It is only September and in many retail stores, the holiday shopping season has already arrived. The 2025 edition is anticipated to be a complex period, characterized by shifting consumer behaviors, economic uncertainty, and continued technology harmonization across physical and digital channels.
For the United States, all the major forecasts point to another positive, yet softer, retail holiday shopping season. Consumers are expected to be more value-driven, seeking deals and discounts while also prioritizing trust and a sense of normalcy from brands.
Factors such as inflation, tariffs, and generational divides in spending habits are expected to play a significant role in how consumers approach their holiday shopping. Retailers are advised to focus on delivering value, personalization, and seamless customer experiences to succeed in this evolving landscape.
This article begins with an assessment on the US sales trends entering the holiday season and the major technologies that will drive retail transformation in the next two years. It will then present the major industry predictions for the 2025 retail holiday season, the sectors expected to be hot, generational challenges, physical versus digital store growth, spending patterns by global region, when shoppers begin their holiday shopping, and the 2025 busiest shopping days.
The Pre-Holiday Retail and Technology Trends
Through August 2025, after adjusting for inflation, USA retail sales are growing 1.8%. Online leads sales growth followed very closely by specialty soft goods.
Struggling are department and specialty hard goods stores. Surprised by the lackluster growth rate of food, mass merchandisers / warehouse clubs, and restaurants.
Technology's importance continues to grow with 83% of retailers placing greater bets on Artificial Intelligence (AI) in driving personalized consumer experiences in the next two years, followed by closely in leveraging AI for demand inventory planning, and faster communication for improved store experiences.
Building on those two year technology projections which include artificial intelligence, here are the major AI trends for this holiday season:
- 39% of U.S. Millennial and Gen Z shoppers already use AI search while they’re in physical retail stores.
- 44% of U.S. shoppers trust those AI recommendations.
- 11% of Gen Z consumers in the U.S. start their shopping searches with AI chat assistants, with 9% of Millennials doing the same.
- AI and agentic AI will generate $260 billion in global online sales this holiday season.
- AI and agents to drive $1.6 trillion in global in-store sales.
- A third of global retailers will leverage AI agents to drive productivity by the end of the year.
Worldwide, the IHL Group is forecasting a $9.2 trillion overall economic retail industry impact from artificial intelligence through the year 2029.
Will We shop Till We Drop this Holiday Season?
The good news is that holiday retail sales are expected to grow between 2.9% to 4% this year. Deloitte projects 2.9% to 3.4% growth with ecommerce rising 7% to 9%. Bain & Company project overall retail sales growth of 4% this holiday season, with instore sales up 2.8% and ecommerce up 7%.
Mastercard projects retail holiday sales growth of 3.6%. In Canada, they project a 2.8% sales increase. Key trends identified by Mastercard this holiday season include a higher-than-normal use of gift cards this season, more spending on fitness brands, and greater influence from social media, especially for GenZ.
It will not be a "shop till you drop" holiday season. In fact, eMarketer forecasts a significant slowdown in US holiday sales growth across all channels due to economic uncertainty, tariffs, and inflation. They actually expect a rare deceleration with consumer spending more restrained and focused on value driven promotions, mobile commerce, and AI tools.
What is Hot and What is Not this Retail Holiday Season?
As with every holiday season, there will be winners and losers in the quest for that perfect gift. Challenged in 2025 will be department stores, electronics and appliances, and the DIY retailers. Department stores will be flat to last year, while the order two sectors are expected to see a decline in holiday sales growth.
Ecommerce leads the winning growth sectors followed by health & personal care, general merchandise, and clothing & accessories. Grocery will be flat to last year and furniture & home furnishings will see some growth, but a decline from last year.
Physical store visits will be up this year to 36% versus 24% last year with pure ecommerce showing a decline from 34% to 26%. GenZ will have the most challenged budget this year with their average expected holiday spend dropping nearly 23%.
Again, social media will play a key role in reaching consumers, especially for GenZ. Tariffs are on shoppers' minds and for those most worried about this issue, they will spend 10% less.
Asia Leads the World in Holiday Spending
According to Discover, "global growth is predicted to slow from 3.3% in 2024 to 2.9% in 2025 and into 2026. In regions like North America and Asia, weaker economic outlooks may be influencing how and how much shoppers spend."
Asian consumers are planning to spend 34% more than last year on gifts in 2025. The laggard region is North America with only 17% planning to spend more.
Nearly three-quarters of the respondents to the Discover survey indicated they plan to shop earlier this year with 61% saying they would start before the end of October. Peak is November with 13% joining in early to late December.
As reported by Sensormatic, probably not a surprise what the top 5 busiest shopping day are for 2025. The first two, Black Friday and Super Saturday, match last year, but number 3 last year was Monday December 23.
In 2025, Black Friday will also be the number one shopping day in Brazil and South Africa. This year, Super Saturday December 23 is number one in Colombia, Costa Rica, Germany, United Kingdom, and Ireland.
Wrapping Up the 2025 Retail Holiday Season
Salesforce best summarized the key trends that will shape the 2025 retail holiday season. According to their research, "51% of shoppers reported that they’re currently prioritizing essentials and 49% are pulling back on splurge purchases, a trend reported in 2024 and continuing into the new year."
Salesforce five predictions include:
- Hyper-personalized product discovery is here - 5% of all shoppers now start their product search with AI chat assistants like ChatGPT. For Gen Z consumers, that number jumps to 10%. Additionally, 39% of shoppers report using an AI chat at some point during their shopping journey.
- AI agents will boost employee productivity - 35% of retailers will be using agentic AI to boost their workplace and employee productivity.
- Unified commerce experiences will supercharge online and offline sales - "Shopping journeys are becoming incredibly complex, scattered, and disjointed." The average shopper interacts with a brand nine different times before making a single purchase.
- Trade uncertainty will push shoppers to resale, as promotions are cut back - "When asked how tariffs are impacting their purchasing habits, 40% of global shoppers said that they’re just buying essentials right now while they wait out the trade implications. Another 26% said that they’re holding back on splurge purchases. In the US, 43% of shoppers are reporting a doubling down on essentials, while 32% are stocking up on the items they need before price changes go into effect."
- Price and quality will drive loyalty - In 2025, quality is again number one in the minds of consumers. Loyal shoppers will spend 20% more this holiday compared to every new shopper acquired.
In summary, 2025 should deliver a decent growth holiday shopping season. AI will play a bigger role and its influence will continue to increase. Stores are back, but harmonization across channels is becoming much more important. Economic uncertainty is an issue, but as consumers and humans, gift giving will never go out of style. Happy Holidays everyone.
