What to Expect for the 2025 Holiday Shopping Season
Key Takeaways
Inflation will certainly impact shoppers’ holiday budgets, but Gen Z is least willing to compromise: Just 15% of these young adults said they would cut back on holiday shopping because they need that money for other things, versus 34% of the general population.
Gen Zers are least bothered by seeing holiday items in stores early, something that irks older generations. Younger consumers are also more game for holiday events in stores, even before Halloween.
Getting all shoppers, especially younger ones, into stores early is critical as shoppers use store merchandise as their primary source of gifting inspiration.
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It’s difficult to predict the state of the consumer economy in any condition, but tariff policies disrupting retail operations, the 2025 season is even harder to forecast. Consumers haven’t seen the full effects of tariffs yet, but the potential for supply issues compounded with higher prices does not bode well.
Retailers, of course, will do their best to avoid raising prices, as doing so risks shopper loyalty. Though, some consumers are more tolerant of modest price hikes. The holiday spirit can also counter bad vibes. Shoppers want to spend more time soaking up the joy retailers can offer in store experiences and celebrating with family and friends, which is a great excuse to splurge. Data from the 2024 holiday season offers insight into how shoppers reacted to higher prices, earlier promotional periods and retailers’ efforts to bring the joy to stores.
Inflation impacted almost everyone’s holiday spending
Last year nearly 7 in 10 (69%) consumers said that inflation was impacting their holiday spending “a lot” or “some.” Higher income households were, of course, least likely to express this sentiment. Asked to specify how inflation was most impacting their holiday shopping, a plurality (36%) said they were spending about the same as usual but getting less for it. An additional 34% of respondents said that they are spending less on holiday shopping than usual because those funds are needed elsewhere in their budgets.
Baby boomers and low income households prioritized non-holiday spending due to inflationary pressure
Still, some groups were less willing to compromise than others, specifically Gen Zers and consumers in higher income households. Both groups said they would spend more than normal to accommodate inflated prices for holiday goods, and were least likely to say they would cut back on holiday expenses because their normal budgets needed the padding. Expect this trend to continue this year as Gen Zers and high income individuals have maintained their heightened discretionary spending through 2025 to date. Of course, finding a good deal is still a priority for many. Shoppers who hoped to spend less last year said they would rely more on sales, in addition to buying fewer gifts.
Gen Zers are happy to see holiday items in stores before Halloween, and game for in-store events
While a plurality (34%) of respondents said they do most of their holiday shopping in December, consumers will see holiday items in stores months before that. Cue the grumblings. The retail holiday season seems to start earlier every year as stores try to capture as much spend as possible, especially when we know consumers are watching their wallets more than usual.
But, each generation cares about seeing holiday items in stores in October or earlier less than the one before. Just 18% of Gen Zers said stores put holiday items out too soon last year, versus 60% of baby boomers, a whopping 42 percentage point gap. Whether they like it or they just grew up with it, Gen Z isn’t bothered seeing Christmas inventory before Halloween.
Gen Zers aren’t bothered by early holiday shopping in stores
Gen Zers and millennials are also likely to shop earlier than older generations. Last year they saw higher representation among those who had begun their holiday shopping by mid-October, a trend we’ve observed for a few years.
These younger adults are also game to attend in-store events and use services like gift wrapping and personal shopping. Gen Zers reported more retail event attendance in the 2024 holiday season than other generations (60% attended some kind of event), with millennials not far behind at 54%.
Holiday shoppers want to see more gift wrapping services and in-store events
Among shoppers who did attend early holiday season events in 2024 (before Halloween), food and drink events in stores were the most popular, followed by Santa experiences and pop-up shops. Santa experiences become more popular later in the season. IRL events are effective to encourage repeat store visits, especially among loyal customers and those willing to spend more. Retailers should plan for events early and often for the 2025 season.
Gift inspiration comes from everywhere — but especially stores
Investing in those in-store events early is crucial, as shoppers depend on stores to gather inspiration for gifting. This is particularly important for Gen Zers and millennials, who get more gift inspo in stores than other generations. Millennials also depend heavily on e-commerce sites for gift ideas.
Stores are the top source of gift inspiration for holiday shoppers
Gen Zers are also likely to take inspiration from others, both peers and influencers online. As this group starts their shopping earlier, activating those influencer partnerships should happen sooner than later in the holiday season.
While we don’t have a crystal ball, we can predict that this holiday season will see another year of financial caution among shoppers. But, the holiday season historically offers permission to spend, especially for young people, and bringing some sparkle to store experiences is critical to capture the dollars shoppers are willing to part with.
