As we step into 2025, the retail sector finds itself at a pivotal moment. If 2024 was about surviving, then 2025 is shaping up to be "The Year of Realignment" – a time for strategic shifts and prioritisation amid an evolving landscape (god knows what Elon & King Trump might do next!). The green shoots of opportunity are emerging, but nurturing them requires a careful balance of focus, adaptability, and a willingness to realign priorities. For retailers and business, this is a year not just to do more but to do less but better.
THE POWER OF FOCUS: LESS IS MORE
One of the most powerful strategies for nurturing growth is deceptively simple: do less. But as straightforward as it sounds, this can be incredibly challenging.
Research by Professor Leidy Klotz from the University of Virginia reveals a phenomenon called addition bias – the human tendency to add more tasks, initiatives, and complexity, rather than taking things away. In his book, Subtract, Klotz explains that we are hardwired to believe that more is better. But in reality, successful teams are those that master the art of saying no and focusing on a few big priorities that truly move the needle.
In retail, this means resisting the urge to pile on new campaigns, products, or initiatives just to show activity. Or piling on new administrative tasks to the frontline team to “measure and manage performance”. Instead, prioritisation becomes the secret weapon. It’s about identifying what truly matters to customers and focusing resources on those areas to maximise impact. This requires a cultural shift – from a mindset of scarcity (“we must do it all”) to one of abundance (“we will do the most important things exceptionally well”).
SHORT-TERM WINS VS. LONG-TERM VISION
The challenge for many retailers is balancing short-term performance pressures with the need to invest in long-term growth. Scarcity thinking – a mindset focused on what is lacking – can lead to a short-term focus on survival. This is particularly evident in times of economic uncertainty when the temptation is to cut costs, reduce innovation, and prioritise immediate sales.
However, retailers who adopt an abundance mindset – focusing on the value they can uniquely deliver – are better positioned to innovate and grow. They view challenges as opportunities and are more likely to invest in strategic areas like customer experience, brand building, and technology. This mindset encourages collaboration over competition, opening doors for strategic partnerships and shared value creation.
I recently visited the Petco store in NYC. This flagship blends digital and physical experiences to engage customers in immersive storytelling. Through partnerships, collaborations, private label, lifting new ideas and brands up onto a pedestal and delivering an experience any pet owner simply wants to “hang out in with their fur-baby.” is a powerful equation. Their mindset of collaboration has been incredibly powerful and by investing in long-term brand equity and customer experience rather than just short-term sales, Petco demonstrates the power of aligning short-term actions with a long-term vision.
HOW TO REBUILD AND REALIGN: STRATEGIC SHIFTS FOR RETAILERS
In this year of realignment, the path to nurturing green shoots involves three key strategic shifts:
1. Purpose-Driven Prioritisation
Retailers need to realign their brand purpose with evolving customer values. This requires a deep understanding of what customers care about and strategically aligning product offerings, messaging, and experiences to resonate with those values. In 2025, this means moving beyond transactional relationships to emotional connections.
Internationally, Lululemon excels at this by creating immersive, multi-sensory experiences that align with its wellbeing-centric brand ethos. Its stores are not just places to shop but community hubs where customers engage with the brand’s lifestyle through workout classes and curated music playlists.
Closer to home, Adore Beauty, originally an online beauty retailer, has embarked on a significant expansion by establishing physical stores across Australia - recently opening its first brick-and-mortar store, with plans to launch over 25 additional stores nationwide by 2026. This strategic move aims to enhance brand advocacy and customer acquisition by integrating online and physical retail experiences. By aligning its growth strategy with customer preferences for in-store experiences, Adore Beauty demonstrates a commitment to meeting consumer needs through purposeful expansion.
The lesson? It’s not about doing everything but doing the right things that resonate deeply with your target audience.
2. Customer-Centric Realignment
To thrive in 2025, retailers must shift from product-centric to customer-centric strategies. This means leveraging data to understand customer behaviours, preferences, and pain points at a granular level. But it’s not just about collecting data – it’s about using it intelligently to inform decision-making.
Consider how Amazon leverages its vast customer data not only to recommend products but also to anticipate needs and optimise the end-to-end customer journey. By realigning its operations and marketing strategies around customer insights, Amazon continues to set the benchmark for personalisation and convenience.
Zara has always been known for its rapid inventory turnaround, but in 2025, it’s taking customer-centricity to the next level by integrating RFID technology and data analytics to optimise in-store experiences.
With RFID tags on every item, Zara can track inventory in real-time, ensuring that popular items are always in stock. This data-driven approach allows for rapid replenishment and minimises out-of-stocks, enhancing the customer experience.
Zara also leverages customer feedback and buying patterns to refine its product offerings, creating a dynamic, hyper-localised assortment that resonates with the preferences of each store’s demographic.
Retailers need to prioritise investments in technology and analytics that provide a 360-degree view of the customer, enabling them to create personalised experiences that drive loyalty and growth.
3. Adaptation and Experimentation
In an unpredictable retail landscape, adaptability is the new competitive advantage. Retailers must adopt an experimental mindset – testing, learning, and iterating to respond to changing customer needs and market dynamics.
This is where right-sizing comes into play. It’s about adjusting inventory, store formats, and digital capabilities to optimise profitability and customer satisfaction. Retailers like Glossier have mastered this by using pop-up stores to test new markets and customer experiences before making large investments.
In our backyard, JB Hi-Fi, has demonstrated agility by acquiring a controlling stake in e&s Trading, a Victorian-based retailer specialising in high-end appliances. This $47.8 million investment, announced in 2024, signals JB Hi-Fi's strategic entry into the commercial building market, diversifying its portfolio and revenue streams. By combining JB Hi-Fi’s deep understanding of the homemaker sector and extensive experience in the appliance industry make it an ideal partner for the e&s Trading business.
Despite economic challenges and rising living costs, JB Hi-Fi remains confident in its growth prospects, leveraging this acquisition to tap into new markets and enhance its product offerings.
To achieve this level of agility, retailers, boards and executive teams must empower teams to make data-driven decisions quickly and encourage a culture of continuous learning and innovation. This involves breaking down silos, encouraging cross-functional collaboration, and adopting flexible operational models that can scale up or down as needed.
NURTURING GREEN SHOOTS: THE PATH FORWARD
2025 presents a unique opportunity for retailers to nurture green shoots of growth by realigning priorities and focusing on what truly matters. This is not about chasing every trend or expanding at all costs but about thoughtful alignment – aligning brand purpose, customer needs, and operational capabilities.
The key takeaway? Focus on fewer, bigger bets. Prioritise the initiatives that create the most value for customers and align with your brand’s purpose. Be willing to say no to distractions and resist the urge to add more for the sake of activity.
The retailers who thrive in this year of realignment will be those who are adaptive, strategic, and purpose-driven – those who embrace change not as a threat but as an opportunity to reimagine the future of retail.
FINAL THOUGHT
In 2025, green shoots are there for the taking, but nurturing them requires a deliberate focus on realignment, resilience, and renewal. It’s about doing less but achieving more, strategically aligning short-term actions with long-term goals, and adopting an abundance mindset that sees challenges as opportunities.
The question for those in the retail-sphere, is not just how to grow, but how to grow smarter. The answers lie in realignment, strategic prioritisation, and the courage to subtract in order to add greater value.
This is the year to rethink, realign, and revive. Are you ready?
If you’re looking to refocus, prioritise smarter, and nurture the green shoots of growth, RX Group can help you strategically realign for success. Let’s chat about how we can make this year your best yet.
Contact Juanita at juanita@rxgroup.co.nz or call 027 476 8073.
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