If you operate a retail business or are considering getting into the industry, you don’t need to be told that the space has changed dramatically over the past few years. The pandemic’s impacts on in-person retail, the concentration of market share among a handful of e-commerce platforms, and the corresponding fragmentation of social commerce are just a few of the trends shaping retail’s fortunes for better or worse.
Experienced retail- investors like Steve Streit, who have helped several next-generation retail companies scale their operations in a rapidly changing industry, acknowledge the industry’s recent challenges while painting a surprisingly optimistic picture of future opportunities for retail entrepreneurs willing to try new things.
“All industries face unprecedented disruption as consumer behaviors evolve and artificial intelligence accelerates innovation, but it appears retail has seen more changes than most,” Streit says. “That’s both a challenge and an opportunity for retail businesses and beyond.”
Let’s take a closer look at the six trends Streit and others expect to possibly shape the retail industry in 2025 and perhaps beyond.
- Social and “Network” Commerce
Social commerce reached an estimated 25% penetration rate in 2024. That makes it clear, if it wasn’t already, that social commerce is for real — not just a passing fad.
Social commerce is driven by the rise of micro- and nanoinfluencers as well as larger brands adding social channels to drive opportunistic (read: impulse) buying. It’s both more convenient and higher-trust than “traditional” e-commerce platforms, which depend more on inbound traffic and less on captive social audiences.
Related to the rise of social commerce is the evolution of “network” commerce, which builds upon (and digitizes) the old-school multi-level marketing model. This niche is particularly ripe for growth as shoppers become more overwhelmed by digital demands on their attention.
- Hybrid Shopping and In-Store Experiences
Like social commerce, hybrid shopping is quickly going mainstream. About 11% of shoppers reported using their smartphones while shopping in-store on a regular basis in 2024, double the share from 2023, according to 1WorldSync. More than half reported using smartphones on every shopping trip.
Brick-and-mortar retailers would do well to lean into this fast-growing trend in 2025 and beyond. Retailers can further stand out by augmenting the hybrid shopping model with in-store experiences and exclusives that get people in the door and in the mood to spend.
- Pop-Up Retail and “Residencies”
Smaller and emerging retailers increasingly see pop-up stores and “residencies” at complementary businesses (food halls, destination breweries and distilleries, and other physical locations with captive audiences) as beneficial to their businesses.
“The primary reasons for activating pop-up shops were to create connections with current and potential customers, to increase brand awareness, to introduce a new product or brand to the marketplace, and to stage a new product or brand,” write retail researchers Mark Rosenbaum,
Karen Edwards, and Germán Contreras Ramirez.
This model has benefits for host businesses looking to increase average customer stays or fill underutilized storefronts, as well.
- Seasonal Markets
Seasonal markets offer some of the same benefits as pop-up retail and retail residencies, with an added positive twist: better merchant pricing power.
“Businesses can maximize profits by capitalizing on customers’ willingness to pay more during peak times and bringing in more business when demand is low,” writes Megan Doyle of American Express.
Real-world seasonal markets have limited scaling potential; customers and retailers have to seek them out, and there’s only so much demand for holiday-themed items. However, digitized versions of seasonal markets have existed for years — witness the Cyber Monday phenomenon — and new hybrid or all-digital models could unlock value for a wider variety of brands here.
- Hyperpersonalized Marketing
Rapid advances in marketing and customer-targeting technology, assisted (of course) by improved AI models, could soon usher in a new golden age of personalized marketing. We see the early signs of this in advanced social commerce platforms (especially on TikTok and Instagram), but we’re only just scratching the surface; there’s much more to come.
- Circular Retail
Consumers’ emerging environmental awareness sparked a “sustainable shopping” boom in the 2010s — see ThredUp and other second-life fashion outlets — that has continued in lower-key fashion up to the present. As “circular economy” technology improves and the idea of reusing or upcycling durable goods gains traction beyond early adopters, this will be an important retail growth sector to watch.
A Bright Future for Retail?
It’s tempting to size up all the challenges facing the retail industry and ask, “Why bother?” Yet that attitude misses the forest for the trees.
Steve Streit and other retail experts believe that embedded in the present moment of disruption is potentially an unprecedented opportunity to take advantage of the industry’s emerging “new normal.” Seizing this moment won’t be easy for incumbent businesses accustomed to doing things a certain way, nor will it be straightforward for disruptors to, well, disrupt.
But make no mistake: It will lead to amazing success for a group of ambitious, driven retail entrepreneurs. It’s time to claim your place among them.