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Retail Trends 2025

A year of bold moves

2024 was a year marked by significant political and economic shifts. With over 1.6 billion votes cast across more than 70 elections globally, the political landscape changed dramatically. Rising prices and a pervasive sense of dissatisfaction with the status quo fuelled voter frustration. Global uncertainties, from geopolitical tensions to economic anxieties, created a challenging environment for businesses and consumers alike.

Economic anxiety wasn't confined to the political sphere. In 2024, economists latched on to the term ‘vibecession’ as, despite some strong underlying economic data, consumer confidence and, as a consequence, consumer spending were generally subdued.

But there were also many positive stories from across the industry as several retailers successfully delivered on their strategies to drive growth across their business. Elsewhere, the transformative power of technology and continued advances in Artificial Intelligence (AI) drove efficiencies and improved effectiveness across business operations.

Looking ahead to 2025, the global economic outlook offers some hope to the industry. Inflation has decelerated sharply, some central banks are easing monetary policy, and the outlook for 2025 is relatively benign.

Then again, there are risks to the outlook. These include the prospect of restrictive trade policies, ongoing geopolitical tensions, perception that fiscal policies in major economies are unsustainable, and an increasing regulatory burden on businesses. In addition, European economies continue to experience slow or no growth, with productivity a major issue for the region.

When so much change is taking place, it can sometimes slow decision-making and limit big ideas. Success in 2025 feels like it will need bravery and boldness to cut through the noise and stand out from the crowd. With this in mind, we will see the most progressive retailers continue to innovate and change to adapt to challenges and find new sources of growth and profit.

1. Move at the speed of culture

The year ahead will require retailers to focus on the need for rapid response to cultural trends and consumer demands.

Retailers need to adopt agile approaches to product development and marketing, leveraging data and technology to respond quickly to evolving consumer preferences and cultural moments.

Fostering innovation through incubator programmes, partnerships with emerging brands, and a focus on AI-enabled products and services will be crucial for capturing consumer attention.

2. Curation, connection, and convenience

2025 will continue the evolution of the customer experience. Technology and smart, innovative thinking will deliver more personalisation at scale.

Delivering curated product recommendations, tailored communication, and seamless shopping journeys will be essential for enhancing customer loyalty and driving sales.

Creating inclusive and accessible shopping experiences, leveraging social commerce, and fostering a sense of community will be key for engaging consumers.

Optimising store formats, expanding rapid delivery options, and reducing friction at the point of sale will continue to be top priorities for meeting consumer expectations.

When so much change is taking place, it can sometimes slow decision-making and limit big ideas. Success in 2025 feels like it will need bravery and boldness to cut through the noise and stand out from the crowd.

 

Oliver Vernon-Harcourt, UK Retail Lead Partner

3. New growth horizons

Retailers will find new top and bottom line growth by targeting new consumer segments and identifying and scaling alternative revenue streams such as retail media.

Understanding the values, preferences, and influence of Generation Alpha will be crucial for retailers to cultivate long-term brand loyalty.

Expanding into new markets, acquiring businesses that align with strategic goals, and developing products and services for underserved consumer groups will unlock new growth opportunities.

Capitalising on retail media, offering capabilities as services, and monetising data will create new revenue streams and enhance profitability.

4. Tackle risk head on

In the year ahead, retailers will need to be on the front foot to effectively respond to the emerging trade, risk and regulation landscape.

Mitigating supply chain risks through diversification, near-shoring, and building strong relationships with suppliers will be essential for ensuring business continuity.

Implementing robust cybersecurity measures, training employees, and partnering with cybersecurity experts will be crucial for protecting sensitive data and maintaining customer trust.

Investing in advanced loss prevention technologies, optimising store layouts, and implementing employee training programmes will help reduce shrinkage and protect profits.

Staying informed about evolving regulations, particularly in areas such as sustainability, data privacy, and AI, will be essential for ensuring compliance and mitigating risks.

Contact our team

To discuss how any of these trends may impact your business, contact our team of retail experts.

5. Unleash breakthrough efficiency

2025 will see retailers continue to focus on driving down costs whilst optimising margins, pricing and promotions together with working capital.

Implementing shared services, investing in automation, and optimising the supply chain will drive cost savings and enhance productivity.

Leveraging data analytics, AI-powered pricing solutions, and dynamic ranging will optimise pricing and promotional strategies, maximising profitability.

Improving inventory management, negotiating favourable payment terms, and leveraging technology to gain real-time visibility of stock levels will free up cash flow and improve financial performance.

6. Empower the future-ready workforce

Retailers will continue to provide the technology required to augment employees jobs and skills, and develop culture and leadership to make decisions, be bold and move at pace through uncertain times.

Investing in training programmes, offering competitive compensation and benefits packages, and creating a positive and supportive work environment will be essential for attracting and retaining skilled employees.

Providing employees with the training and tools they need to thrive in a rapidly evolving technological landscape will be crucial for maintaining a competitive edge.

Creating a culture of wellbeing, addressing workplace safety concerns, and providing employees with the support they need to manage stress and maintain their mental health will be paramount.

Leaders who can provide a clear vision, foster a culture of collaboration and innovation, and navigate uncertainty with transparency and empathy will be essential for success in the years to come. 

To learn more about Deloitte's Retail Trends 2025 and discuss how these trends may impact your business, please contact our team of retail experts.

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