Global retail in the second half of 2025: discount formats, social commerce and the long way to purchase
International research companies from Europe and North America have identified the main changes in 2025 that will continue to affect retail in the near future.
Key drivers of change
Research company Euromonitor International called Several trends are expected to be "tectonic shifts" in 2025, reshaping global retail. One is the continued growth of discount retail formats, which continue to outpace the rest of the market as economic uncertainty weighs on consumers around the world. Another factor is the continued evolution of social media platforms into important retail channels in their own right, a trend that has revolutionised e-commerce.
In turn, the marketing research team at impact.com held an industry benchmarking study in July 2025, analysing the performance of 1,554 North American brands in the first six months of this year compared to the same period in 2024. In particular, the researchers found that consumers changed their behaviour in the first half of 2025, moving to longer periods of product research and more deliberate purchases. This led to a 5% decrease in conversion rates and a 10% decrease in average order value. To adapt to this new environment, brands are diversifying their partnerships to include more commerce solutions and sales and couponing platforms, which have seen market share grow as traditional loyalty programmes shrink.
Low prices contribute to the rapid growth of discount retailers
Low prices are always important to consumers, and even more so in difficult economic times. It is not surprising that various types of discounters, warehouse clubs (retail stores that sell goods in bulk at reduced prices in exchange for a membership in a "buyers' club") and variety stores are performing particularly well, even though overall physical retail sales are declining.
In particular, discounters and warehouse clubs have a solid strategy for using the retail sector, which is very valuable for customers looking to cut costs. Accordingly, analysts predict that by the end of 2025, these sales channels will show no less growth than in 2024. These players are successfully leveraging their reputation as "everyday low prices" to attract customers beyond the traditional low-income consumer base. Experts see the discount retail segment as one of the few retail sectors that is showing positive signs in the face of growing competition from online players. At the same time, a new wave of online platforms offering extremely low prices is also making progress. In 2025, three marketplaces in particular - TikTok Shop, Temu, and Shein - are leading the way.
Social media trading gains momentum
While in the real world consumers spend more time in discount stores, in the virtual world they spend more time on social media platforms, which are increasingly becoming places not only for communication but also for shopping. Global e-commerce sales are growing rapidly, recording a CAGR of 39% at constant prices during 2019-2024. Sales are expected to grow by another 22% in 2025.
Recognising the potential of e-commerce, social media companies are making their apps more shopping-friendly. Brands and content creators on Instagram and YouTube are also increasingly using shoppable videos - just click on the link embedded in the video to buy the product.
Some platforms are evolving into full-fledged online marketplaces. TikTok and Douyin (the same for the Chinese domestic market), owned by ByteDance, are at the forefront of this trend, combining live streaming, video shopping, marketplace and s-commerce (social commerce) functions to become modern retail giants.
The transformation of retail on social media will continue, and global online sales of social commerce are forecast to grow by 21% on average over 2024-29. That is three times faster than the growth rate of e-commerce in general. It is obvious that consumers are ready to shop where they are already scrolling through social media.
As a result, the balance of power is shifting, and brands are forced not only to advertise on these platforms, but also to increasingly comply with the requirements for sellers - just like on marketplaces like Amazon. At the same time, brands need to become more efficient in their social strategies, reducing spending on platforms that are losing attention.
New buying strategies
Various researchers have noted that consumer behaviour has changed dramatically in the first half of 2025. In particular, Morgan Stanley predicts a slowdown in consumer spending growth, expecting it to decline from 5.7% in 2024 to 3.7% this year. Despite economic difficulties, including most consumers (32%) are already changing their habits, analysis by impact.com showedThe research shows that consumers are not retreating - they are researching. In the first half of 2025, consumers are moving towards longer research periods and more informed purchases. They are spending "smarter, not less" and prioritising value over volume. The longer time spent on shopping leads to lower conversion rates - by 5%.
Although the number of clicks and orders increased (by 18% and 12% respectively), total consumer spending remained almost unchanged at +0.4% year-on-year. This was driven by more purchases at lower prices rather than impulse purchases.
Due to the choice of cheaper products, the average order value (AOV) decreased by 10% year-on-year. However, the number of items in the order increased by 4%. This "strategic basket filling" shows that consumers are choosing lower-priced items to maximise value. They may do this to get free shipping, unlock package deals, or simply feel a sense of achievement by getting multiple offers in one transaction.
Four strategies for success in the new environment
Experts recommend four strategies for adapting to consumers, focusing on research and the use of long buying journeys. Don't chase traditional metrics, as last-click attribution models no longer cover the full customer journey.
Therefore, the first step is to create an omnichannel attribution method for long customer journeys. They visit multiple sites, read reviews, compare prices and wait for promotional opportunities before completing transactions. As the path to purchase is now less linear and involves more touchpoints, it is possible to adapt by emphasising value, using data to make personalised offers and diversifying your partnerships to reach cautious, value-driven shoppers at every stage of their buying journey.
For example, the increase in orders for 36% in January demonstrates that when lengthy research culminates in purchase decisions, the impact on revenue can be significant. Attribution models need to cover partners and all touchpoints that support this extended product consideration process.
Secondly, the most successful brands are building complementary partnerships that support and meet customers at different stages of their buying journey, rather than focusing investments on one type of partner. For example, in six months, the number of partnerships dominated by loyalty programmes fell from 45% to 28%, while the number of promotions and coupons partners almost doubled from 9% to 18% of total orders. This shift reflects the desire to engage consumers at every stage of the purchase funnel through different partners.
The third strategy involves adjusting key advertising activities to the periods of consumer budget redistribution. For example, the 16% decline in conversion rates from May to June in the second quarter of 2025 indicates a predictable seasonal budget allocation that creates both challenges and opportunities for timing promotions. On the other hand, the aforementioned increase in orders in January requires aggressive advertising campaigns. Understanding that the second quarter reflects research and relationship building rather than conversion failure allows marketers to optimise their strategies for different phases of consumer budget cycles.
It is also worth aligning advertising calendars with category performance models. As well as creating value messages for specific categories. For example, Health & Beauty and Sports, Leisure & Fitness show lower conversion rates and an increase in average ad spend year-on-year. In contrast, discretionary categories such as Computers and Electronics show lower conversion rates and AOVs, while Arts and Entertainment shows higher conversion rates and lower AOVs.
The trends identified by analysts are likely to accelerate in the second half of 2025. Economic pressures may persist, but consumer engagement remains strong.
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