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The shopping experience is being redefined in 2025.
The boutique on your local high street, the shoppable post in your Instagram feed, and the marketing email directing you to an online store may seem unrelated, but they could all connect to the same retailer.The retail industry is reshaping not only how we shop and sell, but also where we shop and what we buy.
Square teamed up with Bredin to survey 2,000 retail owners and 4,000 consumers in the US, Canada, the UK and Australia. What we found was eye-opening – the who, what, where and why behind our shopping experience is going through a metamorphosis. Savvy retailers are beating out competition by harnessing digital tools to streamline operations and improve not only customer experience, but also employee satisfaction,. The lines between verticals are blurring, and a seamless omnichannel experience is more important than ever before.
To identify the top retail trends for British businesses to explore this year, we analysed the UK survey results, insights from the Square retail team, and interviews with creative retailers leading the charge. All data cited below comes from the survey results. For a more in-depth look at these 2025 retail industry trends, download the full 2025 Future of Retail report.
Retailers are using more technology than you think – and it’s paying off
UK retailers are leaning into innovation, adopting new technologies to free up staff and boost efficiency. Roughly a third of UK retailers we surveyed are using five different types of advanced technology integrations (from inventory management software to automated email campaigns to even generative AI to write copy) to save time and improve business processes.
Retail leaders recognise the transformative potential of technology, predicting that it will make the most improvement to their marketing (71%), inventory management (70%), and reporting (66%) over the next 12 months. And they’re open to experimentation: at least 76% of UK respondents said they wanted to invest in each of the 12 overarching business technology areas we asked about. This includes building better products, improved communication, and real-time inventory tracking to improve performance.
While the possibilities are seemingly endless, they can also be intimidating. To avoid overwhelm, focus on the short term. First, identify the pain points in your business that technology could alleviate. Does writing and optimising product descriptions slow down the launch of new products on your website? If so, try using AI to auto-generate SEO-friendly copy. Second, pinpoint the areas that will provide ROI the quickest. Consider starting with marketing and inventory management, which retailers cited most as saving them time (41% and 40%, respectively).
Retail leaders think new and alternative paths to revenue are important, but they need to start acting on it
Speaking to retailers up and down the UK, we’ve found there’s a gap between awareness and action. The majority (69%) of retailers know that finding new revenue streams is essential to long-term growth but they’re not acting on that belief – yet. Less than one-third of those same retailers have introduced new lines of business by holding events (29%), adding memberships or a club offering (22%), or adding new products and services (19%) in the last year.
To spur you into action, take a look beyond the balance sheet and consider the powerful halo effect of adding a new revenue stream. Providing additional offerings – especially subscriptions or exclusive events – can help you grow and retain your customer base, locking in recurring revenue through your new initiative while setting yourself apart from the competition.
Get started with a SWOT analysis: take an objective look at your business within its competitive environment to help you carve out your niche. When you’re ready to add those new revenue streams, make sure your payment platform can support you. With Square Subscriptions, you can build and manage subscription plans right from your Square Dashboard.
Retailers have to get creative to get hesitant consumers spending in 2025
UK consumers have had a bumpy ride in the last few years, and over half of those we spoke to said they’ve cut spending on retail purchases in the last 12 months. This trend looks set to continue as consumer confidence dropped sharply in January. So how can retailers grow revenue in this climate? Seventy-three percent of retail leaders are already on the case, having increased their marketing and promotional efforts as a result of inflation, wage or price pressures.
To win back consumers – and their wallets – it’s time for retailers to get creative. Beyond short-term pricing tactics, think about how to create a brand that’s loveable and drives loyalty. Seventy-eight percent of retail leaders believe that in-store experiences will be critical to future success. Gather your team for a brainstorming session: what can you do to give your customers an interactive, immersive and memorable experience when they step inside your store?
It’s also important to take the time to understand how your customers’ needs are changing. For example, are you offering a variety of payment options to make it easy for them to decide to buy? One option is to offer buy now, pay later (BNPL) at checkout. Seventy-one percent of the retail leaders we surveyed whose stores offer BNPL have seen an increase in BNPL purchases over the last 12 months. As consumers get more comfortable paying for purchases in instalments, they will increasingly expect it to be an option.
