As Q1 2025 unfolds, the retail and consumer goods sectors are facing complex challenges driven by economic pressures and evolving consumer behavior. For companies experiencing revenue headwinds, adapting to key trends can unlock new revenue streams, strengthen customer loyalty, and optimize channel strategy. This report highlights three critical trends and offers actionable strategies for businesses to navigate the downturn.
Trend 1: In-House Resale Goes Mainstream
What’s Happening:
More brands are reclaiming control over the growing secondhand market by launching their own in-house resale channels. Companies like Levi’s, Zara, and Lululemon have dedicated online storefronts for “pre-owned” or “like-new” items, capitalizing on sustainability values and price-conscious consumers.
Why It Matters Now:
- The US resale market is forecasted to hit $73B by 2028, a 217% growth since 2023.
- Gen Z now makes up 40% of US consumers and strongly values eco-conscious buying.
- Shoppers across income levels are shifting toward affordable, sustainable alternatives.
Business Opportunity:
For companies facing revenue pressure, launching a resale platform:
- Drives incremental revenue from previously untapped product lifecycles.
- Builds loyalty by offering customers lower-cost entry points into premium brands.
- Maintains brand equity compared to third-party resale channels.
Action Steps:
- Explore software solutions (e.g., Archive) for turnkey resale infrastructure.
- Pilot resale in select markets or product lines.
- Integrate loyalty incentives for customers who buy or sell used items.
Trend 2: DTC Brands Rethink “Direct”
What’s Happening:
After years of hype, many digitally native brands are reassessing the pure DTC model. High customer acquisition costs and weakening investor sentiment have forced DTC players like Oura and Glossier to partner with traditional retailers.
Market Reality Check:
- More than half of public DTC companies have seen their stock prices drop 50%+ since IPO.
- Customer acquisition costs are up 25–40% across digital platforms.
- Consumers increasingly expect to find DTC brands in brick-and-mortar stores.
Business Opportunity:
Revenue-challenged companies can stabilize by diversifying their channel mix:
- Partner with select retailers to reach new customer bases without overextending.
- Use omnichannel presence to improve brand visibility and conversion.
- Leverage retailer accelerator programs (e.g., Target’s) to streamline market entry.
Action Steps:
- Evaluate retail partners with compatible audiences and margin structures.
- Use data-driven pilots to test retail performance before scaling.
- Focus on differentiated SKUs to avoid direct competition with mass market products.
Trend 3: The Rise of the “Sober Curious” Consumer
What’s Happening:
A cultural shift is underway as consumers reduce alcohol intake and seek out healthier alternatives. From zero-proof spirits to wellness-focused beverages, the “drinking less” movement is gaining momentum across age groups.
Why It Matters:
- Health and wellness are driving consumption choices, particularly among Millennials and Gen Z.
- The no- and low-alcohol market is projected to exceed $30B globally by 2025.
Business Opportunity:
Brands in or adjacent to the food & beverage space can:
- Innovate or partner on non-alcoholic offerings.
- Market wellness-related benefits to tap into health-conscious consumers.
- Collaborate with lifestyle influencers who champion moderation and mental health.
Action Steps:
- Develop or source zero-proof SKUs for online or retail distribution.
- Highlight functional ingredients (adaptogens, electrolytes, etc.) to drive interest.
- Position offerings as inclusive, lifestyle-centric products—not just alcohol substitutes.
Final Recommendations for Revenue-Challenged Businesses:
- Re-engage your customer base through value-driven offerings—resale, bundles, loyalty perks.
- Reevaluate your channel strategy to include more cost-effective paths to reach customers (e.g., resale, retail partnerships, marketplaces).
- Lean into purpose and transparency. Values-driven messaging (sustainability, health, community) resonates deeply with today’s buyers and supports long-term retention.
- Optimize for agility. Run fast experiments in emerging areas (e.g., sober beverages, resale) to stay ahead of macroeconomic shifts.
Now is the time for brands to get scrappy, smart, and strategic. Even during a revenue downturn, aligning with evolving consumer values and diversifying distribution can pave the way for sustainable growth.
