses. By earning this badge, Juphy AI reaffirms its commitment to helping merchants grow and streamline operations effortlessly. Ready to see the difference? Try Juphy AI now: apps.shopify.com/juphy
Key Takeaways
2025 – A Transformative Year for Retail: AI is reshaping retail in 2025, boosting personalization, demand forecasting, and operational efficiency, leading to higher conversions and improved customer satisfaction. Consumer spending is projected to rise 3.1%, with a focus on durable goods. However, shoppers are more price-conscious, favoring discounts over brand loyalty.
Tackling Retail Returns: With retail returns reaching $890 billion in 2024, businesses are focusing on innovative solutions to improve the return process. AI-powered tools are simplifying returns, detecting fraud, and optimizing inventory management. Additionally, brands are leveraging customer-friendly and sustainable return policies to build trust and loyalty.
Amazon’s New Tool for FBA Sellers: Amazon’s latest centralized portal for FBA sellers is a game-changer, offering better control over inventory defect management. The tool automates reimbursement claims, provides detailed defect insights, and saves time by streamlining operations. It’s a valuable resource for sellers aiming to recover revenue and improve efficiency.
Omnisend Enhances Reporting Capabilities: Omnisend’s advanced reporting features now give merchants detailed insights into email, SMS, and push notification campaigns. With customizable attribution metrics and data-driven recommendations, brands can refine strategies for maximum ROI and improve the effectiveness of their marketing channels.
Cloudways’ AI-Powered Solutions for SMBs: Cloudways is empowering small and medium-sized businesses with its new AI tool, Copilot. Designed to diagnose and resolve website issues faster, Copilot delivers real-time support and insights, helping businesses minimize downtime and operate more efficiently. This innovation ensures SMBs can stay competitive with seamless web hosting solutions.
