Understanding how to navigate these trends is key for retailers looking to connect with shoppers in a meaningful way and drive success this season. In this article, we’ll dive into key consumer insights and explore how these shifts are shaping the summer retail landscape.
The shift toward budget-conscious spending
One of the most significant consumer behaviors impacting retail is the rise of
trade-down behavior. Trading down is defined as consumers opting for less expensive alternatives to their usual purchases - a notable local example: the shift of consumer behavior to buying their groceries
across the border or from discount supermarkets. Recent data reveals that
three-quarters of European consumers reported adjusting their spending habits by opting for lower-priced products compared to previous quarters. As inflation continues to weigh on household budgets, many shoppers are choosing to buy less and seek more affordable alternatives.
However, it's important to note that consumers are not just opting for lower prices but are also actively avoiding brands that do not align with their values. In fact, a report from Deloitte highlights that 30% of consumers have stopped purchasing certain brands or products due to ethical or sustainability-related concerns, showing a shift in spending habits that goes beyond just price. Consumers are increasingly prioritizing ethics, sustainability, and corporate responsibility when choosing where to spend their money.
What this means for retailers:
- Focus on value: While consumers are prioritizing value, they’re also looking for brands with integrity. Price alone isn't enough to attract today’s shopper. Retailers must balance cost-effectiveness with ethical business practices, ensuring that the products they sell reflect both quality and sustainability. How can you do this? Opt for products with a prominent brand story or brand values on their packaging, making it easier for consumers to identify brands embodying a strong CSR.
- Product diversification: Offering a range of price points ensures that brands can cater to both budget-conscious shoppers and those willing to spend a bit more on high-quality, ethical products. For example, offering premium organic products alongside affordable, eco-friendly alternatives gives consumers more choice without sacrificing their ethical standards.
- Promotions and loyalty rewards: Time-sensitive promotions like flash sales or exclusive discounts appeal to price-conscious consumers. Loyalty programs that offset higher-value purchases can also help retain customers by increasing the perceived switching costs while also having the opportunity to recoup their expenditure.
The sustainability wave: eco-conscious consumers
Sustainability continues to be a major factor in European consumer decisions, with consumers seeking products that align with their values and contribute positively to the environment. Upcycled products, refillable items, and reusable goods are gaining traction, especially in categories like beauty, home goods, and fashion. According to research conducted by PwC, consumers are willing to pay almost 10% more for sustainable products, reflecting their growing interest in making ethical purchases that reduce their environmental impact.
Why consumers are willing to pay more:
This shift is partly driven by the growing recognition that cheap products often come at a greater environmental cost. Consumers are increasingly aware of the long-term consequences of their buying habits - whether it's the effect of plastic waste or the carbon footprint of fast fashion. Sustainability is no longer just a “nice-to-have” attribute; it's a key factor in many purchasing decisions. Younger shoppers, especially millennials and Gen Z, are willing to spend a bit more on items that align with their eco-conscious values, knowing they’re investing in a product that’s made responsibly and contributes to positive change.
For example, eco-friendly packaging has become a major consumer demand, and many brands are switching from plastic to biodegradable or recyclable materials to appeal to this audience. Refillable products are another key component of this trend. These products reduce single-use waste and align with consumer values around reducing plastic consumption.
What this means for retailers:
- Eco-friendly product offerings: Other than ensuring that your assortment comprises eco-friendly offerings, think about how you can appeal to eco-conscious considerations across the supply chain. For example, offering repairs and returns of old merchandise that can then be upcycled or disposed of responsibly helps consumers to feel like they are taking an active part in recycling waste. You can also help consumers to become active participants in the waste lifecycle with donation schemes for returned merchandise, increasing the value of your services beyond the expected minimum. Want inspiration? See how IKEA, Adidas and Burger King successfully invested in the circular economy.
