Retail Trends 2025 | LEAFIO AI

welcome everyone to Leia retail podcast and today we are diving deep into the future of retail exploring the key technology trends that are shaping the industry in the upcoming year uh with rapid Innovation evolving consumer expectations and unpredicted Industry shifts uh staying ahead has never been more crucial that's why uh spotting the key retail technology Trends it's not just about keeping up it's about remaining indispensable in the world where adaptability is everything so today we're uh will be covering Global retail technology Trends uh with insid from our outstanding International expert team so uh Victor Hart inventory optimization expert North America Cecilia Flores Castillo a retail supply chain expert laam Anna Irma retail efficiency expert Europe Victor Novak merchandising management expert

southeast Asia and myself Helen K and I'm the CEO in Le AI so let's get started uh by setting the stage with a quick overview of uh the um most important uh retail Trends uh redefining their retail R landscape according to the total retail survey 76% of respondents expect their company's overall technology budget to grow over the next year while only only 18% foree a reduction in Tech spending this trend reflects the strong IND industrywide focus on technological advancement uh so um what are we going to talk today and the recent Innovation trends that are uh redefining the retail sectors uh are so uh first and I think not surprisingly the artificial intelligence and everything that is connected with it um unified Tech ecosystems uh inventory

Automation and control big data and Retail analytics and computer vision and image recognition of course each and every topic is really shaping and uh influencing the Retail Landscape uh so we want to talk a little bit deeper about um these topics and we will start of course from the ai ai has transformed retail operations globally AI is at the heart of retail Innovation worldwide and we are hearing it from all the parts of the world from all the conferences uh really everybody are so uh excited about the influence of the AI and a study by Gartner indicates that 91% of retail it leaders are prioritizing AI Investments by uh 2026 so we can only imagine the amount of money that will be invested in AI in retail in the nearest years so AI has shifted from being experimental

Technologies to the essential component of comprehensive uh and competitive retail strategies so um as we see and as we hear it is on the mouse of everybody uh and what are the core advantages so Victor Hart let's start with you great thank you Helen um AI offers many really profound business um impacts and benefits fits across um all aspects really of retail operations but i' just like to highlight um a couple that are really vital to ongoing competitive advantages and I'd like to start with Aid driven assortment management so globalization has sparked fascinating and unexpected Trends in the food industry as was highlighted in food report 2025 a rising interest in local Cuisines is driving unique flavor combinations leading to an evolving and diverse array of food products in supermarkets and tracking the

performance of these products you know deciding when to expand items or categories or when to dis uh continue items has become a task really ideally suited for artificial intelligence and as a result more retailers are adopting automated assortment planning software powered by smart algorithms and this technology enables them to really keep Pace with fast changing trends reducing the risk of financial losses and overstocks and so this enables them to take a really datadriven approach to ensure that they are selling the right products in the right regions throughout their chain to keep Pace with um those fast changing Trends now once they identify what products they are selling they have to be sure that they've got the inventory available to put those products on the Shelf so that the end consumers can come in and buy them and that's where um demand planning and inventory optimization comes into play and AI is really a GameChanger in the

demand planning process helping retailers to better predict sales Trends to optimize their stock levels and reduce both Overstock and stockouts of course if we o have overstocks that means that we have excess Capital tied up in inventory that's not moving that could be better invested elsewhere in the business and then of course if we have stock outs that means we're losing out on sales because we don't have that product available for our customers when we want them so by analyzing historical sales data seasonality and even external factors like weather public events or economic conditions AI powered demand forecasting models can provide accurate Dynamic predictions so this allows retail businesses to maintain lean inventories improve their cash flow and ensure the right products are always available at the right time minimizing loss sales opportunities on the one hand and eliminating the risk of excess stock and wastage on the other hand and just

as an example to provide some some numbers behind that over our years working in retailers all across the globe of all shapes and sizes we've consistently um had clients reduce their overstocks by around 50% as an example so releasing that cash flow back into the business while at the same time eliminating about half of the Lost sales that they've been experiencing because they have the right product available when they need it so some really profound results driving better performance on the bottom line of the business by the way uh in one of our previous podcasts uh we as Jeff for were discussing the AI driven assortment management uh and uh he was sharing his uh uh really deep experience on how it was done uh like for decades previously and how it can be done much easier uh I mean the clusterization of items clusterization of stores and clusterization of categories how it can be done much easier with the help of the AI driven tools so if you're interested

