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In 2025, retail is changing in response to evolving consumer habits and new technologies. The way we shop is becoming less about just the transaction and more about the entire experience – from browsing on a website or social media to going into a physical store. Retailers are adjusting to meet customers where they are and find that sweet spot between convenience, technology and personal touch.
Below, we highlight the biggest trends shaping Australian retail, based on insights from 500 local retail owners and 1,000 consumers. What we’re seeing is that Aussie retailers are getting smarter about using tech, tapping into new revenue streams and fine-tuning how they engage with shoppers.
These findings form part of the larger 2025 Future of Commerce report. Square teamed up with Bredin to survey 6,000 business leaders and 4,000 consumers across the retail, restaurant and beauty industries in Australia, the US, Canada and the UK. All the data shared below comes from these survey results. For a deeper dive into the latest retail industry trends, download the full 2025 Square Future of Retail report to help steer your strategy for the year ahead.
Retailers are using more technology than you think – and it’s paying off
Retailers are leaning into technology more than ever, and it’s making a real difference. A huge 95% of Australian retailers surveyed are using some form of automation to streamline operations, with inventory management (74%) and marketing (72%) seeing the biggest benefits. Think automated stock updates, AI-powered product recommendations and smarter marketing campaigns – all helping businesses work faster and make shopping smoother for customers.
They’re not stopping there, either. Eighty-two percent of retailers said they’re keen to invest in even more technology, from better customer communication to real-time inventory tracking. However, not every piece of tech is hitting the mark. Take chatbots, for example – while they’re popping up everywhere, only 33% of Australian consumers we asked said they liked using them. That said, retailers are finding some value in them: 39% are using chatbots to free up staff, and 66% of that group say it’s paying off financially.
At the end of the day, tech is here to help – not replace – the human touch. The best retailers are finding ways to use automation to handle the repetitive stuff while making sure their team is available for the moments that really matter.
For instance, automating things like inventory management keeps stock levels updated in real time, so customers can check availability without asking, and staff aren’t stuck manually tracking what’s running low. Square’s inventory management tools make this easier by streamlining stock tracking across online and in-store locations, with real-time alerts letting you know when it’s time to restock.
Retail leaders think new and alternative paths to revenue are important, but they need to start acting on it
Retailers think that relying solely on traditional sales isn’t enough anymore. Of those we polled, 74% said that new revenue streams like subscriptions, services or in-store events are important to their growth plans. But fewer than one-third actually tested these ideas in the last year, whether by introducing memberships or club offerings (35%), holding events (32%), or adding supplemental products and services (18%).
Trying something new doesn’t have to be a big leap. Simple, strategic steps, like offering exclusive perks for members or introducing a service based on customer feedback, can strengthen customer loyalty and open new revenue opportunities. Trialling a subscription model can help build a steady base of repeat customers, while in-store events and services give shoppers more reasons to visit.
When you’re ready to branch out, using Square tools can help you manage your revenue streams – from in-store and online sales to subscriptions and events – all in one place. Start small, see what resonates with your customers, and build from there.
Retailers have to get creative to get hesitant consumers spending in 2025
With inflation still putting pressure on wallets, 67% of Aussie consumers have cut back on spending over the past year – a bigger drop than those in other countries surveyed. At the same time, 69% of retail leaders told us they plan to increase their prices over the next 12 months, and 25% expect those increases to be significant.
Retailers are feeling the pinch as they try to balance rising costs and hesitant shoppers, meaning they need to work harder to get people through the door or clicking ‘Buy’. One approach that’s proving effective is a flexible payment option like buy now, pay later (BNPL). Seventy percent of surveyed retailers offering BNPL have seen an uptick in its use, showing that customers are more likely to spend when they can spread out payments. If you’re thinking about trying BNPL options, see how Square and Afterpay can help bring in more business.
On top of that, 71% of retailers are stepping up their marketing spend to stay front-of-mind with customers. And when it comes to reaching them, email remains the favourite method: 63% of consumers prefer it over other channels like SMS (45%), Facebook (20%) and Instagram (15%). Retailers who personalise marketing emails with targeted offers, exclusive discounts and timely promotions can boost sales even when budgets are tight. It’s all about finding ways to stay connected and offer value without simply hiking prices.
