Every transformer loss has a specific engineering fix

Transformers — AQA A-Level Physics

Each source of energyThe capacity to do work. Measured in joules (J). loss in a transformer can be reduced by a specific design choice. Examiners expect you to match the fix to the correct loss.

Reducing resistive (I²R) losses in the coils

Use thick copper wire with low resistanceThe opposition to currentThe rate of flow of chargeA property of matter that causes it to experience a force in an electromagnetic field. Measured in coulombs (C).. Measured in amperes (A). flow. The ratio of potential difference to currentThe rate of flow of chargeA property of matter that causes it to experience a force in an electromagnetic field. Measured in coulombs (C).. Measured in amperes (A).. Measured in ohms (Ω).. Thicker wire has a larger cross-sectional area, which reduces resistanceThe opposition to currentThe rate of flow of chargeA property of matter that causes it to experience a force in an electromagnetic field. Measured in coulombs (C).. Measured in amperes (A). flow. The ratio of potential difference to current. Measured in ohms (Ω). ($R = \rho L / A$).
Keep the wire short by winding the coils tightly around the core.
PowerThe rate of energy transfer. Measured in watts (W). dissipated = $I^2 R$, so reducing R directly reduces wasted energyThe capacity to do work. Measured in joules (J)..

Reducing eddy current losses in the core

Laminate the core. Instead of one solid block of iron, build it from thin sheets of iron separated by thin layers of insulation (varnish or oxide).
The insulating layers break up the paths that eddy currents would follow. Smaller $loops = smaller currents = less I^{2} R heating$.
The laminations are oriented parallel to the magnetic fluxThe product of magnetic flux densityMass per unit volume of a material. Measured in kg m⁻³. and the area perpendicular to the field. Measured in weberThe SI unit of magnetic flux. One weber is the flux through an area of 1 m² when the magnetic flux density is 1 T perpendicular to the area. (Wb). direction, so they don't interrupt the flux path through the core.
This is the single most important design feature of a practical transformer.

Reducing hysteresis losses

Use a soft iron core. 'Soft' here means magnetically soft, which is easy to magnetise and demagnetise.
Soft iron has a narrow hysteresis loop, which means less energyThe capacity to do work. Measured in joules (J). is wasted per magnetisation cycle.
Hard magnetic materials (like steel) retain their magnetism and resist demagnetisation. That is exactly what you don't want in a transformer core.

Reducing flux leakage

Wind the primary and secondary coils on top of each other (not on opposite sides of the core). This maximises the proportion of flux that links both coils.
Use a closed core design (toroidal or shell type). A complete loop of iron keeps the flux contained within the core.
Minimising the air gap in the core reduces flux leakage because iron has much higher permeability than air.

Common Mistake MEDIUM

Students often: Avoid saying 'laminating the core reduces hysteresis losses'.
Instead: Lamination reduces eddy current losses, not hysteresis losses. Hysteresis losses are reduced by using soft iron (a material with a narrow hysteresis loop). These are two different losses with two different fixes.