Electronic PaymentsBlog

December 5, 2024

Holiday Shopping: Consumer Behavior in 2025 & What to Expect

Electronic Payments Team

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The holidays are quickly approaching, and for many business owners, that means the busy season is here. To help prepare you for what’s ahead, we’ve looked at consumer insights and holiday shopping trends for 2025. Read on to learn what the statistics say about consumer behavior this year and what you can expect based on the data.

What’s Special About the 2025 Holiday Shopping Season?

There are a few hot topics on consumers’—and retailers’—minds as 2025 draws to a close. How much will they impact your biggest business season? Here’s what researchers say:

Tariff Talk is Everywhere—But Inflation Has More Impact

Shoppers are thinking about tariffs; 85% expect higher prices this season as a result (NRF). But according to McKinsey’s research, that anxiety level has fallen over the course of the year, and the real top concern on buyers’ minds right now is inflation (McKinsey).

So, will tariffs (or inflation) impact your sales? Consumers are certainly expecting to see prices rise accordingly, but as we’ll see later, this might not impact budgets as much as you might expect.

A Short Core Shopping Season (Again)

Like last year, 2025’s core shopping season is relatively short thanks to a late-in-November date for Thanksgiving (the season can range from 27 to 33 days between Thanksgiving and Christmas). With only 28 days this year, you’ll need to wow holiday shoppers within a smaller window.

At the same time, what we traditionally think of as the “holiday shopping season” may not reflect modern buying habits accurately—more on that later.

AI Is Now a Major Factor

For consumers, trust in and usage of AI has grown significantly; 26% of those surveyed report trusting AI more now than they did six months ago, and the share of consumers planning to use generative AI to help them complete holiday shopping (through finding deals, summarizing reviews, and inspiring ideas) has more than doubled since 2024 to 33% (Deloitte).

McKinsey says this means retailers need to stay aware of trends, be ready to act fast to capture interest, and lean on AI themselves to stay on track.

Is this good or bad for small businesses? While AI tools are likely to suggest larger companies, consumers who specify they want to shop local may have an easier time finding you. Our advice is to make sure your Google Business profile is up to date and fully populated and to set aside time for social media posts that raise awareness of your business.

What to Expect From Consumer Behavior This Holiday Season

How do the statistics translate to your holiday season experience as a small business owner? Here’s our analysis based on market research from some of the industry’s biggest players.

A Longer Holiday Shopping Timeline

Half of small businesses will earn about 25% of their annual revenue during the holiday season (Forbes).

That’s a lot of sales compressed into a short time frame—or is it?

Multiple studies have shown the shopping season begins earlier now—two-thirds report starting their holiday shopping before Black Friday (McKinsey) and 42% plan to begin shopping before November (NRF)—but most shoppers (60%) still anticipate shopping into December, and 63% expect to wait until the weekend after Thanksgiving to do the majority of their shopping (NRF).

So while we have a short “core” season this year, buying behavior seems to be spread across more touchpoints than just the traditional Black Friday-to-Christmas channel. A significant number of consumers begin shopping in early fall, stretching out an otherwise stunted season.

Because of this, Black Friday and Cyber Monday remain critical points for retailers, but they no longer make or break your holiday season success (McKinsey). This means you have more opportunities to sell than you might have in the past—but it also means you’ll need to maintain momentum over a long period of time.

Spending Won’t Increase—But It Might Not Decrease, Either

With economic uncertainty fairly widespread—57% of consumers anticipate a declining economy over the next six months (Deloitte)—spending decreases seem logical. But McKinsey reports that the traditional tandem movement of sentiment and spending has changed; now, while consumers may worry about the economy, their spending remains the same.

This lines up with McKinsey’s data—that people plan to spend about the same amount they spent in past years— as well as the NRF’s—that projected spending has only fallen 1.3% since last year.

On the other hand, Deloitte reports that consumers expect to decrease budgets about 10% this year—34% for Gen Z—with about 70% of shoppers looking for deals and emphasizing value by prioritizing affordable stores, redeeming loyalty rewards, and making handmade gifts.

While the data is mixed, it does seem clear that spending won’t increase from last year (in most situations; per NRF’s findings, families with children expect to increase budgets by $30+).

