Why are Retailers Rushing to Modernise Tech & E-commerce?

During research and running focused meetings for retailers and providers over the last 12 months it is clear that the UK retail landscape is undergoing one of its most challenging periods in a decade. Retailers must modernise their technology, adapt to rapidly shifting consumer expectations, embrace AI and social commerce, and manage ongoing macroeconomic pressures all at the same time. This article explores the biggest trends shaping UK retail in 2025, what industry research reveals, and how leading retailers are responding.

Technology Modernisation: Replatforming, Data Architecture & E-commerce Efficiency

One of the strongest themes across UK retail in 2025 is the urgent need for digital transformation. Retailers are replatforming e-commerce systems, consolidating vendor stacks, and rebuilding websites across markets to improve speed, scalability and omnichannel performance.

But modernising technology is difficult and costly. Coordinating new platforms across countries, languages, systems and data flows must be done while protecting trading performance - conversion rates, site speed and customer experience cannot be sacrificed.

Industry reports reinforce this trend.

• The Retail Economics / Metapack Ecommerce Delivery Benchmark 2025 shows that online growth is slowing to around 5.6%, meaning digital transformation is increasingly focused on efficiency and resilience, not just growth.
• Deloitte’s Retail Trends 2025 report notes that the next wave of investment should strengthen core systems and operational agility rather than simply adding more digital channels.

What retailers need to prioritise

• Modernise e-commerce platforms without disrupting trading
• Invest in back-end systems and data architecture - not just shiny front-end channels
• Consolidate vendors to reduce complexity and improve speed
• Ensure omnichannel systems can scale as customer expectations rise

AI, Data & Analytics: From Pilots to Scalable Retail Impact

Nearly every retailer now acknowledges that AI in retail is transformative - but the challenge lies in operationalising it. Pilots in personalisation, content automation, demand forecasting or media optimisation are easy. Embedding AI into business-as-usual workflows is much harder.

External sources reinforce this challenge:

• The Retail Insight Network reports that AI-driven personalisation is now an expected norm for consumers.
• The SOTI Retail Report 2025 highlights the growing connection between AI, mobile experiences, and social commerce.

However, many retailers struggle due to data silos, fragmented systems and legacy infrastructure.

What retailers must address

• Build strong data foundations to achieve a unified customer view
• Shift from experiments to real operational change (workflow, governance, talent)
• Focus on ROI - not “cool” AI capabilities
• Break down data silos to make AI scalable and measurable

Retail success in 2025 requires that AI, analytics and personalisation drive clear outcomes: conversion, retention, loyalty and lifetime value.

Social Commerce & New Digital Channels: Where Growth is Moving

Younger, digitally native shoppers are fundamentally reshaping how brands communicate and convert. Retailers investing in platforms like TikTok, Instagram Reels and live shopping are seeing new paths to growth - and new measurement challenges. Industry research backs this shift:

• Retail Economics and TikTok project the UK social commerce market to grow from £7.4 billion to £16 billion by 2028.
• AInvest highlights how Gen Z’s TikTok-driven “shoppertainment” model is rewriting margins for traditional retailers.

What this means for digital retail strategy

• Social commerce is becoming a sales channel, not just an awareness channel
• Live shopping, influencers, and short-form video require new content and analytics capabilities
• Measurement frameworks must evolve to track rapid, cross-platform customer journeys
• Retailers must design content native to each platform, especially for Gen Z audiences

Macroeconomic Pressures: Inflation, Margin Squeeze & Inventory Risk

Retailers are still managing persistent macroeconomic pressures: inflation, cost-of-living challenges, rising operational costs, and fluctuating consumer confidence. Seasonal brands - such as outerwear and footwear - face even sharper volatility.

Recent research underscores this difficult climate:

• Coface identifies rising costs and shifts in spending as major headwinds for UK retail in 2025.
• eMarketer forecasts UK ecommerce growth slowing to 3.6%, emphasising the need for operational efficiency.

How retailers can protect margin and mitigate risk

• Balance short-term trading actions (promotions, inventory turns) with long-term digital investment
• Manage inventory and supply chain risks more aggressively
• Prioritise loyalty and retention when acquisition becomes expensive
• Tighten operating models and improve forecasting accuracy

Customer Understanding: The Foundation of Retail Growth in 2025

In a noisy, competitive, multi-channel environment, the brands winning in 2025 are those that deeply understand their customers. But retailers still struggle with fragmented systems, the decline of third-party data, and siloed vendor ecosystems.

Industry insights reinforce the urgency:

• Deloitte lists customer experience powered by data & technology as one of six defining UK retail trends.
• Retail Economics/Metapack found that while 96% of retailers use AI, only a small group of “Tech Trailblazers” achieve 3× higher growth from it.

Where retailers must focus now

• Build a unified customer view across online, store, social and mobile
• Develop smarter loyalty and retention programmes
• Improve data transparency and consent management
• Adopt measurement frameworks that reflect omnichannel journeys - not last-click

Conclusion: Retailers Must Evolve Faster to Stay Competitive

The next 12 months are pivotal for UK retail. Technology modernisation, AI adoption, customer experience, social commerce and macroeconomic discipline are reshaping the market. Retailers must balance short-term performance pressures with long-term digital transformation - or risk falling behind more agile, digitally native competitors. Those who modernise their tech, operationalise AI, adapt to social commerce and deeply understand their customers will be the winners in the next era of UK retail.