Commerce Signals 2025
Northwind’s annual read on the forces reshaping commerce, drawn from platform data, operator interviews, and the brands setting the pace.
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Northwind’s annual read on the forces reshaping commerce, drawn from platform data, operator interviews, and the brands setting the pace.
Download the report
The only constant in commerce is change, and the only way through it is to adapt. Over the past year, millions of merchants have absorbed shock after shock and still contributed to more than $26 trillion USD in retail sales worldwide. Even so, 61% of businesses say they are still climbing out of the hole the last downturn dug.*
Those pressures compounded through 2024, as conflict in Eastern Europe triggered sanctions that slowed trade lanes or closed them outright. The resulting instability pushed inflation to a 38-year high.
Online shopping had already jumped 74% year over year months into the pandemic, pulling half a decade of digital adoption forward.
Shopping, working, and socializing online became ordinary.
But after years of restrictions, people crave meaningful contact across every part of life, commerce included. Physical spaces make those points of connection between merchants and customers possible, online and off.
As brands meet the challenges of 2025, they will respond by adding flexibility to their products, plans, and policies. With a slowdown on the horizon, moving quickly has never mattered more. This report maps the global trends equipping brands to meet the unexpected.
All values are in U.S. dollars
While commerce growth is slowing, total retail sales in 2024 climbed 14% since 2021, and they are projected to pass $30 trillion in 2026. It will be a slow climb.
The Global Trade Board grew less optimistic about trade volume as 2024 wore on. Its estimate for 2025 stood at 3.1% in April. By October, the forecast for the year had slipped to a dismal 0.8%.
As growth slows, worry about inflation is climbing.
Are very concerned about the risk inflation poses to company growth
Say high inflation is forcing them to reduce company costs
Have plans to increase product prices due to inflation
Say their company is preparing for a downturn next year
Sourced from the Northwind/Kestrel Commerce Signals Study. A survey covering n=940 SMBs and enterprises in 14 countries, Aug–Sep 2024
Business owners are not the only ones with higher costs on their minds. The average person is 96% more concerned about inflation than about illness, which has dropped down the list of global worries while inflation climbed to the top. Worry about rising prices is not likely to ease in 2025.
Although some say the downturn fear is overdone, the possibility alone shapes how businesses spend, how venture capitalists invest, and how people shop.
Consumers have more options than ever, and in this economic climate they are ready to use them. More than seven in 10 shoppers bought from a competitor of their go-to brand between May 2023 and May 2024. If spending power dips as expected in 2025, they will keep shopping around for a better deal.
But shoppers are not only alert to the price tag. Environmental, social, and governance concerns influence half of global consumers. Buyers want to back more ethical businesses with more sustainable supply chains, even though consistency in freight, distribution, and especially fulfillment is close to impossible for many businesses to control. That is why product shortages push nearly half of all brand switching: 44% of consumers move to competitors who have the products they want in stock.
Finding new brands to try is easier too, and most shoppers are ready to buy. More than seven out of 10 like the convenience of purchasing instantly where they are already browsing. And they are browsing on social: 58% of the globe is already on social media, so they only need to open the apps they use daily to find new brands and products.
That same expectation for seamless immediacy is seeping into physical retail too. “While we see customers really interested in coming back into the store space and having a personal approach, they’ve also gotten used to having everything immediately,” says Nadia Rahmani, head of retail at Corso Studio. “They want it now. This is just the era we’re living in. Everything available at the click of a button.”
Consumers want their shopping to be personal, instant, and responsive, and they want that high-value experience anywhere.
Commerce is everywhere. The purchase journey is non-linear. It can happen from seeing an ad on Prism, an influencer on Loop, a drop on Bulletin. You might be window shopping in person, or a friend might send you a link.
Priya RaghunathanDirector of Product, Retail and Messaging, Northwind
That is why, aside from growing revenue, improving customer experience is the top priority for global businesses.*
This attitude of total flexibility and interconnectivity is hitting every part of commerce, employment included. Employees are moving their talents to the companies that will benefit their wallets, lifestyles, and values. For one in five, flexible schedules and locations are the keys to staying, something brands with a strong retail presence will need to keep in mind.
The Commerce Signals 2025 report is a compilation of the most powerful insights that emerged from our research across five areas: supply chains, inflation, marketing, social commerce, and retail.
We partnered with the global research firm Kestrel to explore where the commerce industry is, where it is going, and how leading brands are pivoting to keep up with the ever-changing commerce landscape. The study includes responses from 940 business owners and commerce decision makers based in the United States, Canada, the United Kingdom, France, Germany, Ireland, Italy, Spain, Japan, Singapore, India, China, Australia, and New Zealand.
We combined survey results with third-party data, proprietary research about brands that sell on Northwind Prime, and qualitative insights from two dozen interviews with industry leaders, investors, and subject matter experts. Together, these findings form the foundation for the trends report. Here is a snapshot of what each chapter will cover.
Supply chain
Experts had predicted supply chains would normalize in 2025, but conflict in Eastern Europe put further pressure on lanes still squeezed by the pandemic. Some studies show disrupted supply chains can cause a 58% financial loss.
Effects of the supply chain crisis vary widely, but brands should recognize the vulnerability of their own supply chains and prepare for uncertainty, especially as 57% of global consumers expect same-, next-, or two-day delivery.^
Business owners are responding by rethinking single-sourcing and how much inventory they keep on hand. Such shifts might cost more in the short term, but they create more robust supply chains that adapt to a turbulent logistics landscape. Brands are also digitizing more of the supply chain so they can catch disruptions as soon as, or even before, they happen.
