The retail industry had an eventful year in 2024, with a combination of tight vacancies and bankruptcies. Despite this, consumers were faced with high prices and economic uncertainty, leading to a mixed shopping experience.
Placer.ai’s recent whitepaper titled “Retail Trends to Watch in 2025” delved into the significant trends seen in the retail sector during 2024 that could shape the future of retail in 2025. The key findings from this report are as follows:
Discounters Reaching Their Limit
Dollar stores and discount retailers have benefited from economic volatility but may need to make adjustments due to slowing foot traffic. According to Placer.ai analysts, this presents an opportunity for these chains to rethink their offerings and operations.
Quality and Value Remain Key Factors
Consumers continue seeking bargains without compromising on quality. Retailers who offer affordable specialty products or unique experiences see higher foot traffic as a result. Trader Joe’s was highlighted for its constantly evolving private-label mix while Chili’s was praised for offering full-service restaurant experiences at fast-food prices.
Convenience is Still Important…to Some Extent
Shoppers are making shorter trips when grocery shopping but are willing to travel further for specialty items. On the other hand, restaurants that utilize technology like Chipotle’s avocado-peeling robot or McDonald’s automated restaurants attract more customers looking for quick service options.
Smaller Formats & Markets Gain Popularity
Retail giants like Macy’s are introducing smaller store layouts aimed at increasing weekday visits within local communities while home improvement brands such as Harbor Freight Tools cater towards smaller-growth markets by opening fewer square feet locations.
Legacy Brands Make A Comeback
Popular legacy brands from previous decades such as Gap, Abercrombie & Fitch,and Anthropologie appear poised for success after going through periods of decline during the early-2000s until now – indicating potential growth opportunities moving forward into next year (and beyond).
Millennials Remain A Key Demographic
Despite growing older, Placer.ai analysts believe millennials remain a highly sought-after demographic for retailers. As a result, chains like Sam’s Club and Taco Bell are offering age-specific and nostalgic products/services to appeal to this generation of consumers.
