Why it matters:
- While a record 202.9 million Americans shopped during the Thanksgiving weekend through Cyber Monday, according to the National Retail Federation, this year’s holiday season — when retailers generate a disproportionate amount of their annual sales — has illustrated the need for sharp pricing to lure deal-seeking consumers.
- 15% of consumers said they normally make a purchase via social media during the holidays, up significantly from prior years, according to a Simon-Kucher holiday shopping survey.
- AI and AI agents drove $3 billion in U.S. online sales on Black Friday alone, according to Salesforce, and conversion rates were eight times higher than social media referrals.
The shopping trends this holiday season illustrate the ongoing bifurcation of the economy, as spending remains steady among high-income shoppers while lower-income consumers seek bargains and cut back amid cost pressures.
Data from Black Friday weekend through Cyber Monday also show strong gains in social media-based purchases and the increasing use of artificial intelligence by both retailers and consumers. Consumers are also continuing to express increased interest in supporting small businesses and in buying health-related gifts.
A record 202.9 million consumers shopped during the five-day holiday weekend from Thanksgiving Day through Cyber Monday, according to the annual consumer survey released from the National Retail Federation and Prosper Insights & Analytics. That’s up from 197 million shoppers last year, providing some evidence that consumers remain confident despite pressures from inflation across a range of everyday cost-of-living expenses.
Ongoing uncertainty about the economy, employment, the direction of inflation and tariffs and their impact on cost-of-living expenses is yet another trend that will likely continue into the new year. Both retailers and researchers have observed that consumers are exhibiting more frugal behavior, shunning some discretionary purchases and focusing on more practical needs.
“We see that wallets have been stretched and more money is being spent on necessities versus discretionary items,” said John Rainey, Executive Vice President and Chief Financial Officer, Walmart, during a presentation at the Morgan Stanley Global Consumer & Retail Conference 2025.
Research from Simon-Kucher found that 35% of consumers said they expect to reduce their discretionary spending during the next 12 months, compared with 24% who said they expect to increase spending on discretionary purchases.
“With three out of four not planning to increase discretionary spending in the coming year, we may see a spending surge in late 2025, followed by a more restrained approach in 2026,” the company concluded in its Holiday Shopping Report 2025.
Following are five key takeaways from this year’s holiday season that stand to have an impact on business in the year ahead.
Holiday spending insight thus far: Winning in 2026 will demand precision pricing to serve economy weary shoppers
The trend toward a bifurcation of the economy has been evident for several months or even longer, exacerbated by lingering inflation and a weakening job market. This year’s holiday shopping season has illustrated the need for sharp pricing to lure deal-seeking consumers.
While affluent consumers drove visits to luxury categories, “lower- and middle-income consumers sought out deals to stretch their household budgets,” said R.J. Hottovy, Head of Analytical Research at Placer.ai, which analyzes retail store visits. “Retailers promoting smaller-ticket gifts under $100 appear to be the early winners this holiday season.”
Discount prices have also proven to be a lure for online shoppers, according to research from Adobe.
“U.S. retailers [have] leaned heavily on discounts this holiday season to drive online demand,” said Vivek Pandya, Lead Analyst, Adobe Digital Insights.
He said competitive deals led consumers to begin shopping online early, leading to a surge in online sales on Black Friday.
How consumers gravitate to digital platforms and make their purchasing decisions there continues to evolve, however, amid the increasing influence of AI and social media.
Consumers and retailers both leverage AI tools
Another key trend from this year’s holiday sales reports is the ongoing use of AI in shopping. Data from Salesforce revealed that the share of both global and U.S. web traffic from third-party AI platforms — such as ChatGPT and Perplexity — over the Thanksgiving weekend tripled compared with a year ago.
Salesforce estimated that AI and agents drove $14.2 billion in global online sales and $3 billion in U.S. online sales on Black Friday alone. A key finding in Salesforce’s research was that AI-referred traffic drove conversion rates that were eight times higher than traffic from social media platforms.
In addition, shopper use of AI service agents jumped 42% on Black Friday, compared with Thanksgiving Day, according to Salesforce, as shoppers turned to agents for more efficient customer service during the peak of shopping.