Balancing brick-and-mortar quality and online convenience will be key
Online shopping may be booming, but brick-and-mortar stores aren’t going anywhere – shoppers still love being able to see, touch and try products before buying. In fact, 80% of consumers rated their in-store experiences as positive. Over one-third of retail leaders are leaning into this by hosting in-store events and experiences to stay competitive. It’s not just about selling products but creating real-life moments that bring people back.
Meanwhile, eCommerce offers the ease and convenience that today’s shoppers expect. The challenge for retailers? Bridging the gap between physical stores and digital shopping. Whether browsing online and picking up in-store, making hassle-free returns or getting an out-of-stock item shipped straight to their door, customers want a smooth, flexible shopping experience that feels effortless and fits their lifestyle.
The key is keeping everything in sync – connecting sales, inventory and customer interactions across all touchpoints. This omnichannel strategy helps retailers deliver a consistent brand experience. Consider using a point-of-sale tool like Square for Retail to help manage both in-store and online sales and ensure everything’s in sync, no matter where your customers shop. Retailers who nail this balance – offering a strong in-store experience with a seamless online presence – will have the edge this year.
Personalisation and alerts efforts aren’t annoying – in fact, they’re vital
Shoppers don’t just tolerate personalised offers and alerts – they actually want them. Sixty-three percent of consumers told us they don’t mind sharing their data if it means getting a better and more tailored experience.
Loyalty programs, in particular, are a huge draw to deliver that personal touch, with 77% of consumers preferring to use them. And the results speak for themselves: 87% of retail leaders who have a loyalty or rewards program in place said it’s driving repeat visits.
According to our 2025 survey data, shoppers ranked personalisation (68%) as among the top reasons they engage with loyalty programs, behind exclusive discounts (83%) and earning rewards (81%). Alerts and notifications and exclusive events also made the list of valuable perks.
If you’re part of the 39% who are thinking about starting a loyalty program this year, Square Loyalty makes it easy for retailers to offer rewards that integrate seamlessly with email marketing software. By sending personalised discounts, reminders about products they’ve browsed and exclusive deals, retailers can build stronger customer relationships and keep them feeling valued.
Retailers need to rethink hiring for the long term
Over half of the retailers we surveyed agreed that hiring in retail is becoming easier. However, while competitive wages and flexible hours can help attract talent, keeping employees for the long haul is still being overlooked. Right now, only 28% of retailers have clear career paths in place for staff, potentially leaving many workers feeling stuck with no room to grow.
To tackle this, retailers need to focus on career development and staff engagement. Providing training opportunities, promoting from within and involving employees in decision-making can make a huge difference in retention. One-third of retail leaders also said they offer flexible schedules to help. When staff feel heard and valued, they’re more likely to stay.
A good place to start is by ensuring you have the employer basics covered – like tracking hours and managing schedules. If these core tasks are eating up too much of your time, tools like Square Shifts can help simplify them, giving you back more hours to focus on your team. Plus, the Square Team app empowers staff to manage their own rosters, making scheduling easier for everyone.
Retail leaders are actively investing in the future
After years of uncertainty, retailers are finally feeling hopeful again. A solid 80% of Australian retail leaders say they’re more optimistic about their businesses than they were a year ago. The focus is shifting from simply surviving to actively planning for growth.
Over the next 12 months, retailers are looking to expand in three key areas: increasing their product and service offerings, investing more in online stores and building stronger loyalty programs. This shift is driven by a combination of improving technology and evolving consumer preferences. More than ever, retailers are embracing digital tools to streamline operations, personalise customer interactions and create more engaging shopping experiences.
While challenges will always exist, the overall outlook is positive. Retailers are seizing this moment to invest in their businesses and build for the future. Whether through expanding offerings, improving in-store experiences or strengthening customer loyalty, now’s the chance for leaders to plan for future growth, even if it means making just one or two key changes.
Want more insights on how other retail store owners like yours are innovating in 2025? Go deeper into the biggest trends in the 2025 Square Future of Retail report.
