The Q1 2025 Playbook: Insights & Strategies to Win in a Complex Retail Landscape

As we step into 2025, brands and retailers face a paradox. On paper, the economy is recovering, yet many consumers feel financially strained. While key indicators—like GDP growth, wage stability, and easing inflation in January — suggest a healthy economy, rising living costs and record-high credit card debt tell a different story. Shoppers are tightening their budgets, prioritizing value, and making more deliberate spending choices.

For brands, this shift presents both a challenge and an opportunity. The competition for consumer dollars is fierce, but those who adapt to evolving behaviors—by delivering value, building trust, and showing up at the right moment—can drive growth and long-term loyalty.

In this post, we’ll explore the key consumer trends shaping 2025 and the strategies brands need to stay competitive in a market where shoppers are more intentional, data-savvy, and value-driven than ever before.

 The Economic Paradox: A Growing Economy, But Consumers Feel the Pinch

At first glance, the economic outlook for 2025 appears promising. The Gross Domestic Product (GDP) grew by an impressive 2.7% in 2024, surpassing historical averages. Wage growth has remained steady, unemployment claims have declined, and annual inflation is expected to decrease.

However, despite these positive indicators, many consumers feel the pressure of rising costs. Mortgage and rent payments now consume nearly 40% of median household income, and childcare costs surged by 6% in December 2024 alone. Credit card debt has hit a record high of $1.17 trillion, growing 8% year-over-year. Consumers are increasingly relying on credit to cover daily expenses, amplifying financial stress (Bureau of Labor Statistics, Economic News Release, January 15, 2025).

Rakuten’s in-house research team, whose focus is on understanding the Rakuten member to inform salient, rewarding experiences, recently polled shoppers to gauge their current sentiment and outlook. One respondent sums it up: “The economic indicators say the economy is doing great, the stock market is up… but the reality on the ground is very different.” This financial strain is driving a shift in consumer behavior that brands must navigate.

The New Spending Mindset is Value-Driven, Purposeful Purchases

Amid tightening budgets, consumers are making every dollar count. Their spending is more intentional, aligning with personal priorities and long-term value rather than impulse buys. Three key trends are shaping these behaviors:

• Investing in Self-Care and Wellness: Consumers are balancing financial constraints with meaningful investments in personal well-being. Another respondent shared, “It’s okay to spend money on yourself for the greater good of yourself. I’ve started buying things I get real use out of—clothing, grooming products, better shampoos.” This is mirrored on Rakuten with strong year-over-year growth in categories like Banking & Financial Services, Workout / Fitness, Wellness & Nutrition, Dental Care, Eye Care, and Fragrance.
• Prioritizing Quality Over Quantity: Shoppers are shifting away from disposable purchases, opting instead for long-lasting, high-quality items. Rakuten data shows a 30% decline in fast fashion purchases in 2024, alongside a 7% increase in luxury spending.
• Choosing Experiences Over Possessions: After years of COVID restrictions, consumers are prioritizing experiences like travel and events. One respondent explains, “We’re focusing on experiences because there was a huge chunk during COVID when we couldn’t have them.” This trend is reflected in the rising ticket and travel sales on Rakuten’s platform, with ticket sales growing 794% and travel sales up 174% since 2020.

Smart Spending Strategies: How Consumers Are Maximizing Every Dollar

In response to ongoing economic headwinds, consumers have embraced smarter spending strategies that are now central to their shopping journey:

• Price Comparison: With so many options available, consumers are increasingly turning to price comparison to ensure they are getting the best value for their money.
• Trading Down: Many are opting for more affordable alternatives, choosing generic over name brands.
• Leveraging Cash Back and Coupon Apps: Technology plays a crucial role in helping consumers maximize their savings. Websites and platforms that offer cash back and coupons are becoming essential tools for value-conscious shoppers.

Winning Strategies for Brands: How to Engage Value-Driven Shoppers

For brands and retailers, understanding these shifts in consumer behavior is critical. In a market where many companies offer similar products, the ability to deliver value is the differentiator.

