Circana forecasts retail growth opportunities for 2025

Circana has released its economic outlook for 2025, highlighting anticipated macro-economic stabilisation and opportunities for growth within the Australian retail industry.

At the annual State of the Industry event, Circana experts indicated that economic pressures which have placed significant strain on consumers and the retail industry are expected to ease in the coming year. This development could alter the prevalent focus on price and affordability, although consumers may take some time to adjust their spending mindsets.

To navigate ongoing price sensitivity, Circana recommends that brands and retailers develop 'permissibility platforms'. These include offering 'Indulgent Insperiences', which aim to recreate out-of-home experiences within the home environment.

Further suggestions include amplifying both affordability and inspiration by demonstrating value beyond price alone. Another approach is to identify the optimal balance between creativity and convenience for home-cooking enthusiasts, dubbed the 'currency-of-convenience'.

Brands are also encouraged to leverage trends that resonate with consumer audiences, such as sugar-free or high-protein products, referred to as 'appealing (non) attributes'. Engaging consumers by blurring category and channel boundaries is another tactic to generate interest and excitement.

The use of social media to create 'social sensations' can contribute significantly to brand growth, according to insights from the event.

Daniel Bone, Insights Director for Australia at Circana, elaborated on strategies for brands to stay competitive. "When we talk about changing the conversation, we're talking about value. And moving the dial towards benefit-incentives rather than only price incentives. That's how Australians determine value for money. It's about price. But equally about benefits that signify quality." Bone further noted the importance of creating "permission-to-spend in more creative ways" to mitigate price sensitivity.

The role of technology in 2025 is also expected to be significant. Circana emphasised the importance of leveraging data effectively to enhance customer experiences and maintain a competitive edge. While access to data is universal, it is the quality and application of data insights that will differentiate leaders in the retail space.

Artificial Intelligence (AI) will continue to facilitate productivity improvements and efficiency gains in retail operations. AI is also anticipated to assist in marketing activations by streamlining workflows.