It’s only September, but in many U.S. retail stores, the holidays have already arrived. The 2025 holiday shopping season is shaping up to be one of the most complex in recent memory — characterized by economic uncertainty, generational divides, and the rapid integration of technology across physical and digital channels.

All major forecasts point to positive but softer growth. Deloitte projects U.S. retail holiday sales to rise between 2.9%–3.4%, Mastercard sees 3.6% growth, and Bain expects 4% growth. Ecommerce remains the bright spot, with most forecasts calling for 7%–9% online growth, outpacing brick-and-mortar sales.

So what should retailers expect — and how can they prepare?

Pre-Holiday Signals: Retail & Technology Trends

Through August 2025, U.S. retail sales are up just 1.8% after adjusting for inflation. Online remains the engine of growth, followed by specialty soft goods, while department stores, electronics, and restaurants lag.

On the technology side, AI is set to transform holiday shopping:

39% of Millennial and Gen Z shoppers already use AI search in stores.

44% of U.S. shoppers trust AI recommendations.

AI and agentic AI are projected to generate $260B in global online sales and $1.6T in-store this holiday season.

By year-end, a third of global retailers will be using AI agents for productivity.

In short: AI isn’t a buzzword anymore — it’s a core driver of consumer journeys and retail efficiency.

What’s Hot (and What’s Not) This Season

Not every category will benefit equally.

Expected winners:

Ecommerce

Health & personal care

General merchandise

Clothing & accessories

Expected laggards:

Department stores (flat to 2024)

Electronics & appliances (declines expected)

DIY retailers

Notably, physical store visits are up to 36% this year from 24% in 2024, while pure ecommerce declines from 34% to 26%. Shoppers want seamless omnichannel journeys — not an either/or choice.

The Generational Divide

Consumer confidence is splitting sharply by age group:

Gen Z: Facing financial strain, their average holiday spend is expected to drop 23%, with more focus on resale, upcycled products, and wellness-driven purchases. Nearly 40% of their budget goes to self-gifting.

Millennials: Spending flat (down just 1%), balancing cost pressures with peak earning years.

Gen X & Baby Boomers: More resilient, with Boomers planning a 5% increase in spending.

This means retailers need segmented strategies — what resonates with Boomers (trust, quality, service) may not sway Gen Z (value, sustainability, social proof).

Timing the Holiday Rush

Holiday shopping is starting earlier than ever:

September and October are gaining momentum as shoppers look to spread out purchases.

Nearly 80% of gift budgets will be spent by Cyber Monday (December 1).

Still, the five days between Thanksgiving and Cyber Monday will account for approximately 40% of total gift spending.

The top shopping days of 2025 (U.S.):

Black Friday

Super Saturday (Dec 20)

Sunday, Dec 21

Cyber Monday

Saturday, Dec 13

Key Shopper Priorities in 2025

Across surveys (PwC, Salesforce, Bazaarvoice, Mastercard), three themes emerge:

Value first – 78% of consumers are looking for lower-cost options; tariffs could cut gift spending by another 10%.

Trust matters – 50% of shoppers now check reviews for authenticity, and acceptance of AI-generated content has dropped from 33% to 20%. Shoppers want authentic human voices, not automated filler.

Omnichannel harmony – With 51% shopping online marketplaces and 53% in physical stores, the winners will be retailers who make the experience frictionless across both.

Why This Matters for Retailers

Holiday shopping in 2025 feels less like a steady rhythm and more like jazz: improvisational, fast-changing, and shaped by economic headwinds. Market research shows that while consumers are cutting back, they’re still prioritizing traditions, family, and value.

For retailers, the imperative is clear:

Personalization through AI and real-time insights.

Authenticity in content, creator partnerships, and reviews.

Value-driven messaging to appeal to budget-conscious shoppers.

Omnichannel excellence to meet consumers wherever they choose to shop.

Spending may dip, but celebration endures. Holiday 2025 will be defined by value, trust, and intentionality. Brands that tune into these consumer signals now won’t just win December — they’ll build loyalty that lasts long after the lights come down.