What will 2025 look like for retail and eCommerce?

Say it quietly but I think there will be a return to growth for eCommerce this year. Yes, the UK is teetering on recession. Yes, consumer confidence remains -16 points. And yes, Peak 2024 was a stagnant wash out (and that’s before we have even felt the impact of the NIC/minimum wage increases in April!). But supply side efforts will kick in in 2025. 

NIC and minimum wage increases will impact store’s staffing, experience and pricing – driving people online. The new disruptors such as Temu and Shein are really sharpening the competitive spirit of UK eCommerce and I believe the broader industry will rise to the challenge and all ships will rise with the tide. 

So here are my predictions for retail and eCommerce in 2025:  

The Good: 

Online will rebound and bottom out early this year returning to acceptable growth. ONS (the Office for National Statistics) said online sales accounted for 25.9% of total sales in February 2024 and with online continually growing its share since 2022 we expect to see this growth continue. Plus, the constant improvements to online channels Google, Meta and Tik Tok, supported by AI driven marketing, will drive more investment, more sales and growth online. 

The Bad: 

Retail in general is going to suffer, alongside leisure. It’s the thousands of minimum wage store assistants who will be facing the prospect of redundancy and fewer hours. The knock-on effect of this is less stock in store to touch, feel and try on, longer lines at the till and less money spent in brick-and-mortar stores. 

The Downright Ugly: 

I think 2025 will be the end of the High Street as we know and love it in the UK. I don’t think there will be enough great branded and multi-category stores alongside offices and leisure to drive the necessary footfall. We’ll see more branded store closures and more charity shops and vape stores opening, which lack mass appeal. Retail will make its big move to out-of-town retail parks which are curated and planned to an inch of their life to ensure a successful ‘one stop shop’ experience for customers. 

The Wildcard: 

2025 will be the year of retail consolidation. Frasers and Next Groups have led the way, but we’ll see ‘second movers’ replicate their consolidation strategy. Buying up legacy brands, launching marketplaces, being the focal point of smaller out of town retail parks and positioning themselves as data and media owners. It’s clear this strategy is working for Next and Frasers and in a tough year for retail we’ll see brands seek safety in numbers. 

If you need support with your digital marketing strategy to make sure you’re benefitting from the online growth we’re predicting, get in touch with one of our experts today at hello@summitmedia.com. 

Written by Martin Corcoran, CEO.