How might SMBs embrace the potential of Ai in 2025?

Since the advent of the internet itself, few technologies have experienced as much hype as Ai. In the space of a couple of years, it has evolved from a tool of great potential, but that was relatively unknown outside technology and developer communities, to front page news. Its potential is vast, but still comparatively untapped.

According to a report by McKinsey, 2023 was GenAI’s ‘breakout’ year. But in just over a year since that report was launched, Ai has already evolved much beyond that point. Investment is accelerating and use cases are coming to market regularly. In 2025, that should continue.

But while much of the conversation focuses on consumer use cases or adoption amongst global businesses, what about its impact on SMBs? And particularly those in the retail and hospitality industries, which collectively employ over one million Australians?

Ai in Hospitality in 2025

Considering the traditional nature of preparing or consuming food and drinks, hospitality isn’t always at the top of the list of sectors that are talked about in conjunction with Ai, but Australia’s vibrant, diverse and world-renowned hospitality industry should continue to feel the benefits of Ai in 2025.

Indeed, according to Lightspeed research released earlier this year, 91% of Australian hospitality operators are already leveraging Ai in some capacity in their business operations. When asked how they were using Ai, 38% said for marketing and promotions, followed by employee rostering (36%), inventory management (33%) and reservations (30%).

When asked what they perceived the biggest opportunity Ai can bring to the hospitality industry, 28% said improved efficiency, followed by increased revenue and reduced overheads (26%), customer acquisition and retention (25%) and improved menu planning (21%).

For Australian SMBs in this space, Ai has the potential to offer a competitive edge in 2025. Ai-powered reservation systems should become more common, through which venues will have the potential to use dynamic table allocations based on real-time capacity, customer preferences, and historical data from their POS system. The results can include maximised seating efficiency, reduced wait times, and optimised revenue during peak periods.

In the kitchen, Ai can enable venues to improve menu planning and inventory management, by analysing sales trends, seasonal ingredients, and supplier costs to recommend profitable menu items and reduce food waste. For SMBs, this means running a more sustainable and cost-effective operation.

More venues should also explore how Ai can streamline reservations, share personalised recommendations based on guest habits, and help optimise rosters and improve team efficiency. Overall, given the already high usage and perceived opportunities for the future, Ai is poised to have an important impact on venues of all sizes – including SMBs – across Australia in 2025.

Ai in Retail in 2025

Ai’s potential for retailers in 2025 is equally as tantalising. One of the biggest impacts is expected to be related to personalisation and creating experiences that feel tailor-made to each and every shopper. In a competitive industry, where consumers are spoilt for choice, this is very important.

Using Ai to analyse real-time data, retailers will have the potential to predict customer preferences with increased accuracy. From personalised recommendations to dynamic pricing – which can help to maximise seasonal demand for one product, or discount overstocked items – Ai should be able to help retailers to optimise their offerings, driving higher sales and customer satisfaction.

Inventory management, like with hospitality, is expected to become more efficient and insights-driven thanks to Ai. Through advanced analytics and forecasting, even small retailers could be able to analyse purchasing trends, economic influences and even external factors to ensure stock levels are well-aligned with demand. For example, if a heatwave is approaching, Ai could potentially advise a retailer to stock up on – or roll out promotions for – any beach or outdoor SKUs in their inventory. In a competitive landscape, where economic pressures persist, this would better equip retailers to increase efficiency and profitability.

It’s becoming increasingly clear that Ai isn’t a passing fad, but a tool capable of revolutionising the way we live and work. For SMBs in two critical industries like retail and hospitality, this is no different. SMB owners start businesses to pursue a  passion, not because they love spending hours on inventory, reconciliation, or schedules. That’s a necessary part of business ownership, though, but in 2025 the burden on many Aussie small businesses should start to ease as Ai use cases continue to advance.

Simon Le Grand is Senior Director of Marketing, APAC at Lightspeed

Last Updated on December 19, 2024 by Simon Le Grand