A November survey from FedEx and C Space found that 97% of retailers said they had planned to use AI to enhance the shopping experience this year.
“Retailers are expected to incorporate AI tools including chatbots for improved customer service, audience targeting, inventory management and pricing optimization,” the report said.
Salesforce estimated that AI and agents drove $14.2 billion in global online sales and $3 billion in U.S. online sales on Black Friday alone.
Social media-based research and purchasing increases
Social media also continues to play a larger role in influencing consumers’ buying decisions and providing platforms for completing their purchases.
The percentage of consumers who make purchases on social media platforms such as TikTok and Instagram is increasing significantly, according to Simon-Kucher’s holiday research. The research found that 15% of consumers said they normally make a purchase via social media during the holidays, up more than 2% from prior years. In addition, the report found that 28% of consumers said they explore trends on social media to find gift ideas.
The impact of social media influencers is especially evident among young consumers, according to a holiday shopping report from Epsilon. That report found that 44% of Gen Z consumers and 36% of millennials said they were likely to turn to social media influencers for holiday inspiration or shopping, while only 11% of Gen X consumers and 3% of Baby Boomers said they would do so.
And, while TikTok was by far the preferred social media channel for Gen Z, Facebook won out for all other age groups. Gen Z shoppers, however, were much more likely to use a variety of social media platforms, including YouTube, Pinterest, and Instagram, in addition to TikTok.
“To reach this generation, brands will need to ensure their message resonates across channels and tells a consistent story,” the Epsilon report said.
Patronizing Main Street businesses
Although some retail observers were cautious that small businesses would be under pressure from larger national retail chains offering better deals, Main Street stores appeared to have held their own during the holiday sales weekend.
Research from small business point-of-sale technology provider Quilt Software said its small merchants had a 4.4% increase in sales on Small Business Saturday (Nov. 29, the day after Black Friday), although traffic was flat with year-ago levels.
“The same number of shoppers from last year showed up, but spent more on average in 2025, and Main Street retailers generated more sales year-over-year,” Quilt Software said in a statement.
A consumer survey from AT&T Business found that more than three-fourths of U.S. consumers (77%) would complete all their holiday shopping at small businesses if they could. The AT&T Business 2025 Holiday Shopping Survey also found that 73% of adult consumers said they find better, more unique holiday gifts at small businesses.
Supporting local economies remains a strong motivator for consumers seeking to patronize local businesses, the research found. About two-thirds of consumers (67%) said they shop at small businesses to support the local economy, up 8% over last year’s survey.
Focusing on health-related gifts
Purchasing health-related gifts such as wearables and home fitness equipment also continues to gain traction and shows no signs of slowing for the holidays and the year ahead. The trend reflects the growing interest among consumers to take more control over their own health and wellness through diet and exercise, as well as increasing consumer buzz around wearables such as rings, bands and watches that track exercise, sleep patterns, and other biometric data.
According to the holiday SpendingPulse report from the Mastercard Economic Institute, spending on new health-related brands such as wearable fitness trackers, connected fitness applications, and outdoor fitness venues has been growing at about 30% year-over-year since mid-2023. These fitness brands have been growing in popularity as gifts, the research found: Last year 22.5% of total spending on health-related brands took place around the holidays, compared with 18% in 2018.
Wellness overall continues to gain in importance across all age groups, and is especially important among younger consumers according to this year’s Future of Wellness Trends survey from McKinsey & Company. The company estimates that wellness represents more than $500 billion in annual spending in the U.S. and is growing between 4% to 5% each year.
Nearly 30% percent of Gen Zers and millennials in the U.S. said they are prioritizing wellness “a lot more” compared with last year, the research found, compared with up to 23% of older consumers. The report attributed this trend to younger consumers citing higher levels of burnout and worse overall health compared with older generations, and to their increased exposure to wellness trends on social media.
The research found that several areas of wellness have retained their importance during the past few years, including women’s health, health at home, and biomonitoring, but others have also emerged more recently, including functional nutrition, healthy aging, appearance and aesthetics, in-person wellness services, weight management, and mindfulness.
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