Holiday Shopping 2025: The Impact of Tariffs, Tech, and Changing Behavior

With holiday shopping underway, retailers and consumers alike are entering a season influenced by economic uncertainty, rising tariffs, and evolving shopping habits.

Dan Rice, LSU marketing associate professor and director of the E. J. Ourso College of Business Behavioral Research Lab, shares insights on what’s changing, what’s driving spending trends, and what to watch for as we head into the end of the year.

What do you expect for holiday shopping trends this year?

Like most other years in recent history, most of the bodies forecasting holiday spending are predicting increases in total sales. The National Retail Federation (NRF) is predicting a growth rate of 4%, with sales totaling over $1 trillion. Other bodies like Simon Kucher, a pricing consultancy, project increases of over 7%, and Visa was projecting roughly 10% raises in gift spending. While these figures always vary between entities due to different specific formulas, it appears that some of the higher numbers were released earlier in the year, suggesting that later numbers may be reflecting a more up-to-date market forecast.

Interestingly, this projected increase is happening despite many bodies, including the NRF, suggesting a decrease in planned per person spending. This suggests that the population growth of consumers might explain the increase in total sales for retailers, even if there’s a true decrease per person.

We may also begin to see the impacts of tariffs on pricing in the holiday shopping season. This is supported by the Visa report, which suggests real spending growth of 2.2%, indicating that fewer items are being purchased despite revenue increases.

What’s different about this year compared to previous holiday seasons?

There have been several fairly unique situations.

First, we’ve had the recently ended government shutdown, which impacted a lot of people and created a large degree of financial pain. Whether and when missed paychecks are made may still be unclear, and that has added a lot of concern for consumers.

Additionally, the extensive but confusing levying of various tariffs has put the U.S. at an overall effective tariff rate of nearly 18%, the highest since 1934, according to the Budget Lab at Yale University. That adds substantial amounts to consumer costs and concerns, with 74% expecting tariffs to impact their shopping, according to Nerdwallet. We’re also seeing decreased enthusiasm for the holiday sales, particularly within certain demographic groups.

How might the current economic climate affect consumer spending this holiday season?

This is where we start to see the effects of what some might call a “two-tier economy.” The higher spending might be driven by the more affluent consumers who are more financially sound, while other data suggest that as many as 1 in 4 households are living paycheck to paycheck, making increased spending for them unlikely.

We’re also seeing projections for certain demographic groups at much lower spend projections. Nearly 20% of the population intends to spend less, according to Visa. PWC is projecting spending declines of 5%, and GenZ responses indicate a 23% drop in planned spending.

But there are many ways you split segments. People who are concerned about tariffs are planning to spend 10% less, according to PWC. People with kids will tend to spend more than last year, while people without kids will spend less than last year, according to NRF projections. So, it really does come down to individual-level financial and other factors. This may very much be a situation where the affluent drive the average numbers. 

How have consumer behaviors during the holiday season shifted in recent years?

Well, we’ve seen more and more people shifting to online sales and that is expected to continue. Ironically, of the five days between Thanksgiving and CyberMonday in 2024, only one of those days (Saturday) had more in-store than online sales.

We also continue to see people buying earlier and earlier for a variety of reasons, ranging from staying within monthly budgets to simply wanting to finish shopping earlier to enjoy the holiday. 

How is the balance between online and in-store shopping evolving, and what strategies should retailers adopt?

It’s really always about making the shopping experience fit the needs of the consumer, trying to make the selling process as frictionless as possible. If they want to order online and pick up in store, make sure that’s available. If they prefer fully online with home delivery, make it convenient, etc. With all the worry and concerns  that consumers are facing this year, I think Deloitte hit the nail on the head with their statement, “For retailers, this holiday season isn’t just about offering deals; it’s about meeting shoppers where they are—digitally, socially, and emotionally.”

Are any new shopping trends emerging for 2025 based on recent NRF or Deloitte data?

One that has been picked up on by Deloitte, among others, is the tendency of certain (generally younger demographics like Gen Z in particular) to start using AI-based tools and social media not only for gift ideas, but also to find the best prices. Internet searches for “discount” and “coupon” codes are up 11% according to PWC, suggesting many consumers are concerned about saving money. 

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