Technologies to watch in 2025: transforming customer experience for retailers

As we progress through 2025, the evolution of technology stands as a critical factor reshaping how brands connect with their customers. A confluence of consumer demands and technological advancements is fostering a new era in retail, where the focus is squarely on enhancing customer experiences. Within this landscape, three key trends have emerged: SoftPOS, immersive experiences, and digital identity. Each of these innovations presents a unique opportunity to redefine consumer engagement and streamline operations across the retail sector.

SoftPOS: redefining transactions on the go.

SoftPOS (Software Point of Sale) is revolutionising traditional payment processing methods. Initially perceived as a cost-effective solution for smaller merchants, SoftPOS is quickly establishing itself as an essential tool for retailers of all sizes. Fortune Business Insights predicts that the global SoftPOS market will reach USD 1,416.1 million by 2032, highlighting the growing demand for efficient and contactless payment solutions.

This innovative technology empowers retailers to convert everyday smartphones and tablets into payment devices. This flexibility offered by SoftPOS opens up opportunities for boosting the customer experience. Picture a shopping environment where sales associates can assist customers and finalise purchases on the spot, eliminating the need to direct them to distant checkout counters. With SoftPOS, friction in the purchasing process is minimised, resulting in a smooth shopping experience that fosters customer loyalty and boosts conversion rates.

Moreover, the security features of SoftPOS have advanced rapidly. With integrated encryption and tokenisation, SoftPOS solutions like Worldline’s Tap on Mobile, protect cardholder information, fostering a sense of trust between customers and retailers. This is increasingly important as consumers grow more concerned about security in payment transactions.

Immersive experiences: bridging the digital and physical realms.

As generations evolve and consumer expectations shift, retailers must adapt by integrating immersive experiences into their offerings. The allure of augmented reality (AR) and virtual reality (VR) is no longer a futuristic concept—it's a present reality that can significantly enhance customer engagement. By 2030, data from Bank of America, as cited in a report by market research firm GfK, suggests that Gen Z will wield a collective spending power of over $33 trillion. This demographic represents a critical market, and one that will increasingly seek out brands offering tailored, immersive shopping experiences.

Immersive technologies are rapidly gaining popularity. The global augmented reality market is expected to grow from USD 57.2 billion in 2024 to USD 577.19 billion by 2032, reflecting a compound annual growth rate (CAGR) of 33.5% during this period, according to SkyQuest. Additionally, the VR headset market is projected to reach 27.70 million units by 2029, as reported by Statista. These advancements indicate that the potential to engage consumers through immersive digital experiences is rapidly becoming mainstream.

Retailers are already exploring myriad applications, allowing consumers to visualise how products will fit into their lives before making a decision. From virtual fitting rooms in fashion to AR-guided store navigation, the possibilities are expansive. A study created by Vogue Business suggests that 72% of UK luxury fashion consumers demand augmented reality in their shopping journeys—an imperative for brands aiming to remain relevant and competitive.

Consumers will expect to switch seamlessly between in-store experiences, online shopping, and immersive AR/VR interactions. Embracing this evolution is crucial for cultivating deeper emotional connections between brands and consumers. And the payment experience also has to be tailored for this new channel: consumers need to be able to complete their payment easily and conveniently from within the VR/AR experience, with minimal friction.

Digital identity: streamlining convenience and control.

The adoption of digital identity represents a significant step forward in improving the convenience of consumer transactions. We are on the brink of a digital identity revolution, with projections indicating that the number of global users of digital identity documents will exceed 6.5 billion by 2026, up from 4.2 billion in 2022, according to a study by Juniper Research. This 50% growth marks a major shift towards more secure and efficient identity verification processes.

The implications for retailers are significant. Estimates from the UK Government suggest that checking ages costs retailers approximately £4 billion in the UK alone. Digital identity systems can help streamline these processes, reducing costs and enhancing customer service. In fact, 60% of customer service issues at self-checkouts are related to age verification. By integrating digital identity solutions, retailers can facilitate smoother transactions and improve the overall shopping experience.

For consumers, the benefits are clear: convenience in not having to carry multiple physical documents, privacy in sharing only essential information, and enhanced security that minimizes fraud risks. As the EU rolls out its Digital Identity Wallet, it sets forth a timeline that will see its full adoption for public services by 2026. According to Thales's EU Digital ID Wallet Survey, 66% of Europeans are willing to engage with this system. This indicates that digital identity has the potential to transform the future of personal data management.

Embracing these innovations means recognizing the merging of identity and payment. The potential for seamless transactions is within reach, where consumers can authenticate and pay in one effortless motion, enhancing both safety and convenience.

Looking ahead.

As we navigate through 2025, the interconnectedness of these technological trends paints a compelling picture for the future of retail. Embracing SoftPOS, investing in immersive experiences, and implementing robust digital identity solutions are not just strategic moves—they are essential steps towards building more resilient and consumer-centric businesses.

We stand on the verge of a transformative period, one marked by an increasing emphasis on customer experience and engagement. Retailers prepared to adapt will surely emerge as leaders, ready to meet the evolving expectations of their consumers.

Sources:
https://www.fortunebusinessinsights.com/softpos-market-107798
https://www.gfk.com/hubfs/Global Gen Z and Millennails_New Preview Report-1.pdf
https://www.skyquestt.com/report/augmented-reality-market - :~:text=Augmented%20Reality%20Market%20size%20was,period%20(2025%2D2032).
https://www.statista.com/outlook/cmo/consumer-electronics/gaming-equipment/vr-headsets/worldwide
https://www.voguebusiness.com/technology/what-luxury-fashion-consumers-want-from-augmented-reality-snap - :~:text=Styling%20and%20wardrobe%20consultations%20came,appetite%20for%20AR%2Denhanced%20experiences.
https://www.juniperresearch.com/press/users-of-digital-identity-documents-to-exceed/
https://blog.hidglobal.com/compliance-and-customer-experience-age-verification
https://www.thalesgroup.com/sites/default/files/prezly/documents/Thales EIDW survey - TakeAway.pdf