The Top 10 Retail Industry Trends You Should Know About

Keeping up with retail industry trends is a bit like herding cats, but it’s an important exercise considering the continuous, near-blinding pace of change. Retailers face a mix of challenges and opportunities as we head into 2025. Inflation is expected to slow to 2.3% in 2025, which is surely good news as it buoys consumer confidence. 

Trends point to consumers prioritizing value, while also demanding more personalized experiences. And everyone’s got the environment on their mind. Businesses, for their part, are adapting. It’s now or never as more and more shopping experiences bridge offline and online channels.

Top 10 Trends in the Retail Industry

Some of this year’s trends aren’t exactly new, a few are a bit surprising, and still others—like what’s happening with returns—are pretty exciting.  Here are our favorites from 2024. 

1. Shopping is everywhere

Physical stores aren’t going anywhere, but neither is online shopping. Shoppers now move between digital and physical channels (e.g., “phygital”) without thinking twice. According to GWI, Boomers stand out as the only generation where a majority (58%) prefers in-store shopping. But over 40% of Gen Z also prefer walking into stores, a number that hasn’t budged since 2020.

Top brands like Sephora are incorporating what were once only in-store experience into digital spaces. Sephora’s AR Virtual Artist is an app that lets customers give themselves a virtual makeover. It’s meant to mimic the in-store experience of trying out colors and products on an individual basis or combine different products to see how they work on your own face. There’s a social component which makes it easy for users to post and share their virtual looks on social media – blending channels (and makeup) in a way that’s fun and useful.  

2. Personalization is also everywhere

From a consumer perspective, personalization is a high priority and people will volunteer their valuable personal data to make it happen. Increasingly, “good brand experience” translates to a personalized experience – one that makes all elements of a buying journey hyper-relevant to an audience of one. That includes the basics—personalized product recommendations, content that speaks to me versus the guy down the street, and context. Don’t offer me a winter jacket in February or March unless it’s half off. But personalization also needs to be subtle and ever-present. For example, at the search bar of a retail website with personalized results fueled by AI.

AI site search uses machine learning and natural language processing – subsets of AI – to interpret what shoppers mean beyond what they type into the search box. A shopper searching for “comfy office chair” might see ergonomic desk chairs, while a gardener typing “gloves” sees garden gear – not cycling gloves. This context makes shopping personal and, importantly, more relevant to the customer.

3. Inspiration is a growing UX trend

Not every buying experience starts with a specific need—often we’re looking for inspiration or guidance. This is a defining motivation for Gen Z shoppers, who look to the platforms like TikTok and Instagram for product ideas and inspiration more than to research new products. It’s a behavior that has began extending to digital elders (e.g. millennials and Gen X) as well.

You can’t turn your retail website into TikTok, but you can add some elements that appeal to the inspiration seekers (Sephora’s VR app comes to mind here). Incorporating trending products, groups of complimentary products, and adding interactive features like product finder quizzes can spark ideas and appeal to shoppers who’ve grown used to looking to digital channels for inspiration.

4. Mobile-friendly is now mobile-first

As the temperature continues to drop and holiday shopping picks up, smartphones, not Santa, will play a starring role.  Mobile holiday sales are expected to reach over $128 billion—about 53% of digital sales—in 2024. Turns out phones are better than Santa’s elves at getting stuff done.

Mobile shoppers need things to be easy. Do this for them with a checkout process that makes sense and incorporates mobile-ready features like autocomplete, digital wallets (Apple Pay, Google Pay, Paypal, etc.) and a non-clunky mobile UI that loads fast. 

5. Sustainability gets real…sort of

Consumers are still saying they want eco-friendly products and will pay more for them, but data from GWI says otherwise, at least within some retail categories. The demand for locally sourced, eco-friendly food has dropped in European markets. This is tied to price, people may say they are willing to spend more but if they can’t afford a given product, the demand for that product drops.

That said, shoppers are tired of empty promises when it comes to sustainability, skeptical of disingenuous green marketing claims. A Mintel report found 60% of consumers believe companies fabricate their eco-friendly statements. Work toward improving communication and reduce skepticism—and make sure you lean into the value of eco-friendly items and practices.

6. Returns offer new opportunity

Returns come with a billion-dollar price tag, but technology promises to reduce the pain in two ways—by preventing returns from happening entirely and connecting with customers in new ways when they do return something. Elements like “try before you buy”, detailed product visualization tools (e.g., the Sephora makeup ap), size-matching tools, and customer reviews—all of this works to reduce return rates.

Returns, when they do happen, are becoming tools to reconnect with shoppers, blurring the lines between digital and physical experiences. Amazon customers can bring items to drop-off locations (no packaging necessary) using a mobile QR code for an instant refund. Amazon’s Whole Foods, Amazon Fresh, and Amazon Go physical stores double as return hubs for Amazon shoppers. Amazon also partners with Staples, Kohl’s and The UPS Store to make returns easy for customers. 

Dynamic offers are increasingly being incorporated into the returns process with both partners benefiting from this. It’s not uncommon for an Amazon customer to be handed a Kohl’s coupon when they drop off their return. Just like buy online, pick up in store (BOPIS), returns give retailers an opportunity to connect physical and digital buying journey.

7. Recommerce goes mainstream

Second-hand shopping (e.g., “recommerce”) has shed its stigma. It’s going mainstream thanks to our kids and grandkids – and online-only websites like Depop that connect buyers and sellers of vintage, preowned, streetwear, and handmade clothing. It’s a marketplace similar to Etsy or Ebay, with a strong social element that appeals to Gen Z shoppers thanks to influencers and celebrities like Zendaya who are normalizing and glamorizing vintage clothing. Even luxury shoppers who once viewed pre-owned items as distasteful, now embrace the trend. According to GWI, they’re more likely to admit to purchasing pre-owned items online compared to average consumers. 

8. Consumers love BNPL 

Before we had Buy Now Pay Later (BNPL), we had old-school installment plans which let consumers pay for large-ticket items in small, manageable installments. This payment approach got a digital upgrade with BNPL, introduced in the 2010s as a way for consumers to order items and pay in increments over a few months. BNPL was incredibly popular during the pandemic and is now a full-fledged trend. 

Adobe predicts BNPL spending will hit a record $18.5 billion during the 2024 holiday season – with most of that being spent in November. Millennial and Gen Z shoppers are leading the way here too, with 39% and 38% (respectively), planning to use BNPL options to help them manage cash flow and afford items otherwise out of reach.

9. Retail media networks take off

Retail media networks (RMNs) are emerging as a significant revenue stream for retailers like Walmart and Target who have a large customer base and the ecommerce traffic that comes with it. RMNs use their wealth of first-party customer data to offer targeted ads across their networks. 

It’s a new high-margin channel for retailers that’s getting more sophisticated thanks to AI and machine learning for targeting, automation, and optimization. Some major players are forming partnerships to create larger networks, breaking out of endemic retailer/CPG relationships to include products they don’t directly sell. 

10. Luxury is becoming less conspicuous

Consumers still love luxury, but the way they’re embracing it is changing—specifically, discretion is key. It’s a trend referred to as “quiet luxury” or “stealth wealth.” Items are low-key and basic (t-shirts, bomber jackets, baseball caps) and dispense with flashy branding and logos. This trend aligns with the growing demand for ethical and sustainable retail. Consumers increasingly want premium items that also reflect responsible production methods and transparent supply chains.