Retail Pulse Report: Five Consumer Behaviors That Will Impact Retail in 2025
Grimmer, darker, but with opportunities for bright spots for retailers and consumers alike.
Every year since at least 2009, I have gone through a year-end effort to understand what happened in the year before and how that is likely to shape the year ahead. This will be the third year where I’ve been a bit more formal about sharing the things that I’ve learned, at least with a wider audience.
Trends in Context
This is all part of three major steps that I feel are necessary for predicting retail’s future. You have to understand the health of the economy (which I’ll have a different post for, more on that later). The economy is a major contributor to consumer confidence and thus their willingness to spend.
You also need to understand the state of technology that could impact retail. This is a mix of consumer tech and enterprise tech, but with a greater emphasis on tech that has the potential to impact or shape consumer behavior. If consumers adopt a new technology, particularly one like social media that expands the potential touchpoints for engaging with them, then retailers almost have no choice but to figure out how to incorporate that tech into their portfolio, even if it barely drives any incremental sales.
It’s not always about marketing tech, either. It can change how customer service or prices are delivered, it can enable things that weren’t cost-effective before, like curbside pickup or home delivery, or it can change how consumers find and select products, as we saw with GenAI this holiday season. I’ll have a post on this later too.
But most importantly, there is the consumer mindset. 2024 was defined by the “vibe-cession” where consumers said the economy was a dumpster fire yet spent more in line with what the numbers were actually showing – that it was okay, but not a disaster and also not great.
So what will define 2025? I’ve gone over dozens and dozens of consumer surveys, some ranging from the proverbial “1,000 US consumers” to 100,000+ consumers across 50 different markets and everything in between, and with questions as lame as “do you shop at stores with messy bathrooms?” all the way to questions as non-retail but profound as “do you think climate change is real?”.
Not a Kinder or Gentler Year
For 2025, I can’t escape a darker, grimmer mindset among consumers. This by no means translates to pulling back on spending – economists and forecasters have been predicting that for well over a year and here we are coming out of what looks like the upper end of holiday forecasts, which means beating inflation for the first time in a long time.
But it does mean that consumers will likely be more demanding, and more punishing to brands and retailers if they don’t get what they want. Think about our collective mindset almost like the five stages of grief. The pandemic was a shock to the world, across many dimensions, not the least of which was the death of an estimated three million people. It was a loss – a loss of life, of dreams, of development milestones. A loss of progress. And that deserves – needs – mourning.
Mourning moves through stages, sometimes in no particular order, and sometimes iteratively. Denial, anger, bargaining, depression, acceptance. We’ve gone through denial – through hot vax summer and revenge travel and a determination that we could manifest a better world through our own optimism. And we’ve gone through depression, accepting the mess, giving up on life stages, raising awareness of the importance of mental health to overall wellness.
And now we seem to be entering an anger stage. The seeds were there in 2024, with consumer theft and abuse of staff. With returns fraud and coffee badging and quiet quitting. Those seeds could take hold, and they could also wither and die. Certainly the economy and tech advancements can also influence the outcome. But the evolving consumer mindset is definitely not as optimistic as I’ve seen in years past.
Whether it’s a tough year for consumer spending remains to be seen, but retailers and brands should be on notice: if you thought consumers were demanding and impatient before, just wait until 2025.
I promised 5 trends, and I have 5. Let’s dive in.
#1: Well-thy?
Wellness overall has been a very strong trend coming out of the pandemic. Vulnerability to an illness that the world has never seen before – and high visibility into just how susceptible the old and those with compromised immune systems really are – has meant that consumers have taken a hard look at themselves and decided they really, really need to make wellness a priority.
Over the last few years, that expanded to include mental health, raising awareness of the connection, the dependence even, between mental health and physical health to a height never seen before. Throw in social media and increased awareness of just how much it contributes to anxiety and depression, and you could see how some consumers might even define mental health as a prerequisite to achieving physical health.
In 2025, consumers are adding “emotional health” to the list. This moves beyond concerns about depression and anxiety and a whole range of mental illnesses and into a much more subjective, qualitative realm of how people feel, and for retailers how brands and products make them feel. We’ve talked about experiential retailing for a long time, but now we’re talking about “emotional commerce” and “resonance” and “feeling connected”. These are a lot harder to measure, a lot harder to deliver consistently, and a lot harder to achieve at scale.