in that you can uh take it out great so talking about this topic I really think it's important to add a few points because when we talk about data informed decisions and AI adoption we for sure need to consider the pricing optimization and also the promotion management where AI can Empower retailers to dynamically first adjust prices and then based on real-time demand competitor pricing and historical sales data I cast some Predictive Analytics that can help us uh achieve two things the first of all uh optimizing the pricing strategies and then maximizing profit margins now when we talk about promotion uh and promotional management AI tools can analyze past promotions and help us during before during and after all of the execution allowing for more effective and that in marketing campaigns so this is from one side and more related to productive analytics now if we go to another field of AI exploring into computer vision and AI

image recognition we have uh the possibility now to optimize our Space Management in the retail stores so if we take into consideration computer vision which will drive some information from data images or video here we have the possibility to optimize the checkout free stores so now the Retail Landscape for sure has changed and we have some uh systems available that can track customer movements and purchases substituting or even replacing this uh checkout lanes that used to be the only way of working a few decades decades or even years ago now if we talk about AI image recognition we can consider that it can be used to detect shelf avilability monitoring and also to identify if we have some empty spaces or even misplaced products so now technology has a big leap and we have Technologies available for example the latest AI release by uh our Shelf efficiency solution where our algorithm can achieve accurately the detection of

empty spaces in the shelves and also can help us enase the display management detecting this type of issues across all the store locations so this advancement enables retailers to swiftly address product gaps maintaining optimal on shelf availability and elevating the customer experience uh sounds nice and all these advantages uh I guess uh are like great in terms of uh increasing the revenue and increasing the margin uh in terms of retail business but uh of course uh we need to consider the pitfalls as well so of course everything uh that was just sad it is all very promising but we have a lot of examples uh for example like uh wfirs in famous closet for uh 14,000 K Us doll uh and some other examples um when the AI was not under the control or when AI was making all the decisions

and uh we see some not very nice results of it so let's explore what retailers should watch on for so Anna can you please share some common pitfalls from your experience yeah thank you very much for giving me the word yeah this is true that while like maybe 90% of our communication with the current customers and potential customers we are like in some way discussing the AI there are some a lot of questions about AI everyone wants AI everyone is interested in AI but uh not all understand like not all people understand like the consequences and some pitfalls of using the AI so first of all we need to understand that AI is based on utilizing the data that huge amount of the data so data is crucial here and that means that AI works with some like standard situation even this is like if this is a situation that is repeated for example like several times per year still it's like some seasonality it's still some standard situation but when some Force

measure situation occurs when something unexpected occurs like covid different Wars uh like some climate disasters and so on so uh this is like something that mislead AI to a different direction and moreover like some people are used and they are relying on AI in their work and they don't uh know and there is some chaos in understanding what to do when AI is not working so this is one of the like U one of the pit Falls of utilizing the AI Technologies uh the second one is of course like the data dilemma uh the in case of using thei technology it's very important to have uh the high quality and comprehensive data and uh what we've noticed like when we are like Gathering the data when we are collecting the data for the project uh sometimes data is stored like in different solutions in different products and it is a challenge to gather everything in one place so we understand that in order to work AI uh for AI to

work in the efficient manner we need like a huge amount of data it should be like the mature data quality data and uh data that is gathered in one place and provided in a very like uh Weck reaction so this is like very important and it's like the basement for using thei technology uh so these are like the main uh at least the main pitfalls that I face during our communication with the clients yeah I just wanted to add here also uh during the meetings that we have with the customers typically data is one of the challenging uh areas that we have to discuss integration process it's very important part for every project uh and uh I completely agree here with an that U having robust quality data is very important key to success but also we have to consider that like retailers now in the modern world when we have so many changes happening technology is uh growing exponentially uh this environment is extremely uh competitive

