Friends on board

Sun, sea, and a summer of spend: how retailers are adapting to the latest trends

27 June 2024

By Karen Johnson, Head of Retail at Barclays

With the growing popularity of budgeting challenges on social media, Brits are now increasingly conscious of how much they’re spending, with the term ‘No Spend’ having amassed 36.9 million posts on TikTok alone. But as trends come and go, it’s important for retailers to stay abreast and ensure they’re keeping up with whichever direction consumers are heading.

Barclays Consumer Spend data for the early months of 2024 reveals a cutback on new clothes and accessories, coffees, takeaways, and dining out, with some going as far as unsubscribing from marketing emails in an effort to avoid temptation. The cold and wet winter, which included storms Isha and Jocelyn, was a tough period for retail. Spend on clothing and household items was down 0.9% and 5.3% respectively in Q1 2024.

On a brighter note, there were several areas of non-essential spending that continued to see robust growth. Spending on digital content and subscriptions spend grew 10.8% in the quarter compared to Q1 2023, as people swapped the high street for their sofas to watch popular new TV releases such as ‘One Day’ and ‘Fool Me Once’, as well as cultural events like the BAFTAs, Oscars, and Super Bowl.

Also, the buzz surrounding the summer’s high-profile events – including the Paris Olympic and Paralympic Games and the Euros – prompted people to start holiday planning, with consumer spend on travel up 9.1% year-on-year, according to Barclays’ credit and debit card data.

Many clients are finding success by adapting their marketing strategies to complement or take advantage of these trends. For example, promoting clothing lines and accessories targeted at those going on holiday, or those who were hunting for new (bejewelled!) outfits to wear to Taylor Swift’s ‘Eras’ tour. Others are testing out new store concepts to draw consumers back to the high street.

Elsewhere, our specialist industry teams are reporting an increased interest in the ‘pre-loved’ space, which is likely to continue into H2, with some household names expanding their existing platforms to launch second-hand marketplaces for clothes and accessories.

Much of this is being driven by Gen Z shoppers, who have different expectations of the brands they engage with, compared to previous generations. To engage these shoppers, it’s important for retailers to keep up with evolving trends and ensure they have seamless digital shopping experiences. Most Gen Z consumers expect to be able to do their shopping on their phones, with an increasing number of brands going beyond partnering with influencers, and now integrating their entire marketplaces on social media platforms.

Although retailers have told us that they’re expecting a slow return to growth, as inflation falls back and real term earning improve, we can expect consumer confidence to grow over the coming months – particularly now, with the sudden arrival of sunny weather. Whilst consumers are still spending, they are less impulsive and more considered, prioritising experiences over material products. Ultimately, there are plenty of opportunities to engage consumers, as we enter into what we can expect to be a very busy summer.