Economic Concerns, AI and Bnpl build for 2025 holiday shopping
Holiday shopping is followed like everything else in 2025: a roller coaster ride.
The National Retail Federation now predicts that retail sales in November and December will exceed $1 trillion, an increase of as much as 4.2% from the high prices.
As Friday’s flood boxes pile up and Christmas shopping becomes a nightmare, Americans are taking steps to shift their priorities, use starters and pay on their own terms. Here are three major trends you can expect to see this holiday shopping season.
Everyone is worried about the economy
“Consumers are feeling the pinch from many angles,” marketing expert Wendy Bergh, chief marketing officer at Rakuten Rewards, wrote in an email. “Inflation is still very real, but we’re also seeing financial pressures from rising taxes and continued concerns about personal finances.”
Although the majority of Americans have not yet begun to feel the full effects of President Donald Trump. Retailers, at the moment, are changing their supply chains and storage strategies, which can lead to shortages of items such as toys and festive decorations.
According to Lupine Skelly, Retail’s Retail, Comprehensive Research and Distribution Leader, Helping Holiday Costs – Think Santa Pictures in supermarkets and The Nutcracker Tickets – on the chopping block.
Gifts? It is very safe.
“People are saying, ‘I’m willing to cut back here. Let’s see what I can do to keep donations up,'” he adds.
Indeed, most people plan to spend the same amount of money on gifts they did last year, according to a Gallup Poll released Tuesday. Trends vary by generation and income, but the Per-Personal average has fallen to an average of $1,007.
“People are still in the ‘Don’t wait’ mentality,” says Dana Bodine, Phrice President of Marketing at Trustpilot. “What I’m thinking IS Completely changing the consumer shopping journey. “
And that perfect lead to…
Forget the elves. AI will help you shop
When money is tight, buyers get creative. Gen Z, the one age group that plans to cut back on vacation spending, is “looking for deals and looking for ways to make vacations happen,” Syelly said.
So in addition to comparing and evaluating product recommendations, they call for the big guns: artificial intelligence.
PayPal found that 61% of Zers Zers (born between 1997 and 2012) and 57% of Millennials (1981-1996) have used AI in the past year, and they’re not stopping anytime soon. Adobe predicts that AI traffic to retail sites will jump 520% this holiday season.
Skelly says we’ll see people use AI to make gift lists, get ideas, stick to budgets and get the best deals.
And Bodine says we’re in an agentic marketplace, acting as a personal virtual shopper. All you have to do is tell the Ayi Chatbot, “Hey, I’m shopping for my friend Dana. She owns a subaru. She needs to spend xyz.” If you can find XYZ at that price, please send it to my house. “
People are looking for new ways to pay (later)
There are some troubling ways to show up where it really pays to go shopping for vacations. July found that 27% of Millennials run up credit card debt to cover their vacation expenses, while 40% of Gen Zers are ready to spend their money.
It shouldn’t be this way. In the face of financial uncertainty, “consumers are saying more than ever,” Bergh said. This means combining discounts, incentives (free shipping), cash back and loyalty points to stretch their dollars.
“This season, bundling deals isn’t a hack — it’s the new normal,” he adds.
Consumers also rely on buy now, pay later, or Bnpl. PayPal found that half of people surveyed intend to use Bnpl for their holiday shopping.
Although popular, the payment method comes with a whole host of benefits and advantages. On the other hand, Bnpl can make big-ticket purchases cheaper by throwing in lots of useless pieces. On the other hand, it can tempt you to overspend, stash money and accumulate debt.
It is common for BNPL users – especially low income and youth – to miss payments and have multiple Bnpl loans going at the same time. To avoid getting into a financial cycle of misfortune, you will need to smoke.
“The best move you can make now is to go ‘Buy Now, worry’ about the Mindset of the plan and get the ‘Strategy,'” Bergh said.
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