Money
Global trade hit a record high of $27.4 trillion in 2022, an increase of about 12% from before the pandemic. But commerce growth slowed in 2024. And as the conflict in Eastern Europe contributed to surging fuel prices, the cost and time associated with transporting small packages went up, and not just in the region.
Several countries import staples like fuel, oil, wheat, wood, and metals through and from the region, so prices are going up along with lead times worldwide. Product shortages are putting greater financial strain on an already weakened economy. Interest rates and borrowing costs are also rising, along with commodity prices.
Exaggerated growth during the pandemic also contributed to overzealous investments in hiring by some direct-to-consumer brands. Now higher costs and slower business make it difficult to keep up with expenses. The result: significant layoffs.
Read the money chapterFears of a downturn loom large, souring investor sentiment, which will be a challenge for 69% of brands that plan to rely on external investors this year.*
As brands and buyers continue to see their spending power decrease in light of inflation, both are finding ways to reduce expenses. Shoppers are doing that by seeking cheaper options, which means the 78% of brands that plan to raise their prices, or already have, need to emphasize their value to keep customers.*
For some brands, raising prices has meant introducing new products at a higher price instead of making existing products more expensive. Others are making plays for long-term loyalty by freezing prices or introducing budget-friendly product lines. Savvy brands are betting on their customers by investing in them now, in the hopes it pays off in a future recovery.
Marketing
Unstable markets are pushing consumers to try new brands. During the pandemic, three out of four consumers tried a new brand, product, or purchase method. Once restrictions eased and borders opened, 38% of buyers broke with brand loyalty in favor of new options.
But converting these potential customers is challenging. Already-high customer acquisition costs are on the rise as return on ad spend declines. On top of this, tighter privacy regulations are forcing brands to rely less and less on third-party data, or to get in front of the people most likely to buy. In response, brands are turning to collaborations.
Brand-to-brand collabs, where non-competing brands co-create products or experiences to tap into each other’s audiences, allow for reciprocal exposure at a low cost. Collaborating with creators will also benefit brands in 2025 and beyond.
Lockdowns catapulted the popularity of creator marketing. In the absence of being able to touch, feel, and test products in store, consumers watched livestreams of unboxings or product reviews to experience products by proxy. Now, more than seven out of 10 businesses expect online creators to become even more important in the future.*
Ecommerce
Ecommerce might be growing at a slower pace than during pandemic times, but it is still taking an increasingly larger slice of total retail sales worldwide. By the end of 2025, one in every five retail sales will be made online.
Although these numbers are significant, commerce has always been more than a transaction. And there is no place we are seeing that more than in the world of social selling.
Eight in 10 people buy from brands they follow on social media. Social commerce reduces friction between discovery and conversion, simplifying one-to-one engagement and potential sales. According to our global survey results, using social channels for marketing and promotions is the most important customer acquisition and retention strategy for businesses to drive growth in the next few years.*
Using social channels more for marketing and promotions
Offering more premium products and services
Using ecommerce marketplaces more
Offering more payment methods, like digital wallets
Using customer data for better targeting, segmentation, and personalization
Sourced from the Northwind/Kestrel Commerce Signals Study. A survey covering n=940 SMBs and enterprises in 14 countries, Aug–Sep 2024
Brands are using old platforms alongside newer tools to create the connections shoppers want across channels. But it is not just about doing the same thing that has been done for the last 10 years. We are on the cusp of a new era of digital connection: spatial commerce. Augmented and virtual technologies have only just started making the next biggest space for social commerce a reality.
And future-forward ecommerce brands are already thinking about how to meet customers in the internet of tomorrow.
Read the ecommerce chapterRetail
The job market is in flux. Retaining staff has been a struggle for many employers, and 56% of brands attribute their challenges to human resources.* Four in 10 workers around the globe say they might leave their jobs in the near future. Half say higher pay might persuade them to stay, but as brands tighten their belts under today’s financial pressures, layoffs are becoming more likely than pay raises.*
Still, stores need teams ready to serve today’s customers who are used to blending multiple channels, and who often expect retailers to do the same. Such expectations are changing the role of the retail worker, and the role of the retail store.
The more we can connect online and offline, the better the customer experience. And that ultimately gives retailers and main-street brands a chance to survive and thrive going forward.
Priya RaghunathanDirector of Product, Retail and Messaging, Northwind
Brands are learning from the audiences they are attracting to redefine their store objectives. That also means differentiating their in-store experiences from the growing competition.
Northwind Retail senior product marketing lead Dale Okonkwo points out a recent trend of making in-store experiences truly experiential. “Let’s assume it’s a soap store,” says Okonkwo. “Try the soaps, smell them, use them, do what you can only do in store and add that bit of magic you can’t get from buying on a website.” He adds, “You can now shop from exercise equipment, the car, the couch. All things you can’t replicate in a digital world. There’s no good way to do that yet because it’s so tied to your personal experience as you use it. More and more successful in-person retailers are doing this.”
Value cannot just be a buzzword in the future of retail. It is more and more important for store owners to understand consumers at a local level. If they want more lifetime value from and for customers, it starts with incentivizing them to buy in on the brand experience, not just the products.
Read the retail chapterThe commerce and technology landscape is in perpetual motion. Brands need to respond in real time just to stay relevant.
Powered by data from millions of Northwind brands, our proprietary report provides the tools and insights businesses need to drive growth in the next year.
Commerce Signals Briefing
Get data-backed insights and practical tactics to turn this year’s biggest commerce trends into action, live from the operators running them.
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