Here’s our experts’ perspective on process optimization in retail and more.

What emerging technologies and business approaches do you believe will have the greatest impact on retail process optimization in the next few years?

Anders Hedfalk: When we talk about emerging technologies, we often visualize cutting-edge or futuristic advancements that spark our imagination: virtual reality, drones, blockchains, and quantum processing. However, for most retailers working on process optimization, it is often wiser to focus on the real, business-viable technology frontier – ensuring a return on investment and encouraging user adoption of new technologies. Key emerging technologies that are maturing here and now – and still have many years of practical implementation ahead – include cloud computing, generative AI (Gen-AI), and automation.

Cloud solutions, which currently host less than 15% of enterprise applications, enable retailers to access shared data across their operations and processes. This drives visibility and traceability while supporting the rapid roll-out of SaaS solutions. By unifying data sources, cloud computing empowers businesses to make informed decisions and streamline operations.

Analytics and AI, including Gen-AI, have the potential to enhance decision-making and efficiency across core retail processes. These include merchandising, logistics, marketing, store operations, e-commerce, and digital services. While Gen-AI is nearing the end of its first hype cycle – marked by some disappointments in the corporate sphere – promising use cases are emerging. These include applications in marketing, customer service, software development, and master data management, showcasing its transformative potential.

In logistics and warehouse management, automation is seeing strong advancements. Retailers are increasingly investing in versatile and flexible automation technologies. Notably, automation in retail logistics is expanding beyond dry goods to include deep-frozen items, fruits and vegetables, and fresh foods, opening new avenues for efficiency.

The forward-thinking retailer must stay informed about more futuristic technologies but should prioritize investments in areas where there is a clear return on investment and readiness among users. By balancing innovation with practicality, retailers can optimize their operations and stay competitive in a rapidly evolving landscape.

Emil Waszkowski: The biggest impact on process optimization comes from technological solutions that not only streamline operations but also drive sales. The retail space is an ideal environment for implementing such systems.

When it comes to specific solutions, I see great potential in planogram verifiers. These tools leverage image recognition technology to ensure that product displays align with predefined plans, improving product availability and potentially boosting sales by several percentage points.

Another promising innovation is electronic shelf labels (ESLs), which enable dynamic, real-time price adjustments. This increases operational efficiency and has the potential to raise profit margins by an additional percentage point.

I’m also closely following Lidl’s initiatives, particularly its efforts to revive Scan and Go technology, which it plans to test in selected stores. This could mark a significant step toward enhancing the shopping experience and operational agility.

If the new approach works and meets consumers' expectations, we may see more of these solutions at major retail stores, which will significantly reduce labor costs.

Peter Björklund: Over the past few years, the retail industry has experienced significant supply chain disruptions, which have led to persistent forecasting challenges in procurement and order delivery. By now, we should have learned valuable lessons from these disruptions and begun to apply them moving forward. While there is a broad range of technologies that can enhance supply chain predictability, it’s wise to analyze the entire value chain (planning, buying, selling, and moving) before jumping on the latest technology hype.

For instance, improving your Sales & Operational Planning (S&OP) processes can drive significant downstream benefits for both Procurement and Sales Order Management. This, in turn, reduces waste, such as manual rework, and mitigates inventory redundancy or shortages, ultimately enhancing the customer experience. For some businesses, a simple integration with supplier inventories for real-time updates may suffice. For others, opportunities may be found in leveraging more advanced technologies.

However, data quality remains a major concern. No process can outperform the data it relies on, and no data can surpass the process that creates it. Therefore, investing in process and data management is a crucial step toward realizing any technology’s return on investment.

What are the key challenges retailers will face in 2025?

Tomasz Woźniak: We are definitely witnessing certain competitive boundaries begin to blur. I am increasingly convinced that virtually all retailers are now competing with each other in at least a few spaces. For instance, Zalando and Modivo have started selling cosmetics, entering territory previously dominated by players like Notino or Hebe in the Polish market.

The boundary between quick commerce and e-grocery has long since faded. Discounters, convenience chains, startups, and established leaders now all compete for the same customer with similar value propositions. This convergence highlights the growing challenge of differentiation in these overlapping markets.