It looks like retailers can anticipate similar or slightly lower spending compared to last holiday season, perhaps skewing lower if Gen Z makes up a larger portion of your buyers. To make up ground, you may need to increase appeal for younger audiences and look for ways to offer deals and great value—in your communications as well as your delivery, says McKinsey.

Practicality and Gift Cards Are Top Priorities

McKinsey reports that consumers are leaning towards gifts they believe their recipients need rather than simply want, and suggests that retailers try to find ways to either offer or frame offerings in a more practical light to follow this trend.

As in past years, gift cards dominate wish lists, with 50% of consumers ranking them as a top gift (NRF), one reason being that these offer a path around shipping costs (McKinsey). If you operate locally more than online, this insight might also help inform your marketing strategy this season; no shipping if you shop local!

Other top gifts, according to the NRF, include:

• Clothing/accessories
• Books/media
• Personal care/beauty
• Electronics

Top destinations include:

• Online
• Grocery stores
• Department stores
• Discount stores

A Data-Driven Holiday Checklist for Retailers

We’ve rounded up recommendations based on consumer data to help guide your holiday strategy:

• Keep your Google Business profile up to date so shoppers—and AI crawlers—can find you.
• Post regularly on social media to raise awareness and stay visible.
• Use AI tools for marketing, planning, and responding to trends.
• Offer or promote deals and highlight value.
• Frame or position products as practical gifts.
• Lean into “shop local” = “no shipping fees”
• Stock up and be ready to sell gift cards—these are 2025’s top gift, so this is key!
• Start marketing now if you haven’t already and keep up momentum until the season ends
• Find ways to appeal to younger generations, especially Gen Z.
• Strategize your inventory and staffing plan now to address the shorter “core” season.
• Capitalize on Black Friday and Cyber Monday—but don’t rely solely on them.

Happy Holidays!

Understanding consumer habits can help you strategize, make the most of this year’s trends, and position your business for a successful holiday season. While the 2025 holiday shopping season presents some challenges for businesses, we see plenty of opportunity, too. If you’re looking for tips on optimizing your store for the holidays, check out our guide to success on Small Business Saturday!

Haven’t stocked up on gift cards yet? Get branded cards and promotion materials via eGiftSolutions!

Holiday Retail FAQ: What Small Businesses Need to Know in 2025

How can small retailers use AI to compete with big brands this holiday season?

Use AI to automate time-consuming admin tasks and strategize smarter marketing decisions—but not to replace your personal touch. In a world that’s becoming more generic because of AI, being a small business with a real identity is a strong differentiator.

When should I start my holiday marketing—and how do I keep shoppers engaged all season?

Start promoting holiday content and offers now (if you haven’t already), and keep up consistent communication through the end of the year. Black Friday, Small Business Saturday, and Cyber Monday are still important events to plan for and participate in.

What messaging and offers appeal most to budget-conscious shoppers in 2025?

Offer deals, loyalty rewards, and gifts that solve a problem, last a long time, or make daily life easier. Gift cards are a strong choice: flexible, shipping fee-free, and great for return business.

How should small businesses prepare operations for a shorter holiday shopping season?

Make sure inventory, staffing, and online listings are ready before Black Friday, and consider adjusting hours and offers on key buying dates. Monitor sales and adjust quickly—your POS can boost sales by helping you restock fast-moving items and cut slow sellers before it’s too late.

What’s the best way to turn holiday shoppers into year-round customers?

Follow up! Capture emails at checkout, then send thank-yous, loyalty rewards, or post-holiday specials. Continue into January and throughout the year.

Electronic Payments, Inc. (EPI) is a privately-held payment processor, acquirer, and financial technology company that delivers innovative POS systems, merchant services, and integrated payment solutions to businesses nationwide. Backed by over 25 years of industry experience, EPI is known for its transparent partnerships, proprietary technologies—including Exatouch® POS, ProCharge®, and Cygma®—and exceptional 24/7 in-house U.S.-based support. EPI serves a wide range of industries, from retail and restaurants to service-based businesses and professional offices, and acquires new merchants through a national network of POS value-added resellers (VARs), agent banks, independent sales agents, and ISOs.

800-966-5520 | www.electronicpayments.com