The retail industry is buzzing with change, and dentsu’s consumer sentiment report, Read the Room: Pursuing Happiness, highlights a new wave of emerging consumer attitudes and retail trends that brands must consider to stay ahead of the curve. As we move into Q4, traditionally a golden quarter for retail, and look ahead to 2025, what factors will position your brand for success?
Our research surveyed 2,000 UK consumers on their financial wellbeing and attitudes to spending. It shows that, overall, consumers are more confident about the future this year in relation to finances. However, economic concerns remain a top priority – meaning shoppers are conducting more research before making a purchase. So, what does this mean for retail brands and the future of retail?
Changing Spending Habits: Understanding the Wider Context
The crux of Read the Room’s findings is the changing spending habits of younger generations; they are prioritising experiences, personal messaging, and authenticity over price. When retail shopping, they are supporting brands that align with their values, despite their unstable economic situations. These new behaviours are pushing brands to get closer to their consumers – pressuring them to proactively discover new ways to create demand and unlock value. With 70% of Gen Z stating that they are looking for brands to demonstrate emotional intelligence and understanding in their advertising, it’s never been more important for retail brands to show they are working to meet their customers' needs.
A Purpose-Driven Future
To stay ahead of current retail industry trends, it’s crucial that brands understand their customer base. Our Read the Room report highlights that consumers are increasingly researching and making more considered choices, based on factors such as social impact. As they progressively abandon one-size-fits-all relationships with brands, we are now entering an era of interrogation and discernment from consumers.
The search for brand purpose, particularly within the retail sector, appears strongest among younger demographics – Millennials and Gen Z – with more than a quarter preferring to buy from brands with a strong purpose. Therefore, communicating your brand’s purpose clearly and in a differentiated manner will be the way forward.
Using Storytelling as a Tactic to Appeal to Consumers
So, how do retail brands stand out? Our research makes it clear that Gen Z is willing to put their money where their mouth is. They don’t want to engage with corporate, empty branding; they want to emotionally connect with brands they shop from, and what better way to do this than through storytelling?
Communicating your brand’s purpose beyond profit and connecting with customers across all aspects of your business – from product development to marketing strategies – will be key to success. Telling your story in a way that aligns with your customers’ values and beliefs, ensuring that the narrative is consistent and authentic across all platforms, will set you apart. Consumers can spot insincerity from a mile away. So being genuine when communicating your brand’s mission and journey will allow you to connect authentically with your audience. Acknowledging areas for improvement and showcasing your brand’s journey will build a community around your brand’s values, fostering a sense of belonging and trust among consumers.
So, what should retail brands do next?
Our research demonstrates a clear need for authenticity within the retail sector. A key aspect of consumer trends in 2024 is that Gen Z takes brand purpose and societal good more seriously than any previous generation. As they represent the future, addressing their motivations and preferences will be essential to steering your brand towards growth. Some key takeaways from our research include:
- Defining your purpose as a brand: How can you align your brand’s purpose with your customers’ values? Communicate your purpose authentically across all channels and don’t deviate from it when times are tough – customers have long memories.
- Gen Z places high importance on ethics and sustainability: How can you integrate your main societal initiatives into your brand’s purpose? Take tangible steps towards sustainability and environmental conservation, and actively share your progress with your audience.
- Transparent and honest communication is essential: Are your communications aligned across all platforms? Being truthful about your brand’s journey, and highlighting areas for improvement, will help build a community around your brand’s values, fostering loyalty and advocacy among customers.
You can download the full Read the Room report here to learn more about the future of retail and the importance of brand experience, customer personalisation, and societal purpose in the retail industry.
If you’d like to discover more about how your brand can thrive and stay ahead of retail trends, get in touch. For more insights, check out our blog and our latest thinking.