The retail landscape is evolving at breakneck speed, with technological innovation and shifting consumer behaviour driving significant transformation. NatWest’s most recent Retail and Leisure Outlook Report has identified four powerful megatrends that will shape business success in 2025.
(Download the full report from the Retail Economics website.)
For companies like Sorted, which operate at the intersection of retail, logistics and technology, these trends present both challenges and opportunities for strategic consideration.
The evolution of customer journeys
Customer expectations have shifted dramatically, with digital and physical touchpoints merging at all stages of engagement. According to the NatWest report, online shopping will continue to dominate in 2025, with clothing (-6.7%), toys (-6.9%) and electronics (-5.9%) seeing the most significant shift away from physical stores. Only food maintains a positive in-store trend, albeit significantly lower than previous years.
As Sorted product director Paul Hill points out, this evolution raises new expectations for seamless delivery experiences, with post-purchase touchpoints becoming critical to customer satisfaction.
“Sorted’s platform addresses this by providing end-to-end delivery visibility,” he says, “including real-time tracking and predictive updates, which improve the post-purchase experience and reduce uncertainty. The platform allows retailers to provide flexible delivery options like click-and-collect, local pick-up points and scheduled slots, giving customers more control. Optimised customer communications keep shoppers informed at all stages with branded messaging, which strengthens the retailer-consumer relationship.”
Data-driven insights help businesses using advanced solutions understand delivery performance, identify pain points and fine-tune logistics strategies. This intelligence is especially valuable as physical stores evolve into experiential hubs that combine technology and human interaction – a trend that necessitates equally sophisticated delivery experiences to ensure brand consistency across all customer touchpoints.
(Our research into the science of delivery experience confirms that post-purchase touchpoints significantly impact overall customer satisfaction and loyalty.)
Leveraging technology for increased sophistication
Technology is reshaping customer interactions, with businesses reimagining how to create hyper-relevant, value-driven experiences. The NatWest study identifies five key areas for technology investment in 2025:
- digital loyalty programmes
- seamless transactions
- personalisation
- product visualisation
- and digital enhancements in physical settings.
These priorities differ across demographics, with younger consumers (18-34) placing a higher value on immersive technologies such as virtual try-ons and 360-degree tours – tools that are twice as important to under-25s as older consumers in retail.
According to Paul, Sorted’s approach to this trend is to increase the technological sophistication of logistics. “Our platform offers end-to-end tracking visibility with real-time updates, which fosters trust and increases customer satisfaction,” he says. “We assist businesses in providing delivery options that are tailored to consumer preferences and past behaviour by leveraging data analytics and developing machine learning capabilities.”
Seamless integration with ecommerce systems allows for a variety of delivery options, including same-day delivery, scheduled slots and collection points. Upcoming AI machine learning models are designed to predict delivery success rates, reduce failed deliveries and optimise last-mile logistics, resulting in cost savings and improved service levels.
Automation and workforce management
Rising costs and tight profit margins are driving businesses to automate. According to the NatWest report, 79% of businesses have planned for labour cost increases in response to the 2024 Autumn Budget and are now considering previously unfeasible automation technologies.
Adoption varies by company size: 46.7% of larger businesses (>£300m revenue) plan to implement automation by 2025, while 50.9% of smaller businesses (<£100m) are still reviewing the business case.
Businesses can address these diverse needs using scalable approaches. As our product director Paul Hill points out, Sorted optimises carrier selection and routing in real time, resulting in seamless connections between warehouse automation and delivery management. “The platform serves as an intermediary,” he says, “standardising carrier integrations while lowering manual processes and operating costs.”
Sustainability-driven consumer choices
Sustainability has evolved from a secondary concern to a strategic imperative for forward-thinking businesses. While consumer demand for eco-friendly products and services grows, many businesses struggle to meet these expectations.
According to the report, age influences sustainability decisions more than product category. Younger consumers (18-34) are consistently willing to pay more and wait longer for sustainable products across all categories. The financial outlook is also important; among consumers who expect their finances to improve significantly by 2025, 77.4% are willing to pay more for sustainable options, while only 22.7% expect a financial decline.
For logistics providers, this trend highlights the importance of developing and promoting environmentally friendly delivery methods. According to Paul Hill, this involves “sustainable carrier selection and routing, which allows businesses to choose efficient carriers and delivery methods with a lower environmental impact. For example, we collaborate with carriers to highlight green credentials like EV journey legs, which helps businesses measure and target carbon footprint reductions.”
The challenge for businesses is balancing sustainability and customer experience. The approach Paul describes demonstrates how businesses can offer greener options without sacrificing efficiency, by giving retailers tools to present sustainable delivery options at checkout while clearly communicating carbon impact. This enables consumers to make informed choices that are consistent with their values, which then carry through the fulfilment cycle.
Data-driven decision making is equally important in sustainability initiatives, as Paul explains: “Our Power BI capabilities assist businesses in tracking and visualising environmental metrics to gain actionable insights on delivery emissions, inefficiencies and areas for improvement. This allows businesses to improve their green initiatives using evidence-based strategies rather than assumptions.”
As the NatWest report suggests (and the Sorted approach confirms), sustainability is becoming an important factor in consumer behaviour and brand loyalty. Businesses that invest in sustainable logistics and adapt to changing consumer values will improve their market position in 2025 and beyond.
Discover how Sorted’s business intelligence solutions can help your company navigate these megatrends and transform delivery challenges into growth opportunities. Speak to us today.