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The first quarter of 2025 has ushered in transformative changes across the retail industry, driven by evolving consumer expectations, rapid technological advancements, and a continued emphasis on sustainability. UserTesting has released its Retail Pulse for Q1 2025, which shows how consumers are interacting with brands both online and in-store, highlighting key factors such as convenience, personalization, and trust.
Personal recommendations gain ground
Consumers are increasingly valuing trust and authenticity when selecting brands for the first time. In Q1 2025, personal recommendations surged to 34%, up from 20% in Q4 2024, while reliance on product ratings dropped to 41% (from 61%). The holiday shopping season likely influenced this trend, as many sought recommendations from family and friends. To capitalize on this shift, brands should prioritize word-of-mouth advocacy through loyalty programs and community engagement.
Meanwhile, the role of influencer endorsements, while still a minor factor, grew from 1% in Q4 2024 to 6% in Q1 2025, highlighting their growing impact on younger, digital-savvy consumers. Brand reputation remained stable at 19%, reinforcing the continued importance of trust in consumer decision-making.
The rise of DTC channels
Q1 2025 saw a significant shift toward direct-to-consumer brands. The percentage of consumers who preferred purchasing exclusively from brand-owned websites rose from 10% in Q4 2024 to 25%. Simultaneously, preference for brands with physical stores saw a modest increase from 26% to 29%, underscoring the continued value of brick-and-mortar presence in building credibility.
Conversely, the percentage of consumers favoring brands sold through third-party retailers declined sharply from 64% to 46%. This underscores the growing importance of brands investing in exclusive e-commerce platforms to capture consumer loyalty and strengthen their competitive advantage.
Quality vs. Price
While product quality remains the primary factor driving repeat purchases, its importance decreased from 63% in Q4 2024 to 54% in Q1 2025. At the same time, price and promotional offers gained influence, increasing from 31% to 40%. This shift reflects a heightened cost-consciousness among shoppers, likely influenced by holiday shopping patterns and competitive pricing.
Convenience and availability slightly increased from 3% to 4%, while customer service remained stable at 2%. These insights suggest that while quality remains crucial, competitive pricing and promotions are becoming increasingly essential for customer retention.
Skepticism toward AI grows
Consumer trust in AI is waning, with agreement on its effectiveness dropping to 52% (from 57%). Concerns around data privacy, ethics, and underwhelming performance contribute to this decline. Additionally, AI-generated recommendations may lack the necessary context for gift shopping, making consumers more hesitant to rely on automated suggestions.
Neutral responses remained stable at 31%, suggesting a consistent level of uncertainty. Brands can address these concerns by emphasizing transparency, human oversight, and AI education campaigns to build trust and demonstrate the benefits of AI-driven shopping experiences.
Personalization satisfaction soars
Q1 2025 saw increased consumer satisfaction with personalization, particularly in tailored shopping experiences. However, a notable decline in the number of personalization features expected by consumers suggests that expectations may be shifting due to inconsistent experiences or unmet promises.
Generational gaps
Older shoppers (ages 65+) reported the highest levels of satisfaction with personalization, whereas younger shoppers (ages 18–34) were more critical, often feeling that brands fell short of their expectations. According to the report, retailers should focus on dynamic, data-driven personalization strategies to engage younger audiences while maintaining strong engagement with older, more satisfied demographics.
The UserTesting Retail Pulse surveyed 403 participants in Q1 2025, compared to 404 in Q4 2024. All participants were sourced from the UserTesting Network. They were screened based on recent in-store shopping activity and purchases across multiple brands or retailers.
