What’s in Store for the Retail Market in 2025?

If there’s one thing retail has proven in the last five years, it’s that it can adapt. From lockdowns to supply chain chaos, from inflation to digital disruption, the industry has been on a rollercoaster — and it’s still riding.

As we hit the halfway point of 2025, a new shape of retail is starting to emerge. It’s leaner, more experiential, more digitally connected — but also facing challenges that didn’t exist even 18 months ago. Based on the latest data from retail intelligence platforms and recent activity across high streets and ecommerce, here’s what’s really happening in retail right now — and what you need to watch.

The store is back — but not as we knew it

Despite the ecommerce boom of recent years, physical stores are not just surviving — they’re evolving. Retailers that once saw bricks-and-mortar as a liability are now treating it as a stage. Stores have become:

• Showrooms: Places to touch, try, and test before buying online.
• Logistics hubs: Locations for click-and-collect, same-day delivery, and returns.
• Brand theatres: Environments for events, demos, influencer campaigns, and immersive experiences.

Think of what Nike, Lush, or Apple do in-store — it’s no longer about transactions. It’s about story. Smaller independents are borrowing this approach too, especially in fashion and lifestyle retail.

Click-and-collect keeps growing

More than 60% of UK shoppers say they’ve used click-and-collect in the past six months. Why? It blends the convenience of online shopping with the immediacy of in-store pick-up — without delivery fees or waiting in for parcels.

Retailers from Primark to Boots are leaning hard into this model, often using it as a way to increase footfall and upsell. A customer who comes in to collect an online order often leaves with an extra item in their bag.

Retail media is now a serious revenue stream

Retailers are no longer just sellers of products — they’re selling audience. Companies like Tesco, Walmart, and Asda now offer “retail media networks” where brands can buy ad space across apps, websites, and even tills.

It’s no longer just about endcaps and flyers. Brands want data, and retailers have it — browsing behaviour, purchase history, loyalty card insights. Affiliates, agencies, and in-house teams are waking up to the idea that a supermarket can be a media platform.

Expect more advertising spend to shift away from Google and Meta into retail-owned ecosystems.

AI is here — and it’s operational

In 2025, AI in retail is no longer theoretical. It’s powering:

• Stock forecasting: Reducing waste and overstock through predictive analytics.
• Personalisation: Serving custom content and recommendations via email, app, and in-store screens.
• Visual merchandising: Using camera data to test displays and measure attention.
• Conversational commerce: Chatbots that don’t just answer queries, but guide product discovery.

Retailers that are embedding AI into their daily workflows are saving money and selling more. But those who treat it like a novelty are falling behind — fast.

Sustainability is shifting from marketing to infrastructure

Shoppers still say they want to buy sustainable products. But in 2025, it’s no longer enough for a brand to print “eco” on the box.

Retailers are investing in:

• Returns management systems to reduce landfill
• Closed-loop packaging to cut waste
• Localised fulfilment to reduce emissions
• Second-hand channels like pre-loved shops and recommerce platforms

It’s no longer just about consumer pressure — it’s about cost. Sustainable practices are often cheaper when embedded at scale. The smartest retailers are making it part of their logistics, not just their storytelling.

Checkout-free and cashier-light stores

The Amazon Go model — walk in, take what you want, walk out — hasn’t gone mainstream. But elements of it have.

Retailers like Sainsbury’s and Aldi are trialling “scan, bag, and go” options, with minimal or no human interaction. It’s not about replacing staff completely. It’s about speed, especially in urban stores where lunchtime and commuter traffic peaks.

In parallel, app-based payment inside stores (where you scan and pay via your phone) is reducing queue times and increasing impulse purchases.

So what’s the catch?

Despite all this change, retail in 2025 still faces significant headwinds:

• Inflation fatigue: Shoppers are weary. Even as wage growth catches up, psychological price thresholds have shifted.
• Returns are still a profit killer: Especially for apparel and homeware, where over 30% of online purchases are sent back.
• Regulatory headaches: From data privacy to greenwashing crackdowns, retailers are being scrutinised more than ever.

Retailers that thrive this year will be the ones who focus on operational excellence, smart tech, and meaningful customer engagement — not just gimmicks or steep discounts.

Final thought

Retail in 2025 is still finding its rhythm. Ecommerce isn’t replacing the store. AI isn’t replacing humans. But the playbook has changed.

The winners are those who see retail not just as a channel — but as a platform, a service, and a performance. And whether you’re a global chain or a one-store indie, the goal is the same: make it easy, make it personal, and make it worth the trip.