In the first half of 2025, tariffs rattled retailers, consumer trust wavered in the face of muted DEI efforts, and fast-fashion platforms like Shein and Temu braced for policy whiplash. Meanwhile, private label products surged in popularity, and the retail world took a closer look at generative AI—not just for buzz, but for tangible impact across the shopper journey.

Here are the top stories from H1 2025 and why they matter for the rest of the year.

Tariff fallout takes hold as pressure builds on retailers and consumers

Why it matters: Tariff uncertainty is throwing a wrench into retail’s long-term planning, with the Trump administration’s shifting trade policies making it hard for businesses to predict costs or demand. This is putting extra pressure on sectors like apparel and electronics, smaller retailers, and those relying on China. Consumers are feeling it too, and many are already cutting back on nonessentials. Business optimism is slipping, and retailers are warning of a rough economic climate ahead.

Consumers reassess shopping habits as brands deliver muted DEI campaigns

Why it matters: Retailers’ pullbacks on DEI efforts are driving consumer backlash and could be hurting their bottom line. For example, Target’s declining sales in Q1 could be seen as a direct consequence of its DEI rollbacks, which triggered economic boycotts and damaged its brand. Brands must be cautious with how they approach DEI issues in the future, especially considering younger and values-driven consumers are especially likely to stop supporting brands that reverse course.

Tariff reprieve gives Shein, Temu, and TikTok Shop much-needed breathing room

Why it matters: Shein, Temu, and TikTok Shop’s recent shifts highlight how quickly platform dynamics can change under economic and geopolitical pressure. For retailers, it’s a reminder of the risks of relying on low-cost imports and international platforms. As tariffs rise and uncertainty around TikTok grows, success will depend on flexible, platform-agnostic strategies, diversified supply chains, and new ways to reach value-driven consumers.

Private label evolves from a budget basic to a brand powerhouse

Why it matters: Private label brands have transformed from basic, low-cost alternatives into powerful tools for retailers to drive loyalty, boost margins, and differentiate themselves. With consumers increasingly viewing these products as high quality and budget-friendly, retailers like Walmart and Target are investing in innovative, premium private label lines that compete directly with national brands. As inflation and economic uncertainty shape consumer behavior, private labels offer value, flexibility, and a unique brand experience that strengthens retailer-consumer relationships.

Generative AI in retail: What’s hype vs. reality in the shopper journey

Why it matters: Generative AI (genAI) is transforming retail by enabling personalized recommendations, 24/7 customer support, targeted marketing, and operational efficiency. But its real value lies in addressing real customer pain points—like simplifying returns, tracking deliveries, and enhancing loyalty programs. While many retailers focus AI on attracting shoppers, consumers want it to improve their everyday experience. Those who bridge this gap by building trust, strengthening data, and using genAI to solve practical problems will gain a competitive edge and drive lasting loyalty in an AI-driven marketplace.

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