Over the last several weeks, we’ve learned a lot about holiday sales, including that online sales are expected to climb and that consumers have changed their shopping behaviors and plan to spend more.
These positive outlooks are underscored by the National Retail Federation’s (NRF) annual holiday forecast, predicting retail sales in November and December will grow between 3.7% and 4.2% over 2024. Total spending will land between $1.01 trillion and $1.02 trillion—the first time holiday sales will pass the $1 trillion mark. (The NRF has stopped separating online sales from in-store sales since most consumers are now “channel agnostic.”)
Consumer Sentiment
Despite the tumultuous state of the national economy, “American consumers continue to drive U.S. economic activity,” says NRF President and CEO Matthew Shay. He adds, “We remain bullish about the holiday shopping season and expect that consumers will continue to seek savings in nonessential categories to be able to spend on gifts for loved ones.”
However, the NRF reports that consumer sentiment is at low levels. In fact, it’s the lowest level of consumer sentiment for the last 45 years (1980). Concerns include softening job and payroll growth, inflation, and tariffs.
Tariffs Could Add $10.3 Billion to U.S Online Shopping Costs
Digital Silk just released a new study showing how recent U.S. tariffs could quietly add up to $10.3 billion to Americans’ online shopping in 2025. The study examines how this could affect consumers.
According to analysis by the Federal Reserve Bank of St. Louis, tariffs have increased overall U.S. consumer prices by about 0.87 %. Digital Silk says if the same price effect extends to e-commerce sales, it would mean about $10.3 billion in additional costs for online shoppers this year. This is in addition to rising delivery costs.
Digital Silk adds that if retailers account for normal margin adjustments in addition to increased shipping costs, the impact may likely be closer to $15-$16 billion, or $55-$60 per shopper.
Consumer Holiday Spend
The 2025 Consumer Spending and Saving Behaviors: Holiday Spending report just released by the Bank of America Institute, reveals that Black Friday remains the most popular time for holiday shopping, with 25% of consumers shopping that day. Among Gen Z, 41% plan to make most of their purchases on this day, up 36% from 2024.
But the study warned retailers that consumers’ holiday budgets will be under pressure. To cope, 58% of consumers plan to spend the same on their holiday expenditures, while cutting back on other costs.
The financial strain is evident. Due to the economic environment:
- 62% of consumers anticipate feeling financially strained by holiday expenses
- 58% holiday gifts feel more expensive this year, due to inflation (62%), tariffs (58%), and companies prioritizing profit (33%).
- 68% say pricing is the most important factor influencing their holiday purchases
Other purchasing factors include convenience, such as fast shipping, easy access, and one-click payments (39%), earning loyalty rewards (22%), and social media trends/influencer recommendations (18%).
Using AI as a Shopping Consultant
The Bank of America study reveals that half of consumers plan to use AI to support their holiday shopping this year, with Gen Z leading the way at 71%. How?
- 28% to compare prices and deals
- 23% for gift ideas or inspiration
- 19% to track spending or stay on budget
- 16% to write gift messages
Online Shopping Dominates
While most shoppers (92%) plan to buy online, in-person shopping is making a comeback, with only 14% planning to exclusively shop online.
Social shopping is strong as well—32% of Gen Z (32%) and 28% of millennials are more likely to be influenced by social media compared to the general population (18%). More than half of Gen Z (55%) and millennials (52%) plan to buy gifts directly from social media.
A separate holiday survey from the NRF shows consumers plan to spend $890.49 per person on average this year on holiday gifts, food, decorations, and other seasonal items—the second-highest in the survey’s 23-year history.
Consumers will spend $627.93 on gifts and $262.56 on seasonal items like food or candy, decorations, and greeting cards. The NRF survey also indicates that most consumers (55%) plan to shop online.
Retailers can get more information at NRF’s Winter Holiday FAQ and Winter Holiday Headquarters.
Gift Cards
The NRF survey shows the top gift request is gift cards. And Gift Card Trends: Consumer Preferences & Behaviors, a report from Bank of America, reveals that gift card demand is increasing—23% of consumers plan to spend more on gift cards this year.
Overall, 81% of consumers have bought a gift card this past year, led by millennials and Gen X. Most consumers (63%) prefer to buy gift cards with themed designs rather than store-branded ones.
And while most people would rather buy a physical card, many want the option to buy a digital card.
Happy Holidays
As this series of reports on holiday shopping has shown, retailers are poised to enjoy a strong holiday selling season, despite the shaky economy. Remember, though, that there are financial pressures on American consumers and they’re looking for value and convenience when deciding where to shop.
Rieva Lesonsky is President of Small Business Currents, a content company focusing on small businesses and entrepreneurship. You can find her on Twitter @Rieva, Bluesky @Rieva.bsky.social, and LinkedIn. Or email her at Rieva@SmallBusinessCurrents.com.
Photo courtesy Getty Images for Unsplash+
