The global retail sector, projected to reach $35.2tn in 2025, has digital channels driving more than 60% of influenced sales and each successful click and customer collection is the result of a thousand moving parts.
Peter Ludi, Business Development Executive at redPanda Software & Solutions. Image supplied
These gains are being driven by technology, but that same technology is putting retailers under pressure as they’re forced to run two roads at once, one for transformation, the other for survival.
A recent HLB report found 87% of global retail leaders are worried about economic volatility and cyber threats even as 90% plan for revenue growth in 2025.
While there remains optimism, supply chain disruptions and broader uncertainty are colouring retail decision-making.
In South Africa, retail trade is forecast to grow 7.0% nominally and 2.0% in real terms, a modest rebound that reflects the market’s mix of both opportunity and fragility.
Companies need a smart way of balancing creative risk with platform reliability without compromising the operational foundations that make growth sustainable.
Innovation is momentum, but stability matters
Globally, retailers are investing in AI agents, personalised shopping experiences, and hybrid store formats to take customers along new and innovative routes to loyalty and engagement.
The National Retail Foundation (NRF) predicts digitally influenced sales currently exceed 60% with AI agents playing a growing role in creating conversational customer journeys.
However, this growth doesn’t come without constraints. If innovation is left unchecked, it can fracture the very systems that keep retailers trading.
This means structuring for ambidexterity – ensuring innovation and operational resilience advance in tandem.
Take KPIs and OKRs. One governs uptime, discipline and delivery. The other unlocks experimentation and strategic stretch. You put stability in KPIs and innovation in OKRs.
Research supports this approach. PwC believes that flexible supply chains and real-time inventory tracking build resilience and avoid costly disruptions, while Marsh’s Retail Leaders Report 2025 warns against reactive spending patterns, encouraging instead long-term strategic investment.
Trends vs. Hype: smart trumps fast
Too often, innovation is packaged as strategy by vendors with vested interests. This means that investment needs to be balanced with validation, and that retailers should consider a more modular approach to innovation and change. Even well-known technologies can trigger instability.
AI, for instance, is changing everything but too many retailers are buying it as a black box. It’s not a strategy; it’s an ecosystem of components that will only create noise. The smartest platform becomes useless if it fails under pressure.
What companies need isn’t smarter systems but smarter scaffolding.
And this scaffolding translates into API-led design, low-code adaptability, hybrid deployments and edge-first logic, especially in markets where power and bandwidth are inconsistent.
Retailers like Checkers have already leant in – Sixty60 grew by 58.1% for the year ending June 2024 because it bridged real-world constraints with digital agility.
One of the crucial success factors for the company was that it never became a technology company selling groceries, it was always a retailer using innovation to change the narrative.
Modular resilience defines growth
Modular resilience allows the shop to go on, even when connectivity drops. It allows the testing of a new AI tool without collapsing fulfilment. And it ensures supply chains can adapt, and pricing models can flex without systems failing.
The store becomes a resilient node which is equipped to operate in the dark, run on local networks and respond in real time.
Retailers are already blending formats as they combine grocery, fast food, fashion, and fulfilment into hybrid environments. More and more hospitality locations have opened with co-working spots which are all designed to pull foot traffic into stores.
Delivering on the dual mandate
So, what should a retailer be doing, practically, to meet the dual mandates of innovation and strategy?
Firstly, don’t underfund IT in pursuit of lean margins. A redPanda benchmarking exercise recently revealed that most South African retailers should be spending between 1.5% and 2.5% of revenue on IT.
Anything lower compromises performance; anything higher should be backed by scale or a major strategic pivot (such as moving to full e-commerce or launching in new verticals).
Second, find a balance between stability and innovation. Your consumers don’t see the supply chain algorithms, loyalty integrations or cross-channel orchestrations that make their smooth shopping experiences possible. They just want speed and consistency.
Finally, invest in modularity and architecture that enables change without breaking operations. This allows you to innovate within boundaries and find balance more effectively.
