On the one hand, sentiment surveys paint a picture of a financially stressed customer. Nearly half of Americans (47%) say they worry they won’t be able to afford gifts this year, according to research from Narvar, a post-purchase platform provider. Two in three plan to cut back. Deloitte predicts a 10% decline in average individual holiday spending, and PwC estimates the decline at 5%. Additionally, 44% of middle-income consumers say they are worse off financially than they were a year ago, according to the University of Michigan.
Dig deeper: Online shopping in the US is expected to reach a record $253 billion
But the predictions on a large scale? They tell a completely different story. Mastercard, Visa, Adobe and the National Retail Federation all expect U.S. retail sales to grow between 3.6% and 4.6% year over year, with e-commerce expected to reach a record $253.4 billion.
The truth is that both views are technically correct. And that disconnect is exactly what marketers need to navigate.
Rising sales, shrinking shopping carts
Let’s start with the math. Most of that expected growth is nominal and not real. In other words, shoppers spend more because things are more expensive, not because they fill up their shopping carts.
Inflation, combined with new tariffs on categories like electronics and clothing, is driving up prices. Visa’s forecast shows a 4.6% increase in revenue, but only 2.2% of that is actual growth in goods sold. The rest is just higher prices.
Meanwhile, Catherine Dummitt, VP of Marketing at Narvar, sees that tension playing out in consumer behavior.
“The holiday shopper of 2025 isn’t just browsing; they’re budgeting and being smart about it,” she said. “That mentality changes everything. In a cautious economy, consumers are scrutinizing where their money goes and who they trust with it.”
Wealthier households keep things going
The other big reason overall revenue is expected to rise? The richest households are still spending – and they account for the majority of holiday spending. The gap between the haves and the have-nots is widening and marketers need to be aware of it.
Dig deeper: How to turn holiday shoppers into loyal friends, not one-time buyers
According to Deloitte, consumers earning more than $100,000 represent 60% of expected holiday spending. They’re not pulling back as much, and in many cases they’re still spending on discretionary items. That masks the deep cuts from younger and lower-income customers – such as Gen Z, who expect to spend 23% to 34% less than last year, according to Deloitte.
“This group tends to be younger: 58% are 44 or younger, and many have children at home,” Dummitt says. “Most live in households earning less than $100.00 a year, and they are even starting their holiday shopping earlier than average, making informed choices.”
Winners and losers in the holiday basket
Despite all the tightening, some categories are still expected to perform well, especially those that align with cultural trends or are fueled by wealthier buyers. Think in-demand electronics, gaming consoles, toys and viral fashion brands. Adobe’s forecast puts it in the growth category.
However, traditional discretionary retail, such as clothing and home goods, is taking a hit. According to Deloitte, average spending on retail goods is expected to fall 14% year-over-year, with shoppers trading up on expensive items or skipping them altogether.
But that doesn’t mean people skip the holidays, far from it.
“Consumers are thoughtful, engaged and paying close attention to value,” Dummitt said. “But they’re not skimping on the joy, they’re just being smarter with their spending.”
What marketers need to change – fast
What does this mean for holiday marketing teams?
For starters, urgency-heavy language like “don’t miss it” or “last chance” can backfire. “The holidays are still buzzing, but the sentiment has changed,” Dummitt said. “Many consumers are feeling cautious and not worry-free, and the tone needs to evolve with that reality.”
Instead, she suggests switching to messages rooted in support and reassurance, such as “Easy gift giving” or “We’ve got your back.” But messages alone are not enough.
Dig deeper: Your holiday marketing playbook should prioritize sincerity over sales
“Messages of support are more effective when they are accompanied by meaningful actions such as flexible returns, clear delivery guarantees or protection if something goes wrong,” she said. “These are not just logistics. These are confidence signals.”
In a year when so many shoppers are feeling financially pressured, small moments of reassurance are important. Especially as concerns around porch piracy, late deliveries and unclear returns policies grow, brands that overpromise and underdeliver will quickly lose customers.
“When budgets are tight, the loss of a single package is not just an inconvenience, it’s a financial setback,” Dummitt said. “These questions weigh heavily on consumers’ minds and have a direct impact on where people shop.”
Early birds, higher stakes
Marketers must also recognize that the traditional shopping window is no longer aligned with consumer behavior in the fourth quarter. Shoppers started early: According to research from RetailMeNot, 73% have started shopping before Cyber Week, with almost a quarter of their budget being spent before November even starts.
That means campaigns launched last week may already be too late to capture consumer attention.
Dig deeper: Shoppers expect fewer discounts this holiday season
It also means that expectations are higher. Consumers want free shipping, BNPL options and easy ways to check out. They expect real-time updates and immediate order confirmations. When something goes wrong, they want a solution – not excuses.
“Compared to last year, the margin for error is smaller. Loyalty is harder to earn and easier to lose,” Dummitt said. “The brands that exude trust, from product page to doorstep and beyond, will turn one-time buyers into permanent customers.”
Lead with confidence, without noise
This season, the brands that win won’t be the loudest, but the most reliable.
“This season calls for messages based on value, empathy and simplicity,” said Dummitt. “It’s not about pushing harder; it’s about listening better. The brands that show they understand what matters most to people right now will stand out, not with volume, but with authenticity.”
So yes, sales could reach record highs. But don’t confuse that with enthusiasm. For many consumers, this holiday isn’t about buying more. It’s about buying better – and from brands they can count on.
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