so if you if compan is Desiring to stay competitive we constantly have to add more and more points that we have to consider to remain precise and um answer on the customers demand and and here examples of such factors that we can consider like you can have a great database with all the nomenclature that you have in the company uh with all the suppliers information and so on but still there are some external factors that you also have to consider like for example weather or some holidays or it's some marketing activities because your people in a company are so creative that they constantly uh invent something new and this can have an impact on the on the demand so that is why it is so important to have um tool that is adaptable that is uh provided by mature company and that can configure and also allow you to consider more data points than just simply those that you have in your database which are kind of limited uh and still uh to what Helen mentioned um like AI out of control not controlled by the people we really uh I think that

there is a bias in companies today when it may seem that if we Implement AI it will do everything for us but but uh still we should not exclude and uh we should not underestimate how important it is the human intervention still like uh ml is great it's very precise it's super accurate but it is like by its nature it's always backward looking so it is based on the history on the data it can make forecasts uh in a normal environment in a normal conditions but let's imagine that we're doing something we're going extra miles so we're increasing our parking lot near the store or maybe uh again we are upgrading our service uh level so we get more demands and for machine learning without having the data in database it may make no sense while for the person with experience who is working in the company it will make a great sense so the person can then adjust so AI is great uh well basically my takeaway here uh that I would like to leave is that uh AI is great but still uh human control is

important uh and it is really important to be able to impact and adjust that model that you're using model to adjust the tool that you're using to um answer the challenges the de the changes in demand and activities that your company is conducting so yeah I think that's really important uh I really really agree with you and uh there is yeah there is a common bias that it will be like a b rad um thing that will help um with everything basically with abs absolutely everything we will just press the button and everything will work totally automatically without any intervention without any additional insights from anybody just it will work by itself but we all understand that retail and supply chain environment is a very intense uh and very uh changing environment and uh uh there is a lot of uh intellectual

work uh that is connected not only with the the intelligence of the person but also with the intuition and uh uh I had a chat with um interesting and uh rather famous person uh who is an expert in category management and he shared his experience that it's great to have tools that help to um calculate some insight that are taken into consideration a lot of factors internal external and so on but still uh if talking about the category management if talking about the creation of the cont conceptt of the retail store if talking about um the understanding of the needs of the customers and creating the assortment mix that will cover these needs for the each particular retail chain for each particular retail cluster um format um and so on so it is an art rather than the science and that is why in all the areas where it is rather an art than the science we still need

people that is why like a conclusion um of course it is evident that retailers are no longer wondering whether to implement AI or not um in into their business processes the qu the question now is um choosing the right Solutions uh and right ways for implementing the AI in order to um be closer to their aims of the retail business as fast as possible so uh when used effectively they're paired with human experience AI can really significantly enhance the customer experiences and optimize retail operations so uh I completely agree on that point when the company comes to the decision to implement AI technology something new very often company faces some sort of struggle and it's uh completely rational it's completely understandable because uh all the owners uh the business um owners want to ensure that the investment they will have uh in

the software will pay off and will provide real value to the company at some point common problem uh for such and I would say one of the concerns is to ensure that when the company is starting to implement such a solution the company has all the necessary high quality mature as we like to call it at Leia mature data to feed to the system without uh proper data system might not provide the desired results this is one of the first concerns that we often hear from the customers uh and second one it's also about interconnecting the solutions uh the companies of course rely on different providers for different areas of their supply chain it's Earp Solutions it's accounting systems solutions for Space Management Solutions for and so on so uh it's also we see this it's a question of how we integrate new solution that uh that works let's say with AI that will cover

that particular area that we are currently struggling with how will we integrate it and connect it with other solutions that we have in place or with our Earp system well obviously uh the answer to the first question of uh having the right data it's a really complex question and here the right solution to that would be to have a reliable partner uh it is important for the reason that right partner robust partner with uh experience of implementing type of Technologies in multiple companies can guide the users can guide the company properly across the whole implementation process it's not just important to have a lot of data it's important to apply this data properly to apply this data in right quantities uh in right areas and uh know how to use this power of the data so here this is the area where basically robust strong experienced partner can can be uh really helpful and and also in adjusting the system to the business needs of the company to configuring it

properly uh and basically a second part it's about interconnection so again we're talking about Cloud platforms they are growing in in in demand right now across the world it's uh growing and growing and growing constantly companies have more interest in Cloud platforms and there is number of reasons for that obviously we probably this one podcast wouldn't cover all of these reasons if we would go into details but what is important is uh that such approach implementing Cloud platform allows the business to expect better return uh to receive even more value from such a solution simply because it allows to interconnect multiple Solutions with uh between each other so we're talking about seamless data exchange we have for example from side after the company successfully implemented inventory optimization and then we have an opportunity to or the company is willing to expand and also standardize manage more efficiently it's uh Space Management shelf space is uh the assortment uh management so to

Define which assortment to have at the store uh what is the right quantities to have what should be present at a particular location having a cloud provider which basically means that you'll be able to easily integrate the solution so implementing the solution once will allow you to easily add other Solutions which will exchange information about assortment about quantities on the Shelf about or orders that have to be sent to suppliers and uh every such integration will be way faster way simpler than the initial one so that is basically the main point and those are the really good answers to how to um manage these risks how to integrate platforms and what is the best solution for that well in our opinion currently in the world Cloud Solutions are the best answer for that retailers cannot change the factors that that are affecting their business I mean the external factors um that really

influence the efficiency and the business overall but uh they can increase their responsiveness to those changes uh as Forester States organizations uh demonstrating adaptability and resilience are ecosystem Centric uh by utilizing software and systems that uh seamlessly interact with Technologies paining the their entire technology stack uh and now uh we want to start the topic that is more connected with the unified platforms um basically these are uh some uh interconnected modules inside of the organizations starting from the CRM and can addend by the POS system Erp solution and Etc so all the existing uh systems inside of the organizations and uh as much as they are connected as many insights we get from this ecosystem and

um as efficient as effective basically we are so from our experience uh we have a nice example of how uh this ecosystems work so here in Leo we have the ecosystem of our Solutions uh and uh for example starting from the um assortment management the category manager adds a new product into the assortment mix uh afterwards totally automatically the Shelf space allocation task will be immediately sent to the planogram management module and the inventory optimization module will automatically place an order at the right time so it can work only if these three uh areas are automated in the same manner inside of the ecosystem so what do you think about uh the unified platforms and ecosystems their current state and the future yes I completely agree with that and to add more to what just hen mentioned there

are other maybe obvious maybe not so obvious reasons and advantages of uh having the cloud platform well first of all like to avoid any misunderstanding the solutions the specialized solutions they are not supposed to substitute the Erp in itself Erp is uh covering multiple areas of the business and obviously we are not striving and it would be a wrong direction to to substitute Erp as uh in a whole however we're talking about enhancing the operation of the Erp while plenty of Earp Solutions provide uh some basic functionality for replenishment for forecasting uh we're talking about improving that accuracy allowing the business to uh improve its uh indicators improve its uh cash flow in much rapid Manner and Achieve higher results in a shorter way without complex configuration upgrades from the solution and very hard and longterm onboarding process uh another

example and another advantage of cloud platforms is if we're taking a look at providers uh like traditionally the process of integrating Solutions is uh time consuming it's time consuming it's uh also serious investment for the companies very often such projects can um can be duration for more than two years and definitely this requires serious funding and uh commitment of the company such implementation on the contrary Cloud Solutions allow for much faster integration and uh which typically counts which typically happens within 6 to 12 months if we're speaking about some complex Solutions which require a lot of data based on AI and for some other Solutions again talking about experience of Leo uh and different portfolio solutions that we have within uh our company some simpler Solutions which rely on smaller quantities of data such projects can be

implemented within three months so this is obviously advantage in terms of time and the speed with which you can expect to have first returns and Improvement of your kpis without over investing of the the time of your team uh and uh the funding of the company on the complex implementation process so it's just six uh to 12 months sometimes it's 3 months comparing to the traditional Solutions which can be much longer in time uh and uh again repeating myself uh the cloud platforms uh this process that it happens so quickly allows you to save the time of your team instead of dedicating the whole teams from different departments on the development and implementation of the project for the long period of time you can very quickly integrate the solution implement it start using it and allocate your resources more wisely on other areas of the and other projects which are as well relevant and important to the

company yes so I'd like to add um some comments on some additional advantages for the unified ecosystem that might not be quite as evident um so the first being a similar interface of all the Solutions in the platform so by utilizing this unified platform um all of the modules usually share a consistent design and a consistent interface and so that makes it much easier for users to learn and navigate across all different aspects of the platform um which is quite different than the traditional approach where clients might or companies might um Implement systems from multiple different vendors all of those different siloed applications will have different interfaces um different processes and things like that so it's a lot more for end users in the company to learn and get comfortable and become experts in navigating and using those systems so by using a unified platform it really reduces the learning curve um for users

across all different departments and helps to enhance their adoption um of the different applications because they already understand how to navigate and it's just a much easier adoption process for them and then the other aspect is the scalability for businesses of all sizes and so many people might assume that these robust all-in-one platforms are only available for large corporations but that's just not the case um they specifically leao's platform um is scalable uh for retailers of all shapes and sizes and for example uh the unified platform approach makes it really easy for retailers to start with a single module to address immediate business needs and then gradually expand in their use of the system um over time to gain even more value because the more of the of our platform that a client implements the more interconnected they become the more value um they get out of the system and

by taking that modular approach it's easy to Stage any implementations uh based on the unique needs of an existing client and then because it's all included in the single unified platform that makes the integration process with existing systems be those Erp systems point of sale systems Etc makes the integration process um much easier than by implementing in multiple disparate systems um so there's one single integration if you start with a single module the integration gets built and then there's no need to duplicate that work so the additional modules can be added seam seamlessly as the business grows um to avoid um technological stagnation so it just makes the continued adoption and the scalability of the system much much easier U by leveraging a single unified platform well you know I just wanted to also note here this is resonated with what you said because I think that for

uh companies for retailers one of the problems and one of the key decisions key criterias that they consider when going for some solution or not is the implementation how problematic it can be how will they maintain it how will the upgrade work and also the cost associated with it so this is I think a really important U benefit of the platform that the scalability is really easy applied after the first integration is done and there is a clear evidence to that to the growth of cloud Solutions there is a company markets and markets it's a global advisory firm so they predict that by 2028 the market of such Cloud platforms will grow by over 100 billion dollars Global Market comparing to $ 47 billion in 2023 so we see clear demand for such type of solutions and obviously the main reason for that in my opinion is that companies want to abandon this uh long-term uh implementation process very tedious they have to also invest if they're going for

on premises in their own servers every upgrade every maintenance is sometimes it costs like like Cosmic money it's extremely expensive so that is the clear I I completely understand why there is this demand for such Solutions and another thing as we're talking about money and cost of upgrades uh I think also this is the logic that our retailers our customers Supply when they uh take the decision they calculate what are the benefits that you potentially can provide and what is the uh return how soon we can expect it uh so again very uh fastpaced world we live in today uh companies desire to get to get that return investment as quickly as possible so basically transferring to This Cloud Solutions allows you to boost your return investment because you also have to spend less on the implementation so that gives you additional U Advantage when you are accessing when you're achieving um when you're basically executing fulfilling such project and uh

typically like for our uh company for Leo uh on average after the implementation we anticipate backed by similar projects for the customers to imp implemented around 200 300% uh return on investment in the first years after the implementation of the solution but there are also extraordinary examples and it also depends about the collaboration about the willingness about the dedication of the customer uh to implement and to bring the results it's a common it's mutual work of course and one of such examples it's a very recent case company from Baltic it's a gas station called Baltic petroleum uh they had their challenges their challenges of their own but what is really important is that they achieved payback after the start of the project within one month and total Roy of this project after one year achieved over 1,500% I know it's like hard to believe but it's this is what happens when you implement right tools when you adjust

your business processes and for them primarily it was achieved through reduced expenses on operational uh work uh increased sales because they were able to predict which products to have at what locations at the right quantities so and also it's about turnover their cash flow improved so they stopped ordering much reducing over stocks and at the same time they were having right products at the right location where it is needed based on the uh sales Trends based on the demand so really um I also agree that cloud platforms probably after 2028 will grow even further we are transferring to cloud and uh uh there is as I said there is a clear understanding and uh there is a clear pross of such approach yeah one and a half ,% in Roi sounds really impressive uh so it must be really interesting for potential investors um so wrapping up um

we totally understand the proof um why we do need to implement uh the different different solutions not only AI Solutions but unified platforms and all other types of new technologies that are not already in place uh in U retail business but at the same time uh from our experience of more than 200 implementations retailers uh sometimes face um unmet expectations from the implementation of different types of IT solutions uh and a vivid example is the trend of adopting artificial intelligence Solutions in retail for sure we all understand that it is a really breakthrough uh and Powerful technologies that can really help business to grow faster and to gain great results but at the same time um some believe that it will become like a Panay as I have mentioned like a bottom um some silver bullet uh that

will help with everything and um will make the most accurate forecast without any efforts we'll make great planograms without any efforts and so on of course um we do need some efforts from the retail side as well not only the solution side or AI side um so not to be disappointed not to be frustrated by the implementation of any solution uh and artificial intelligence in particular um Anna um what from your point of view can help to avoid frustration uh and uh needless waste of time and money and uh we are stressing here money uh as Victor mentioned so it is all about money uh on cutting age software implementation what can really help to always about money really uh what can really help U experts managers who are on the stage of the

implementation not to make mistakes and make the process fast and smooth uh yeah so first of all of course we should understand that implementing AI technology is always an investment and it should that's why it should be a very like weight decision uh like if to go into the story or not to go so there are some important uh uh stages and points that should be considered while like analyzing uh using this technology so first of all it's very important to uh clearly understand Define and uh uh Define the needs and goals of your specific business because even like that we have like different verticals or different like even uh type of stores in the grocery retail business still every business is different every country specific is different so it is important to clearly understand analyze uh your business reality your business goals what we need to what you try to achieve

what you need to achieve and then to make a decision or like what tool to use for that and where to implement the AI part uh the second one is it is very important before going into the AI project to understand the expectations and like some realistic put some realistic success criteria for this kind of this project uh because like uh tracking the project uh making some regular check on the like implementation process it's very important uh to achieve the goal and to understand like what need to be like readjusted on each and every stage uh clearly we understand uh that uh AI is just like a part that can bring a great efficiency to the business so uh before we go to the AI story we need to make sure that the processes the business processes on the retailer s in our case it works they work like really well and only after that when business processes are set up we can apply the AI story on that and in

order to get the Great effect from using these kind of solutions uh and of course it is important uh to kind of like diversify the risks and uh not to like scale uh for the whole like retail chain for the whole business uh at like uh one button for example but to uh try to implement that for like One Direction one Department to make some kind of a pilot to make some kind of a testing uh understand how AI works like in this particular part uh what readjustments need to be made and only after that to go into the scaling so I think that uh keeping in track of all these like stages is very important while like analyzing and making decisions about the AI projects another point that is very important during implementation and achieving success in a project would be to ensure the collaboration we have many different stakeholders during any project and we know for sure that it is critical to establish a good report

between I department and all of the business units so this is important why because it has to have a clear common understanding of the expectations of the potential obstacles and also of the project goals during all the stages of implementation and here uh another point that is very very advisable to consider is to choose the software vendors carefully so we talk here about reputation uh proven success cases and evalue this potential partner uh method ology and how it matches our own business processes so it is very important that a choose a reputable vendor to have this success of implementation and also to gain some insights on how to do things better because here we are not talking about just the technology but a process and a business transformation finally I would like to add that having this dedicated and involved leadership is key because we need something uh not only the persons but also this drive to push the

project forward to bring all of the information necessary to test the solution and make sure that this pilot approach that Anna mentioned and all of these uh results are tangible so here it is essential for managers for sure not only to monitor these kpis of the project but also to uh ensure this continuous collection of feedback not only feedback from it but also from the different business units and also to know that the project is on track and in case there are any necessary adjustments they can be done at the right time with all of the right people so I think with this we can make sure that uh with this approach uh we are able to uh attain the result and also to remove any obstacle ahead thanks uh thanks thilia thanks Anna um so today uh we have explored the transformative power of the AI in retail and the strategies needed to ensure its success of course it was uh short

conversation but it was really practical it was based on our experience with our customers potential and real one and uh I wanted to thank to our expert panelists for their valuable insights uh to our listeners we really hope that it was um interesting for you insightful and if so please Explore More on the leao AI blog and you if you are uh ready to transform your retail operations uh we are here please request a demo uh we will be really happy to help with uh the AI transformation or the retail operations transformation in general so until the next time looking forward thanks thank you bye thank you bye-bye thanks thank you [Music]