Balancing brick-and-mortar quality and online convenience will be key
Think bricks-and-mortar stores are past their prime? Think again. Despite our digital obsession, most sales are still made in person, and consumers crave experiences they can’t get from a screen. That’s why 78% of retail leaders told us they see in-store experiences as crucial for business growth, with 33% planning to amp up their experiential offerings to keep pace with competitors.
Modern retail success hinges on seamless omnichannel marketing – connecting in-store and online experiences to extend brand reach and build customer loyalty. This looks different for every retailer: perhaps a customer taps ‘buy’ on a shoppable TikTok post and then returns an item in person, or maybe they browse in-store and then order an out-of-stock product for home delivery.
The seamless shopping experience is working well, with customers reporting high satisfaction levels (82% in-store and 83% online). While retail giants have the budgets to constantly raise the bar, smaller retailers must enhance both their in-store experiences and online convenience to remain competitive. This is where a POS like Square for Retail comes in. It connects all your online and in-person touchpoints, simplifying inventory management and keeping all sales data in one place.
Personalisation and alerts efforts aren’t annoying – in fact, they’re vital
Savvy shoppers are wary about sharing their data with businesses. However, our research shows that nearly three-quarters of consumers are fine with their data being used as long as it improves their experience.
That means sending them tailored communications showing that you understand their needs. When presented with multiple options, 67% of consumers said they want personalised shopping experiences informed by past purchases, as well as alerts and notifications (65%) and invitations to exclusive events (61%).
If you want to personalise your relationships with your customers, you’ll need a loyalty programme that allows you to responsibly collect and act on customer data. Retail leaders with an established loyalty or rewards programme are seeing results: 82% said it drives repeat visits and 70% plan to invest even more in their programmes this year. To get on board, try Square Loyalty: you can generate repeat sales with a customer rewards programme that integrates seamlessly with Square email messaging capabilities.
Retailers need to rethink hiring for the long term
It’s no secret that hiring in the retail sector has been a challenge over recent years. So retailers are breathing a sigh of relief that it’s finally become a little easier. However, it seems there’s still work to do to retain and progress talent within the industry. We asked retail leaders about 12 retention initiatives, and none were used by more than 38% of respondents. This leaves the majority at risk of employee churn, with implications on costs, productivity and morale.
Diving into the data, we can see that retailers could do more to nurture junior talent. Only 23% of those surveyed are creating mentor relationships and just 30% say they’re establishing career paths for employees. It’s time for retailers to take the long view: investing in retaining talent will keep local and institutional knowledge on hand longer, which helps to develop deeper relationships with their customer base.
If you’re ready to improve the employee experience and increase retention, start with the simple things. Talk to your employees about their jobs: find out their daily bugbears and think about which technology or process changes could make things easier. Make sure the basics of scheduling and shift management are covered. Choose an employee scheduling tool that empowers your team: with Square Shifts staff can manage their schedules, request time off, swap shifts, and get paid accurately and on time. This helps you create a positive experience for every member of staff, adding up to a strong and steadfast team.
Retailers are actively investing in the future
This year, retailers have an opportunity to map out the future for their businesses. And they’re approaching it with an overwhelmingly positive mindset: 75% told us they’re feeling more optimistic about their businesses than they were 12 months ago. There are three key areas where retail leaders are focusing their energies and increasing their investments: growing their online store presence (72%), strengthening their loyalty programmes (70%) and increasing the number of products and services they offer (70%).
There are plenty of reasons to feel confident. Retailers can already see how technology supports employees’ efforts on the sales floor, streamlining operations and creating an improved experience for everyone. They’re also noticing their relationships with customers growing deeper. As consumers become increasingly comfortable with data sharing and the personalisation it affords, retail brands are able to serve them better and foster loyalty.
While the economic downturn of the last two years has been difficult, the industry has proved its resilience. Retailers of all sizes are entering 2025 with some runway to design their ideal futures, and to start implementing the changes that will supercharge their businesses this year and beyond.
Want more insights on how retail leaders are innovating in 2025? Get a deeper look into these popular trends in our 2025 edition of the Future of Retail report.