And, like all the trends I’ll cover, it has contradictions. There are positives and negatives in here that could make this trend something that benefits retailers and consumers, or gets dark fast.
Hidden under the covers are things like autonomy and control over one’s own life as a marker of achieving wellness. Which can spin out to “red flagging” (perhaps a new, more individualized version of cancel culture), and life hacking that borders on the toxic pursuit of wellness, but could also refocus on slower, quieter, healing narratives – about ageing better, not just living longer.
And that‘s why I rebranded the trend this year as “Well-thy” – both because consumers may very well define their success as how “healthy” they are, but also because even wellness could be polarized, with the pursuit of longevity (a pursuit being driven by the ultra-wealthy) driving out general, every-day concerns and care.
Sources & Inspiration:
The New Quality of Time, ACCOR
Unveiling 2025, NextAtlas
Global Trends 10th Anniversary, Ipsos
Top Global Consumer Trends, Euromonitor Passport
#2: Lonely
It’s hard to separate this trend from others like Emotional Gratification or Climate Demands below, or Well-thy, as just covered. Consumers came out of the pandemic wanting the world to get better (or back to “normal”) fast, and grew frustrated when it turned out those expectations weren’t very realistic.
We saw some signs of loneliness as a symptom that needed to be cured by Wellness. And we saw consumers embracing the mess not just to give up on trying to will the world to a better place, but also to prove their own humanity in the face of curated, generated perfection.
This year, it’s a full-blown state of mind. Ed Elson, subbing in for Scott Galloway’s No Mercy/No Malicenewsletter at the end of the year, pretty much laid it all out there. Consumers are lonelier than ever, even living alone, reporting fewer or no friends, reporting feeling disengaged and isolated by social media. And alienated.
Again, a crossroads for consumers: they could lean into this isolation and alienation. They can believe they have stronger relationships with MrBeast or Joe Rogan than with your brand – and those things are happening. There’s a very real threat to brands that they are usurped by AI chatbots and influencer recommendations on TikTok and YouTube.
Or consumers can find connections. They have been demanding that stores and shopping malls do more to combat loneliness. That brands and retailers do more.
Now they’re getting specific. Private social clubs, where they join to meet like-minded people. Wellness clubs where social icebreakers are the whole point, not the opener. They’re linking it with wellness to find ways to make collective impact – volunteer groups that provide individual and societal fulfillment all in one go. And they’re trying to look behind the brand and the store to see if you’re human too.
Sources & Inspiration:
People are the New Brands, No Mercy / No Malice
Global Trends 10th Anniversary, Ipsos
The New Quality of Time, ACCOR
Consumer Trends 2024 – Mid-Year, The New Consumer / Coefficient
#3: Emotional Gratification
Coming out of Well-thy and Lonely, one big solution that consumers seek is emotional gratification. Think back to Marie Kondo and “does this item bring you joy?”.
If 2024 was about deal-seeking behavior, 2025 will be about value-seeking. This is not about the lowest price. Consumers want to buy less – in the last few years they’ve expressed their climate goals as doing more with less, buying lasting things, reducing their overall “footprint” or environmental impact.
Now we’re looking at consumers who will only want to buy if the item promises lasting emotional impact. They already feel like they are trying to do more with less. Now they want the fewer things they own to be the things that they want, as in desire, and not just things that were a great deal.
They’ll look for that from retailers and brands too – it’s not going to be enough to sit a product on a shelf (and honestly, that hasn’t been enough for several years). It has to be in an environment that creates emotional attachment and resonance.
Does that sound hard to accomplish in a retail setting? It is.
Sources & Inspiration:
Top Global Consumer Trends, Euromonitor Passport
Solving the Consumer Equation 2030, The Future Laboratory and AfterPay
European Fashion Retail '24: Standing out in the sea of sameness, Google / Kantar
Interline’s 2024 Year in Review
Unveiling 2025, NextAtlas
What Matters to Today’s Consumers, Capgemini
#4 Climate Demands
In the last few years, sustainability has been a choice – a choice for consumers to make for how they want to live their lives, and a choice for how much companies and governments have wanted to pursue sustainability investments.
A large majority of consumers no longer see this as a choice. Interesting enough, whether right or wrong, they believe that they’re doing pretty much all they can, but that the problems are big enough that individual action is just not going to be enough. Governments and businesses need to step up.