- Transparency matters: Consumers are becoming more conscious of a brand's environmental footprint. Brands that openly share their sustainability practices, such as how their products are made or their efforts to reduce carbon emissions, will gain more trust and credibility.
Wellness and self-care: the new priority for summer 2025
Wellness and self-care have become dominant consumer priorities, with 28% of people consistently making efforts to lead healthier lives. This growing trend encompasses both physical and mental well-being, leading to the rise of holistic wellness-focused products. Consumers are no longer just looking for products that benefit their physical health; they’re also seeking items that promote mental clarity, stress relief and emotional balance.
With ongoing challenges like economic instability, climate change and global health crises, many consumers are prioritizing mental health in addition to physical health to help them navigate their daily lives. This growing focus on mental wellness is reflected in the rising popularity of mindfulness tools & apps, aromatherapy, affirmation journals and other stress-relief aids.
What does this mean for retailers?
- Highlight wellness collections: Whatever your retail category, you can group wellness products into their own collection that you highlight in your store, whether it’s sports apparel, calming teas, aromatherapy diffusers or Montessori toys. Consumers are already quite well-educated on the different wellness methods and by having visual or textual cues in-store, you can help them pick out the products that are most top of mind for them.
For example, in the world of baby care, parents are increasingly turning towards more hands-on approaches when it comes to nurturing for their children, with ideologies like Kangaroo Care, Responsive Parenting, Tactile Stimulation. Having products approved for these methods can help shoppers find and connect with items more easily.
- Sun-safe products: With the increasing rates of skin cancer, consumers are becoming more conscious than ever about proper protection in the sun. In fact, studies show that among the younger generation, there is more awareness and precautions being taken to stay safe in the sun. These consumers are looking for products with a high SPF count that are also safe for the environment and for their skin.
With an increased understanding of the risk factors around common chemical components in body care products, it’s not only important to offer a product with big promises to protect from the sun, but also ones that are healthy for the body and environment too.
The rise of multi-purpose products
As consumers adopt a simpler, more efficient lifestyle, multi-purpose products are seeing increased demand. These items provide value, versatility, and sustainability, appealing to consumers who want to streamline their routines and reduce waste. Whether it’s a sunscreen that doubles as a moisturizer or a fitness product that serves multiple functions, consumers are increasingly choosing for products that serve more than one function.
Why multi-purpose products are gaining popularity:
- Convenience and time-saving: With increasingly busy lives, consumers value products that save time. A 2-in-1 sunscreen and moisturizer not only protects skin but also hydrates, making it an efficient addition to any skincare routine.
- Cost-effectiveness: Multi-purpose items represent better value for money. For example, a fitness mat that can also function as a foam roller offers two uses for the price of one, appealing to cost-conscious consumers.
- Sustainability: Multi-purpose products help reduce waste by minimizing the number of items consumers need. For example, a reusable water bottle that doubles as a tea infuser reduces the need for multiple single-use items.
What this means for retailers:
- Offer multi-functional products: Think of products that combine two or more features, such as a shampoo-conditioner hybrid or a travel bag that doubles as a gym bag.
- Market value and sustainability: Highlight the cost-saving and eco-friendly aspects of multi-purpose products. Consumers appreciate the convenience and environmental impact of these items.
- Promote simplicity: Consumers are embracing minimalist lifestyles, so multi-purpose products that simplify their routines will be highly sought after. Wellness bundles and fitness gear that serve multiple functions will resonate with the growing demand for practical solutions.
Conclusion
The retail landscape in Summer 2025 is shifting in response to evolving consumer behaviors and economic realities. By understanding the impact of trade-down behavior, and the growing demand for sustainability, wellness, and multi-purpose products, retailers can tailor their offerings to meet these changing expectations.
Whether it's offering more affordable options, embracing eco-friendly products, or tapping into the wellness and multi-purpose product trends, retailers that adapt to these insights will position themselves to thrive in a competitive market. The key to success this summer lies in understanding what consumers truly want and delivering value that aligns with their shifting priorities.