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.
The retail industry is on the cusp of a new era defined by rapid technological advancements, evolving consumer expectations, and a complex risk landscape. By embracing the trends as priorities for the year ahead, retailers can position themselves for success, driving growth, enhancing profitability, and shaping the future of the industry.
Deloitte has identified six key trends that will shape the retail industry in 2025:
The year ahead will require retailers to focus on the need for rapid response to cultural trends and consumer demands.
2025 will continue the evolution of the customer experience. Technology and smart, innovative thinking will deliver more personalisation at scale.
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
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.
In the year ahead, retailers will need to be on the front foot to effectively respond to the emerging trade, risk and regulation landscape.
2025 will see retailers continue to focus on driving down costs whilst optimising margins, pricing and promotions together with working capital.
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.
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.