In general, consumers seem to trust sustainability claims, at least in terms of product features – plastic-free, all-natural, organic. But they’re pretty much still not willing to pay more for them. And they increasingly look to retailers and brands to deliver product innovation that also takes sustainability into account – no one wants to see a product innovation that means more microplastics or forever chemicals.
Fashion in particular has a challenge, because the EU is moving fast to make decarbonization a legal obligation – and for fashion, that would include the carbon footprint of overproduction. The industry has made a whole business model out of over-producing, then marking down, then destroying what was left (or shipping it to the southern hemisphere). But as they must increasingly bear those costs more directly, not just in margin but in the cost of legally disposing of overproduced clothing, then that model will have to change.
Consumers are looking for proof points here too, not just claims. They’ve become more sophisticated about the claims that companies make that are smoke & mirrors, and they want to see rawness in results and progress, and even a rugged naturalness incorporated into products almost as a proof point that they are sustainable.
This trend too could run afoul of the whole autonomy dark side of wellness, by turning into “dopamine detox” and “appetite suppression” and “deinfluencing”, where not purchasing things becomes a badge of honor, and consumers don’t pull back so much as ignore retail all together.
Sources & Inspiration:
The New Quality of Time, ACCOR
Top Global Consumer Trends, Euromonitor Passport
Global Trends 10th Anniversary, Ipsos
Interline’s 2024 Year in Review
Unveiling 2025, NextAtlas
What Matters to Today’s Consumers, Capgemini
#5: Gaming the System
I saved the most depressing for last, which is all about a fatalistic view among younger generations that the economy is rigged, social media is rigged, and they will not be better off than their parents or grandparents. Their reaction is to reject “normal” life milestones, to live without care because our AI overlords will either enslave us all anyway, or figure out how to make things better. If you’ve heard a Gen Zer say “I’ll never be able to afford a house” you’re hearing the opening call of this trend.
And they’re determined to game the system they see as eating away their possible futures. Because a chat interface made it so easily accessible, consumers are adopting GenAI at a pace that far outstrips earlier tech innovations, and likely faster than most companies are internally. Sure, they’re primarily using GenAI to make memes. This should not be shocking. But they have plans. And those plans will be to disintermediate pretty much everyone.
Who needs a brand, or a store, or even an online presence (other than to train the model) if it’s ChatGPT or Perplexity that are going to tell you which product to buy? You don’t even need to know the product’s brand, let alone the retailer’s, in order to get it.
The stat that stood out to me the most here: “55% of consumers believe GenAI will advocate on their behalf by 2025, negotiating with brands and companies to get the best products and services for the best price.” – The Rise of the AI Powered Consumer, Prophet.
If the bot is doing all the work, why would consumers need brands? More specifically, why do they need you?
Top Global Consumer Trends, Euromonitor Passport
Tech Trends 2025, Globant
The Rise of the AI-Powered Consumer, Prophet
Global Trends 10th Anniversary, Ipsos
People are the New Brands, No Mercy / No Malice
Solving the Consumer Equation 2030, The Future Laboratory and AfterPay
A Cautionary Tale
When I look across all of these researchers asking consumers all around the world variations on the same questions along with totally different questions – and coming to the same conclusions – I do tend to give that a lot of weight.
These five trends aren’t carved in stone, and while the drivers may all be the same, consumers can respond to those drivers in radically different ways. And, in fact, one thing that 2025 seems chock full of is more contradictions and polarization. Almost every trend has a light side and a dark side as possible outcomes.
But most important to take away from all of this is: this doesn’t mean consumers will stop spending. It does mean they will seek out retailers and brands that answer what for them may be unconscious or unnamed cravings. It means what worked last year may fall completely flat this year as the consumer mindset evolves.
And if you made it this far, it also means you likely won’t read the news the same way ever again! You’ll see one of these trends under nearly every news story, whether retail or in general. These aren’t the only trends out there, but I think they will be the most impactful.
This isn’t all there is to say about the consumer mindset. After I explore tech trends and the economic outlook, what comes next is how this all comes together to shape what consumers want from retailers – and how well retailers in general are positioned to meet those needs and demands. Consumers move faster than retailers and it’s in these gaps where retail winners and losers are made. So stay tuned for more!