Written by Ash White, Managing Partner, Commerce Strategy
Evolve your retail marketing strategy: Take advantage of shifting consumer sentiment
The UK retail landscape is evolving rapidly as economic concerns, shifting digital behaviours, and generational differences reshape how people shop. Dentsu’s EMEA Consumer Navigator – Q1 2025 survey reveals that while consumers remain cautious with their spending, they are increasingly embracing digital commerce, particularly via social media.
For retail marketers, understanding these trends is essential to staying ahead. With social commerce accelerating, spending habits shifting, and brand trust becoming more complex, the next 12 months will require a strategic approach to customer engagement.
The rise of social commerce in the UK
Retailers can no longer afford to overlook social media as a sales channel. One in five UK consumers plans to make a retail purchase through social platforms in 2025, with Gen Z leading the charge: 37% expect to buy products directly via social media.
This shift aligns with the predictions outlined in our recent report, The Year of Impact: 2025 Media Trends, which explores how we are entering an “algorithmic era” where media is becoming 100% addressable, shoppable, and accountable. The report highlights how AI-driven personalisation and short-form content are playing a crucial role in shaping purchasing behaviour. For retail marketers, this means ensuring that content is optimised for discovery and transaction on social platforms, using AI-driven recommendations and creator partnerships to drive engagement.
Economic pressure is reshaping spending habits
Consumer confidence has taken a hit, with the EMEA Consumer Navigator research revealing that 80% of people believe the UK economy is in poor or terrible shape. As a result, spending on discretionary items such as beauty, fashion, and luxury goods has slowed. In contrast, grocery purchases are increasing, with 63% of shoppers reporting higher food spending. Interestingly, despite economic anxiety, many consumers are still seeking affordable indulgences, with spending on fast food and dining out rising.
In this environment, CMOs must balance short-term performance with long-term brand growth. As revealed in our CMO Navigator – Media Edition, marketing leaders are increasingly investing in AI, digital experience, and loyalty programmes to retain customers amid shifting spending habits. For retailers, this means refining pricing strategies, offering flexible payment options, and ensuring loyalty schemes provide tangible, personalised benefits that keep customers engaged even in financially uncertain times.
Brand trust and values: what matters most to consumers?
Retailers often assume that loyalty programmes and brand heritage automatically inspire trust. However, our data suggests a more nuanced reality. Gen Z, in particular, values brand ethics (18% stating this is a factor in their brand choice, vs. 8% of Boomers) and sustainability (25% Gen Z vs. 7% Boomers state it’s a factor in brand choice) over traditional loyalty schemes.
This generational shift in priorities is a key theme in our look ahead to the future, Consumer Vision 2035, which predicts that by the next decade, brands will need to pivot from reactive insights to proactive foresight, developing AI-powered personalisation and sustainability-driven experiences to meet consumer expectations. As Gen Z and Millennials continue to shape the market, retailers must move beyond transactional loyalty and embrace a purpose-driven brand strategy that aligns with their audience’s values. This means clear communication of sustainability efforts, ethical sourcing, and authentic storytelling that resonates across digital and in-store touchpoints.
The digital experience remains a key differentiator
While social commerce is growing, traditional websites and apps still play a crucial role in retail. Interestingly, our EMEA Consumer Navigator survey found that website usability is a bigger priority for financial services (31%) than for retail (22%). However, with mobile-first consumers now dominating purchasing behaviours, digital experience remains a make-or-break factor in retail success.
As outlined in The CMO Navigator – CX Edition, CMOs are accelerating digital transformation efforts, particularly in AI-powered customer experience and omnichannel strategies. This latter report highlights that while brands have made significant progress in commerce strategy, the real challenge lies in ensuring seamless online and offline integration. For retail marketers, this means investing in frictionless digital journeys, using AI for hyper-personalised product recommendations, and ensuring mobile and app-based shopping experiences are intuitive and efficient.
How retailers should prepare to meet the challenges ahead
Retail marketing in 2025 will be shaped by three core trends: the continued rise of social commerce, the impact of economic uncertainty on spending habits, and the growing importance of brand values in consumer decision-making. To stay ahead, brands must take a proactive approach.
Retail media will become a key driver of engagement, with brands needing to rethink how they leverage AI, automation, and real-time optimisation. (Take a look at how dentsu can help you with your brand’s retail media journey here.) Meanwhile, Consumer Vision 2035 reinforces that anticipation will be key – brands that can predict and act on consumer needs before they arise will gain long-term loyalty.
By refining digital experiences, strengthening purpose-driven marketing, and adopting seamless omnichannel strategies fuelled by the right martech stack, retailers can navigate the shifting landscape successfully. While traditional loyalty models may still appeal to older demographics, younger consumers demand more personal, ethical, and digital-first experiences. Authenticity, sustainability, and AI-driven engagement will define the next era of retail success.
To explore these insights in full, access the EMEA Consumer Navigator report here or contact the dentsu team to discuss how these insights can shape your brand’s strategy.