See the big picture
Given recent events, I expect 2025 to offer its fair share of surprises, although I’m hopeful we’ll see a steady increase in consumer confidence and spending. Retailers’ resilience and lessons learned regarding stock management should lead to stronger margins and extended planning horizons.
Head of Retail and Wholesale, Barclays Corporate Banking
As we enter 2025, we do so with relatively fragile consumer confidence. Whilst 74% consumers are confident they can live within their means each month, 86% remain concerned about inflation and 62% about potential interest rate rises1. This could improve over the course of the year provided the macroeconomic backdrop remains stable, and people become more confident with their discretionary spend.
However, while we may see an increase in confidence (and consumers more willing to commit to larger purchases), I think we’re also going to see the continued rise of the ‘conscious consumer’ – more inclined to do their research, shop around, be selective, and find the best deals. As a result, retailers will need to ensure that not only are their products as visible and appealing as possible, the store experience has to be excellent (whether in person or online) and they also have the necessary stock to hand to deliver at the right times.
Streamlining success
Many retailers will of course have to manage the recent increases to business taxation, making efforts to drive operational efficiencies and cost savings more important than ever. This means continuing to explore how they can best deploy technology to automate back-office processes, enhance data-driven decision making, and support marketing efforts through targeted promotions and hyper-personalisation. AI’s capabilities have grown immensely over 2024, so the possibilities for 2025 are exciting as retailers explore how it can support providing curated tailored shopping experiences.
Many of the retail and wholesale businesses I talk to say they plan to continue to shore-up their supply chains and stock delivery processes to mitigate ongoing geopolitical risks. Businesses are also increasingly auditing their suppliers to ensure they can demonstrate that products are being manufactured responsibly and that their supply chain reflects their own sustainability commitments and stakeholders’ expectations.
To manage some of the risks and costs associated with new investments and solutions, retailers are increasingly exploring the options of partnering with specialists for certain aspects of their operations. For example, several of my larger clients have partnered with logistics experts in order to support their distribution capabilities and ensure that their ecommerce fulfilment is both sustainable and cost effective whilst also providing a quality consumer experience.
We’re seeing the increased adoption of ‘unified commerce’ technology solutions to help deliver customer-centric retail and drive efficiencies. These platforms are becoming vital in consolidating all front and back-end data and systems to create an integrated, measurable and seamless experience.
Head of Retail and Wholesale, Barclays Corporate Banking
Guarding against cyberthreats
Cybercrime continues to evolve rapidly, and retailers and their customers are of course often prime targets. So it’s perhaps unsurprising that our recent research on retail resilience highlighted cyber and data security risks as a priority concern for retailers. Encouragingly, despite the ever-increasing number of sophisticated attacks, a majority of the retailers surveyed said they feel as prepared as they can be, given the rate at which cybercrime is evolving.
Cyberattacks can of course have a catastrophic effect on retailers’ trading capabilities, so businesses should remain on high alert to this risk and develop a sound cyber response plan, provide fraud training for employees, keep systems and digital tools updated, and continuously test for threats. Retailers should also ensure they protect themselves against the potential risks associated with their third-party suppliers and partnerships.
Retailers should do everything they can to better understand their customers and promote footfall to their stores and websites. Leveraging data effectively could be key to driving growth.
When employed correctly, technology can help to drive efficiencies and cost-savings. Retailers may also want to weigh up how technology partnerships could support growth, in part by enabling capital investment to be reassigned in other priority areas.
As Gen Z matures, their increasing spending power and influence are expected to reshape retail operations. Businesses should take the time now to understand this generation’s unique shopping behaviours and expectations.
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1 December Consumer Spend Report: https://www.barclayscorporate.com/insights/industry-expertise/uk-consumer-spending-report/#RW
Keeping fraud front of mind
Fraudsters are as active as ever across the retail and wholesale sector, impersonating our colleagues and attempting to defraud our clients. To help protect you and your business we have a wealth of resources available. You can view our quarterly fraud webinars and take a look at our other educational resources on our Fraud Protection Hub.
To discuss your business requirements and how Barclays can support you, contact us today.
