The figures are in for the crucial Christmas season – so how did it pan out? And what’s on the horizon for industry business and talent trends in 2025? Our Retail & Consumer Goods Lead, Mark Collins, reports
Happy new year! I hope this finds you refreshed and ready to take on everything 2025 has to offer. It feels like ages ago since I was eating mince pies and watching old films on the sofa – but now the December dust has settled and we’re well and truly into January, I thought it would be a good time to reflect on the most important period of year for retailers: Christmas.
They don’t call Q4 ‘the Golden Quarter’ for nothing. How businesses fare in the final stretch of the year can have massive implications for P&L sheets, planning, and hiring alike. Christmas sales efforts often revolve around strategies that have effectively become as much a part of our calendar as carol singing and nativity plays. Just a few of these include:
Holiday sales and promotions
Ramped-up discounts leading up to Christmas, such as ’12 Days of Deals’ events or Amazon’s ‘Lightning’ offers throughout the month.
E-commerce
Cyber Monday ushers in a seasonal spike in online shopping, with many retailers extending same-day delivery options to meet demand.
· Gift guides
Businesses may produce curated gift guides tailored to different demographics. One example is Sephora’s beauty gift sets targeted at various price points.
In-store experiences
Stores may wish to enhance their physical shopping with festive décor, live music, and/or interactive displays. Just think of Harrods’ Christmas windows!
Last-minute shopping
We’ve all been there! It’s never pleasant trying to find a suitable gift just before Christmas, but retailers often bank on a late rush by extending opening hours and/or delivery options.
Returns
But what do you do if the present isn’t right after all? Retailers prepare for a wave of returns every year, in many cases increasing their windows and – as in the case of Kohl’s and Amazon – even partnering with other companies for seamless delivery back to the warehouse or shop.
The UK picture for retail in the Golden Quarter 2024
So, in tricky times like these, are consumers tightening their belts, or splashing out to treat themselves? Well, the results are in – and, in the UK at least, it makes for mixed reading. In the British Retail Consortium’s recent report about the Golden Quarter, CEO Helen Dickinson suggests that the modest boost retailers received last month were not enough to make up for weakened consumer confidence across 2024.
However, food sales fared better over the festive period than in 2023, up by 3.3% for the year as a whole. Lidl, for one, reported their most successful festive season yet, while it was also a happy Christmas for Tesco, Sainsbury’s, and Morrisons, all of whom reported increased market shares (with drops for Asda and the Co-op). Beauty products, jewellery, and electricals also represented strong sales figures; Black Friday falling so close to Christmas helped to deliver a welcome boost to retailers across digital and beauty offerings alike, notes KPMG’s UK Head of Consumer, Retail & Leisure, Linda Ellett.
Still, growth for the final quarter of 2024 overall, at 3.2%, represented an increase of just 0.4% on the previous year’s figure. Sarah Bradbury, IGD CEO, notes that while Christmas typically leads to a booster in consumer confidence, ‘with the economic outlook for 2025 remaining relatively weak’ against a backdrop of increasing bills, such behaviour may well be short-lived.
The report further notes that while sales growth in UK retail might average 1.2% for 2025, that’s still below the projected shop price inflation rate of 1.8% – and before we take into account the further pressure that planned rises in National Insurance and living wage, as well as packaging levies will put on retailers. How this bears out remains to be seen, though it is likely that we will see some organisations trying to cope in different ways, whether through pay freezes, reducing headcount, or increasing prices.
What should retailers focus on for 2025?
So, is it all doom and gloom for the industry this year? Not necessarily. It’s always difficult to predict just what is on the horizon when things in the retail and consumer goods sector move so quickly – but what businesses can always do is analyse current trends to get a sense of how and if they can boost their offerings this year. That might mean a new hire or two – so if you’re a professional in the retail and consumer goods space, be sure to keep an eye out for new opportunities and ways to add to your toolkit!
Based on current trajectories, some retail trends I think we will see this year will skew heavily towards leveraging AI and data in areas including:
Hyper-personalisation
It feels like I’ve been talking about retailers leveraging AI and big data for ages – but this development in the shopping landscape isn’t going away. Businesses are likely to boost their AI infrastructure to provide personalised shopping experiences to past customers based on existing shopping habits, as well as use such data to attract new ones. Candidates with the data skillset to put these visions into practice should have plenty of offers!
Augmented reality (AR) shopping
We’ve heard of virtual reality (VR) – so what’s AR, and how does it affect retail? Apps that allow customers to virtually try on clothes, or visualise furniture and fittings in their homes before buying, will only become more common. After all, seeing how that IKEA Pax wardrobe will look in your bedroom through the company’s dedicated Place app is much quicker – and cheaper – than installing it first and then finding out! AR is another area where tech talent is in demand.
Sustainability as standard
The trend towards sustainable products shows no sign of abating; consumers want to know that companies are using environmentally sound methods to produce, package, and sell their wares. Brands like Uniqlo and the H&M group are experimenting with recycling programmes, which shall hopefully become the norm across the fashion sector soon. (For more advice on hiring sustainability professionals, look no further than Venari Partners Principal, Alex Hyde.)
Social commerce growth
Those ads for brands you like that pop up on your Instagram aren’t there by accident. Increasingly, we are seeing social media platforms enhancing shopping capabilities for brands, allowing users to buy directly through the app interface. I think it’s safe to say that we’ll see more brands launching exclusive products and promotions tied to social media companies and trends. An area for UX, web design, and marketing talent alike!
Enhanced in-store technology
It might seem like the stuff of science fiction, but integrated technology like smart mirrors that allow virtual outfit combinations – similar to my previous point about AR apps – is likely to become a feature of bricks-and-mortar retail, too. Who’d have thought it?
Subscription models
This will no longer be something just for niche markets. Retail subscription services should see an uptick in 2025, with businesses using data to personalise their offerings with larger brands attached.
Health and wellness
Along with sustainability, this is another trend that seems to be here to stay. Consumers are increasingly prioritising their wellbeing, so retailers will be looking for more ways to stay relevant. Expect more products that promote physical and mental health, whether it’s meal kits, integrated nutrition tracking apps, or apps that seek to reduce anxiety and boost productivity. This is another area where candidates with strong data science backgrounds can really stand out.
Looking ahead
So, how will the Golden Quarter 2025 look? Will we see robot shoppers, virtual checkouts, and all sorts of other high-tech developments that would have seemed far-fetched just a few years ago? I wouldn’t go that far – but you’ll have to ask me this time next year before we know for sure.
What is certain is that we’re in for another interesting year in the retail and consumer goods space. I’m thrilled to have some exciting projects on the horizon – but of course, I’m always keen to hear from companies that want expert advice on boosting their executive leadership talent, as well as candidates in the space who might want a new challenge, and consultancy candidates who fancy a pop at a role in industry. If any of these sounds like you, please just drop me a line!