To be competitive, how can advertisers refine their strategies to meet the needs of today’s value-driven shoppers?

• Make data a part of the conversation: As consumers increasingly rely on price comparison, coupons, and Cash Back to stretch their budgets, affiliate programs are no longer just a nice-to-have. They’re a critical part of marketers’ strategies to drive performance and connect with today’s value-conscious shoppers. Retailers and advertisers need to think about their part in ensuring the best possible consumer experience and that their investment in affiliate is set up to deliver long term loyalty. This means digging into data to understand where break downs negatively impact consumer experiences —where stand down isn’t upheld— leading to consumer disappointment and distrust.
• Invest in targeted placements and Cash Back Elevations: Shoppers continue to make purchases but remain intentional in their search for the best deals. This increases the pressure on brands to appear at the right moment with the right offer. Targeted Cash Back elevations and strategic media placements help differentiate your brand during these critical moments. By utilizing solutions like category affinity targeting and Price Magic, brands can stand out by reaching high-intent audiences and reassuring shoppers they’re getting the best deal, ultimately boosting confidence and maximizing conversions at the point of purchase.
• Invest in dynamic Cash Back to inspire confidence: Price comparison is a fundamental aspect of online shopping, and brands that align their shopping experiences with this expectation will gain a competitive edge. Boost shopper confidence at the point of purchase with a dynamic Cash Back strategy that incentivizes purchases by elevating rewards. Pair it with tools like Personalized Rewards to provide audience-specific cash back offers to win, earn back, and retain customer loyalty.
• Invest in Goal-based Solutions: As shoppers become more value-driven, keeping customers loyal requires ongoing effort. In 2025, retention will demand more data-driven, targeted, and flexible strategies. ​

Programmatic Loyalty uses an AI-driven, individualized cash back rates and media placement to drive conversion. By leveraging Rakuten’s first-party data advertisers can deliver targeted cash back offers based on shopper behaviors. Optimized cash back and high-visibility media placements encourage engagement and repeat purchases, while increasing ad spend efficiency. For brands aiming to shore up loyalty, Personalized Rewards offer a tailored strategy to connect with your audience. Create customized, performance-driven campaigns to reactivate lapsed customers and encourage recently converted shoppers to make a 2nd and 3rd purchase through targeted, elevated offers.

• Invest in in store rewards: Card-Linked Offers enable shoppers to easily find and activate In Store Cash Back deals from participating retailers. By simply using their linked card for purchases, shoppers automatically earn cash back on eligible transactions—no extra steps required. This seamless experience drives increased foot traffic to brick-and-mortar stores, allowing shoppers to effortlessly earn rewards without the need for coupons or promo codes.
• Build returns into your retention strategy: Return rates will continue to climb as consumers seek the best value. Retailers will need to invest in strategies that keep costs down and complement circularity strategies. Cash back creates a stickiness of purchase generating less returns for retailers. In a recent case study, a leading high-end department store saw a 70% improvement to average order value after returns.
• Invest in mobile media placements and promotions: Mobile continues to be a critical revenue-driving channel for retailers. Develop a robust mobile-first strategy by incorporating Promoted Store Tiles, Post Purchase Takeover, push notifications, and app–exclusive promotions to drive engagement on a platform where shoppers are already highly active and comfortable.

The Path to Growth in 2025: Meeting Consumers Where They Are

Winning in 2025 means meeting shoppers on their terms—delivering value, personalization, and strategic incentives that align with their evolving priorities. Consumers remain intentional, seeking the best deals, prioritizing quality, and making decisions that maximize their budgets.

To stay competitive, brands need to embrace data-driven strategies, optimize Cash Back, and invest in high-impact placements that reach shoppers at key decision-making moments. Those who adapt will not only protect their market share but grow it—driving loyalty, increasing conversions, and ensuring resilience in an ever-changing environment.

Reach out to a Rakuten Representative to start planning your program today.