The Future of Retail: Key Trends That Will Dominate 2025
The retail landscape is evolving rapidly, and staying ahead of the curve is more crucial than ever. A recent GWI webinar, Retail’s Future – Trends That’ll Dominate 2025, shed light on the emerging trends shaping the industry. Below are the top insights from the discussion, providing a glimpse into what retailers can expect in the coming year.
1. Hybrid Shopping
Shift in Preferences
Online shopping was previously dominant, but US consumers now equally prefer in-store shopping. This reflects a return to traditional values, with consumers seeking tactile experiences and confidence in their purchases.
Enhancing In-Store Experience
Interactive Features:
Product demonstrations (+12%) and free samples (+7%) have become significant motivators for in-store shopping.
Tailored Experiences:
- Gen Z prioritises tech-forward, interactive environments with elements of discovery and excitement.
- Baby Boomers focus on clean, tidy stores (76%), while Gen Z (52%) values in-store sales.
Phygital Retail:
Combining the speed of online shopping with immersive in-store experiences and personalised customer service.
Category-Specific Insights
Essentials like groceries are primarily purchased in-store (74%), though convenience-driven services like delivery and click-and-collect are growing online.
Luxury goods remain heavily in-store (16% prefer online), as the tangible experience is vital.
Gen Z prefers in-store shopping for entertainment (e.g., video games), while Gen X dominates for high-value items like cars and furniture.
2. Social Commerce & Its Impact
Brand & Product Discovery
Key Channels:
Social media ads (+12%) lead discovery for Gen Z, followed by in-store displays (+8%), social recommendations (+7%), and influencer endorsements (+7%).
Shifting Habits:
While TV ads were dominant in 2015, social media is now a critical channel, especially for younger generations. It ranks 4th for Millennials and Gen X but doesn’t yet feature in Baby Boomers’ top five.
Gen Alpha’s Influence
Increasingly using social media for shopping inspiration and following brands. Brands must approach engagement responsibly, offering age-appropriate products and avoiding harmful trends (e.g., anti-aging products for young consumers).
TikTok Shop
Over 25% of TikTok users have purchased via TikTok Shop. Success strategies include competitive pricing, targeted ads, and leveraging social proof through customer reviews.
TikTok combines engaging, entertaining content with seamless shopping, helping brands boost both sales and awareness.
Balancing Reach vs. Cultural Power
Platforms like TikTok rank lower in audience reach but higher in cultural influence, shaping trends. Brands should strike a balance between reach (e.g., Facebook, Instagram) and cultural power when designing social strategies.
3. AI in the Purchase Journey
Transforming Search
Gen Z leads AI adoption, using chatbots and platforms like ChatGPT for product searches. They prefer AI over traditional search engines or retail websites.
AI adoption is accelerating—achieving in one year the usage levels that voice search took a decade to reach.
AI-Driven Personalisation
Personalisation has shifted from a “nice-to-have” to an expectation. Consumers want tailored recommendations, streamlined checkouts, and efficient inventory updates.
Shoppers actively using social platforms like Snapchat and Reddit are most receptive to AI-powered personalisation.
Trust & Transparency
Trust is critical, with 40% of consumers prioritising trustworthy AI platforms. Retailers must ensure accuracy and transparency to build consumer confidence.
Advertising with AI
40% of consumers are comfortable with AI-driven ads, finding them less intrusive and more relevant. AI offers brands an opportunity to deliver timely, personalised content that aligns with user intent.
Key Takeaways
Hybrid Shopping: Retailers must optimise both online and in-store experiences, using digital tools and immersive, tailored interactions to meet consumer needs.
Social Commerce: Social media continues to reshape the consumer journey, with platforms like TikTok and Instagram combining discovery, engagement, and purchase seamlessly.
AI Adoption: As AI tools grow in adoption, retailers must integrate them into the shopping journey, focusing on trust, personalisation, and creative applications to remain competitive.
Retail in 2025 will be defined by innovation, personalisation, and a seamless blend of digital and physical experiences. Brands that embrace these trends will be well-positioned to thrive in the ever-evolving landscape.
Ella Conway
Account Executive
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