New marketplace launches provide another compelling example of this trend. In Poland, many marketplaces have significantly expanded their assortments, encroaching on the space that Allegro has dominated for decades. The prioritization of such investments is certainly debatable, but it seems that operators with the most loyal customers are quietly realizing profits from this sales model, having invested in it for years.

In physical retail, the trend of intense localization has been evident for quite some time. Retail parks are appearing in increasingly smaller cities, reshaping customer behavior. Many consumers who once traveled to larger cities for shopping or entertainment are now finding those experiences closer to home.

Today, even the pretext of a trip to the cinema is losing its allure, with the instant availability of streaming services making such outings less relevant. This shift will likely deepen, especially as more retailers offer click & collect services. These services provide access to a much larger assortment than what is available in physical stores, further strengthening omnichannel strategies.

Looking ahead, I see the coming year as one marked by an intensifying battle for every second of customer attention. Mere promotions showing minor differences in “typical” shopping carts are no longer enough to win customers. Rewarding loyalty must evolve to mean truly personal treatment – both for the individual customer and for entire households. This level of personalization will be essential to stand out in an increasingly competitive landscape.

Peter Björklund: In 2025 and the coming years, retailers will face increasing pressure to improve sustainability reporting, particularly with the introduction of the Corporate Sustainability Reporting Directive (CSRD). The CSRD will require companies to identify and mitigate potential risks related to environmental and social issues. Without a unified and well-defined understanding of internal processes, this could become an expensive and resource-intensive exercise.

However, with a strong framework and baseline for analyzing processes and process data through a sustainability lens, CSRD-related assessments can actually create a competitive advantage. A clear example is the ability to mitigate reputational risks effectively.

The key is to prioritize sustainability within operations instead of focusing solely on reporting. For instance, the double materiality assessment offers an excellent opportunity to embed sustainability into overall risk management processes. This approach not only highlights sustainability risks but also identifies opportunities, both in the short and long term.

Which technology solutions, in your experience, provide the fastest return on investment for retailers seeking to optimize their processes?

Emil Waszkowski: When considering solutions for optimizing store processes, it’s important to account for the time required to implement technology across physical outlets, which can mean dozens, hundreds or even thousands of locations. As a result, implementation timelines are typically longer than, for example, deploying project management software.

One technology I haven’t mentioned yet, but which complements the other store solutions, is Forecast & Replenishment (F&R). Advanced F&R systems leverage AI to analyze sales data, seasonality, and market trends, enabling accurate demand forecasting and optimal inventory management.

For retailers focused on long-term strategies with high returns, I would recommend integrating all the solutions mentioned above into a cohesive ecosystem for maximum efficiency and impact.

Anders Hedfalk: The first step for a retailer who wants to optimize processes is to understand and define those processes to a reasonable level of detail. Surprisingly, many retailers are only now beginning to develop and implement process ownership and management. In practice, it is difficult to control and improve a process that is not defined or measurable. Analytics, AI, and automation solutions require clear definitions of processes, information, and interfaces.

The optimization of a defined process is best achieved not by simply throwing technology at it, but by identifying which process steps and key performance indicators can be improved by a selected technology. This focused approach ensures that technology is applied where it has the greatest potential for impact.

One classic process-technology solution that is gaining even more potential with AI is the Forecast & Replenishment process. This process calculates the optimal order quantity to be replenished across all SKU locations for a retailer. It was a priority when I started in the industry 25 years ago – and it still is. The difference now is that we have more data to work with, algorithms are more powerful, and the emerging omni-channel adds additional complexity.

A major advantage of the Forecast & Replenishment use case is its scalability. You can expand and leverage forecast algorithms to address a range of high-potential use cases, including assortment optimization, dynamic pricing, promotion optimization, warehouse operations, and transport management. This versatility makes it a cornerstone for retailers aiming to optimize their processes effectively.

Are you curious to explore the full insights from the report? Download it right now on Solita’s website and stay tuned for upcoming editions providing further updates from Poland’s and EU’s retail landscape.