Rose Tomlins is a managing partner at the research and strategy consultancy, MTM. With 25 years of experience in brand strategy and insights, Tomlins helps brands achieve differentiation, salience, and sustainable growth in competitive markets.
The U.K. retail industry has been rocked in recent years by new challenger brands and platforms that have built up a big customer base by gamifying the shopping experience.
Many of these companies come from overseas. They have a reputation for cheap prices, and they are giving long-standing British brands a run for their money.
My firm, MTM, recently conducted research, in partnership with Google, to gain deeper insights into these challengers to understand their appeal across categories including fashion, technology, home goods, beauty, and sport.
Up until now, there has been very little industry research showing who is buying from these companies.
What we found in our research was surprising:
While you might expect these brands to resonate with Gen Z or lower income buyers, these challenger companies have a far wider audience.
In particular, our research found young families and high-value customers are making purchases from these companies. And a huge part of the appeal is the gamification of the retail experience, which gives the purchases more of a thrill-factor, and makes the buying process more rewarding.
Understanding the competitive landscape
Here are the stats that demonstrate their far-reaching success:
- 51% of U.K. shoppers have purchased from these challengers in the past six months.1
- 73% of families with young children report that they have purchased from these companies in the past six months.2
- Higher-income households are more likely to shop with challengers than lower-income ones.3
It’s easy to dismiss this as a challenge for the fashion industry alone, but don’t. The data tells a broader story — this is a multi-category challenge. And it’s accelerating.
U.K. shoppers like a discount, but they also want experiences
Our research dug further to understand what compelled people to buy from these companies.
For starters, let’s talk about price.
The low prices make the purchasing experience feel low risk. Eighty percent of the shoppers we surveyed said it’s worth taking the risk when the prices are so low.4 And then three out of four shoppers said they were pleasantly surprised by the quality of the items they purchased.5
Of course, low prices are just a foot in the door. After that, these brands drive sales through gamification and emotional payoff.
Challengers gamify discovery with tactics like spin-the-wheel offers, pop-ups, app-only rewards, and exclusive bundles, disrupting the shopping journey in a way that feels clever and engaging.
These brands are acting more like creators than advertisers — using digital and AI tools to create sticky, reward-rich experiences that consumers want to return to.
Customers may initially be drawn in by low prices, but they follow through with purchases because the experience feels fun, rewarding, and emotionally engaging. And our research shows these customers are coming back again and again.
3 opportunities for legacy brands to regain market share
It’s worth remembering that these emerging players are not preferred brands. At least, not yet. There is still a window of opportunity for British retailers to reclaim market share and bring back loyal customers.
Here are some opportunities to pursue:
1. Engineer excitement: Shift from price to perception Consumers don’t (always) want frictionless. But they do want fun. There’s an opportunity to use your creative to inject more emotion and fun, and use marketing tactics that introduce light-touch interruption moments and perceived rewards. Think creative overlays, dynamic content, and compelling reasons to pause and engage, so you show up every time your customers are searching for you and your category.
2. Think lifetime value, not one-off wins Challenger brands aren’t measuring success by single conversions. Instead, they optimise for repeat engagement and low-risk purchases that encourage people to come back, again and again. Marketers should shift to the same model:
- Use first-party data to understand purchase frequency, retention drivers, and long-term ROI
- Layer this into performance and brand measurement to protect share while growing reach
3. Turn physical stores into a competitive advantage Unlike many challenger companies, U.K. retailers already have a powerful, underused asset: physical retail. This is a uniquely local strength that can be turned into a strategic edge.
- Connect online discovery with offline experience to create seamless, omnichannel journeys
- Use store-level insights to personalise offers, measure footfall, and trigger re-engagement
- Leverage in-store experiences to fuel loyalty and content. This could include QR-led offers, product drops, and in-store exclusives
When physical and digital are integrated thoughtfully, traditional retailers can deliver emotional connection, convenience, and real-world delight in ways these newcomers might find hard to match.
In a world where people tune out stale content fast, marketers need to stay not just relevant, but resonant.
Learn more about this research by watching my conversation with Carla Puttini, strategic insights manager at Google:
