Ecommerce trends for 2025: Retailers who prioritize LTV over AOV will gain ground

This is the fourth article of our four-part series on the ecommerce trends we see on the horizon for 2025.

There have never been more competing options in the ecommerce space than there are today. The barriers to entry for opening an online retail outpost are low and there are countless channels for entrepreneurs to hawk their wares. That’s why effective ecommerce product discovery is mission critical for ecommerce retailers in 2025’s overwhelming market. 

However, the reality is that many consumers encounter frustration when navigating ecommerce platforms, often leaving without making a purchase. To reclaim engagement and loyalty, the fashion industry must reinvent how products are discovered by leveraging advanced technologies like artificial intelligence (AI) and reshaping the shopping journey to meet modern expectations.

The overwhelmed shopper

The current landscape of discovery in fashion

The online shopping experience is in a state of disarray. A 2022 survey revealed that 53% of general retailers, including fashion companies, believe their current digital tools are insufficient for delivering the shopping experiences consumers expect. While consumers have more choices than ever, this abundance often works against them. Studies reveal that 74% of shoppers abandon online purchases due to the overwhelming number of options, leading to decision fatigue. This paradox of choice—where too many options inhibit decision-making—is costing retailers billions in potential revenue.

The ineffectiveness of basic search tools

Adding to this frustration is the inadequacy of traditional search tools. 80% of shoppers report dissatisfaction with search functionality, citing irrelevant results and a lack of personalization. Many existing ecommerce platforms rely on static keyword-based search engines, which fail to understand user intent or provide contextual results. For example, while 77% of consumers regularly use search filters, many find these filters either too sparse or lacking the specificity needed to narrow their options effectively.

Impersonal online shopping experiences

Impersonal shopping experiences exacerbate the issue. 78% of consumers feel frustrated when their online experiences fail to reflect their preferences. Generic recommendations often result in a disconnect, leaving shoppers feeling unseen and undervalued. These limitations underscore the need for a dramatic overhaul of how fashion products are discovered online.

Complication: The challenges of reinvention

The role of AI in addressing challenges

The advent of AI is ushering in a new era of product discovery that promises to alleviate these frustrations. AI-powered tools can deliver personalized and intuitive search results by understanding user behavior, preferences, and context. To understand and leverage this new technology, 58% of online retailers are using AI-driven personalization platforms aimed at enhancing customer experiences. These platforms enable ecommerce sites to promote timely products that shoppers are actually interested in purchasing, not just is popular for the masses.

AI-powered visual search is another technology making for better product discovery. Visual search enables customers to search through a shop’s catalog using images. A shopper may see a dining room chair at a restaurant and want to know where they can buy one that looks similar. With visual search, he can simply snap a photo and be shown other products that fit a similar aesthetic. When implemented, visual search has increased user engagement by 22%. Customers expect to be able to use a range of mediums to search for the products that they want and they expect relevant results in return.

The integration of social commerce

Social commerce platforms are redefining discovery by blending shopping with entertainment. TikTok Shop, for example, leverages AI to integrate personalized recommendations directly into users’ feeds. This approach aligns with the preferences of Gen Z consumers, who are looking for hyper-personalized product recommendations and have notoriously short attention spans. These organic interactions feel more like recommendations from a friend than traditional advertisements. According to experts, this synergy between social interaction and commerce is reshaping how consumers discover and purchase fashion items.

Platforms like Pinterest are also capitalizing on AI’s potential, using machine learning to suggest products that resonate with users’ unique tastes and preferences. This fusion of AI and social media is transforming discovery into an engaging, interactive, and satisfying experience for consumers.

Practical barriers to discovery success

Integration Challenges: Integrating AI into the existing systems of many retailers presents significant hurdles. Legacy infrastructures often lack the flexibility to accommodate advanced AI tools, creating operational inefficiencies. These challenges are compounded by the need for substantial investments in technology upgrades, workforce training, and process redesigns. Without addressing these integration barriers, retailers may find it difficult to unlock the full potential of AI and its transformative capabilities for product discovery.

Importance of High-Quality Data: The success of AI-driven solutions hinges on the availability of high-quality, cohesive data. High-quality data is not just about accuracy but also about consistency and comprehensiveness, as these elements enable AI tools to generate meaningful insights and deliver personalized, relevant experiences to consumers.

Need for Unified Data Strategies: To overcome these challenges, retailers must prioritize the development of unified data strategies. This involves consolidating disparate datasets into a single, well-structured repository that ensures accessibility and reliability. A unified approach not only enhances the efficiency of AI systems but also facilitates seamless integration with other digital tools.

From AOV to LTV – A new era of customer-centricity

Reinventing discovery in fashion requires a strategic pivot from emphasizing Average Order Value (AOV) to prioritizing Customer Lifetime Value (LTV). While AOV focuses on maximizing single transactions, LTV shifts the focus toward cultivating enduring relationships with customers. This transition not only promotes sustained revenue growth but also aligns with consumers’ increasing demand for meaningful, personalized shopping experiences.

Key investments for success

Investing in advanced search and personalization technologies is central to achieving this vision. AI-powered search tools offer a transformative solution by providing precise and contextually relevant results. These tools can interpret user intent more effectively, making the discovery process seamless and intuitive. For example, visual and conversational AI are being adopted to enable customers to find products through natural language queries or image-based searches, creating an experience that feels both modern and user-friendly.

Personalization also plays a pivotal role in fostering customer loyalty. Machine learning algorithms are capable of analyzing individual behavior patterns to deliver tailored recommendations that resonate with specific consumer preferences. Ensuring that these personalized interactions are consistent across all platforms, whether online, mobile, or in-store, enhances the overall customer experience and deepens brand affinity.

However, the reinvention of discovery necessitates more than just technological upgrades. A holistic approach is essential, one that integrates data, insights, and collaboration. Retailers must prioritize unifying their data systems to ensure AI tools can access comprehensive, high-quality information. This foundation is critical for enabling accurate and relevant personalization.

The fashion industry stands at a crossroads where effective product discovery can no longer be an afterthought. By leveraging AI and adopting a customer-centric approach, retailers can transform discovery into a seamless, engaging, and satisfying journey. Shifting focus from short-term gains to long-term value creation is not just an opportunity but a necessity to thrive in today’s competitive landscape. The time to act is now—to embrace innovation, meet evolving consumer expectations, and redefine the future of fashion discovery.