Shoppers kicked off the first half of 2025 with the same energy as they did in 2024 – cautious, calculated, and weary of looming economic challenges. The first quarter’s sales results reflected this mindset.
Online sales were essentially flat as consumers continued to wait out price and economic volatility. According to research by Salesforce, 51% of shoppers reported that they’re currently prioritizing essentials and 49% are pulling back on splurge purchases, a trend reported in 2024 and continuing into the new year.
The question on everyone’s mind: Is this a sign of the holiday season to come? Early Salesforce data indicates that consumers may be turning a corner. Thirty-four percent of global consumers reported that they are feeling optimistic about the current state of the economy — that’s a 22% increase over April 2024. When it comes to personal finances, 27% more consumers reported that their financial situations were improving over the last six months. Another exciting trend we’re seeing shift is where consumers are spending their disposable income. For the past 12 months consumers have ranked savings and investments as the top place they were parking their money. But now that’s changed. Consumers are now saying that they’re back to prioritizing spending their disposable incomes on physical goods, followed by savings, with experiences last.
Despite these positive signs, consumers are still cautious. One in three shoppers still report that they’re buying less over the past six months, and 66% of all shoppers say that — regardless of whether they’re buying more, less, or the same — they’re trading down for lower priced goods. Nonetheless, that’s a 22% decrease from 2024 in the rate of consumers reporting that they’re making tradedowns. Additionally, the rate of consumers reporting that they’re now buying more grew by 54% over 2024.
There is more good news, though. In this era of economic uncertainty, there is also incredible opportunity for consumers and retailers alike, thanks to AI. From generative AI services going mainstream back in 2023 to AI agents today, the way consumers interact with the internet and the way that retailers operate is changing very rapidly. All of this new change is ushering in a new wave of how brands and consumers interact with each other.
So what does holiday 2025 look like in a time of increasing economic pressure, rapidly changing consumer optimism, and artificial intelligence?
Our 2025 holiday shopping predictions:
- Hyper-personalized product discovery is here
- AI agents will boost employee productivity
- Unified commerce experiences will supercharge online and offline sales
- Trade uncertainty will push shoppers to resale, as promotions are cut back
- Price and quality will drive loyalty
Let’s take a closer look at the data, along with our top tips for your most wonderful time of the year.
The way people shop is evolving quickly. According to research by Salesforce, 5% of all shoppers now start their product search with AI chat assistants (like ChatGPT, Perplexity, Gemini, Meta AI, Grok, etc.). For Gen Z consumers, that number jumps to 10%. Additionally, 39% of shoppers report using an AI chat at some point during their shopping journey. Even major browser providers are reporting that users are opting for these new age search tools over traditional search. Why are shoppers leaning into these tools? Because it gives them the best personalized product recommendations.
These tools are no longer just helpful add-ons or meme-makers, they’re becoming the bridge between customers and brands, powering a new era of hyper-personalized, real-time shopping experiences. Fifty-nine percent of shoppers using AI chat services for product recommendations expect to use these tools to help them find gifts for friends and family this holiday. And they trust these recommendations too, with only 21% of consumers reporting that they distrust the recommendations from these tools. And they’re not just using them in the digital world. Thirty percent of global consumers report using an AI chat assistant while shopping in brick-and-mortar retail stores. And for Gen Z and Millennials, that number is over 40%.
Consumers now expect recommendations that take their needs into account, conversations that feel human, and support that’s available on their terms wherever and whenever they need it. For retailers, this shift presents both a challenge and a massive opportunity. The brands that embrace AI as a strategic partner in customer engagement will be the ones that stand out, and win, this holiday season.
This holiday season, we predict that $260B in online sales and $1.6T in in-store sales will be driven by shoppers discovering products through AI-powered recommendations.
What you can do: Evaluate where you’d like your brand to show up when it comes to AI chat assistants. As the chat assistants get more popular, customers will come to expect this kind of personalized one on one shopping experience. Drive conversions and loyalty with a guided shopping agent on your own site that guides shoppers through discovery and provides personalized product recommendations.
AI isn’t just disrupting the shopper experience, AI agents are poised to improve the employee experience as well. In an age where budgets are shrinking and margins are tightening, helping your workforce become even more effective is paramount. What are AI agents? AI agents are like AI-powered coworkers that can operate independently, without human intervention, and make decisions based on all the available data and their trained parameters.
Research by Salesforce shows that retailers are increasingly leveraging AI agents to revolutionize both customer-facing interactions and backend operations. For customers, AI agents provide highly personalized shopping experiences by analyzing browsing history, purchase patterns, and even real-time shopping signals to offer tailored product recommendations, answer intricate questions, and guide them through the purchasing journey with a conversational interface. On the backend, AI agents are already redefining productivity. Today, agents are helping with inventory management, dynamic pricing, optimizing supply chains, providing real time fraud monitoring, streamlining order fulfillment autonomously, among many other tasks.
This holiday season, we predict that 35% of retailers will be using agentic AI to boost their workplace and employee productivity.
What you can do: The first step in launching an effective agentic AI strategy is to get your data prepped and connected. Ready customer data for trusted and secure access by breaking down data silos and harmonizing data across applications.
While digital channels had a meteoric rise over the last 5 years, physical stores remain the dominant retail sales channel, accounting for a remarkable 83% of all retail sales in 2024. That being said, it doesn’t have to be an either/or scenario. Shopping journeys are becoming incredibly complex, scattered, and disjointed. In fact, according to research by Salesforce, the average shopper interacts with a brand nine different times before making a single purchase. In just the last three months, 80% of consumers have made at least one purchase in a store, 83% online, and 24% on a social media platform. It is now critical for retailers to facilitate a seamless shopping experience that transcends individual channels, devices, and locations, allowing consumers to interact with their brand fluidly.
The holiday season is an especially important moment for brick-and-mortar stores. While Cyber Week has been hallmarked as a digital shopping event, consumers are still headed to the store. When asked where shoppers will buy this upcoming holiday season, the number one response across all generations was brick-and-mortar stores, followed closely by online marketplaces. In fact, 79% of holiday shoppers report that they will be shopping in store this upcoming holiday season, while 78% will be shopping across online marketplaces. Even three in four Gen Z shoppers will be hitting up stores this year. In fact, on the most important shopping days of the year shoppers prefer the store. Fifty-one percent of shoppers report that they still prefer to shop in store on Black Friday, up from 31% in 2024. Gen Z is leading that trend with an incredible 65% reporting their in store preference for the major deal event. That puts them way ahead of the 30% of Baby Boomers who reported a preference for brick-and-mortar Black Friday shopping.
Why are the youngest generations gravitating to brick-and-mortar? Immediacy, experience, and product discovery are the top three factors driving shoppers to stores. Seventy-two percent of Gen Z shoppers report being able to get their products immediately as their top reason for choosing the store, beating out all other generations in the need for speed. Meanwhile, 42% of Gen Zers like to touch and feel the merchandise before purchasing and 28% reporting it’s easier to browse and discover new products in store.
Why is this important? Understanding how and where shoppers are buying lets retailers meet them where they are, with the right experience tailored to each channel. Most importantly, in this new era of AI-led shopping, having a solid, unified commerce strategy is crucial to ensuring AI-driven, personalized experiences are supported by real-time inventory and consistent data across all channels. Without it, the promise of AI-enhanced personalization falters due to fragmented information and inconsistent service. And in an age where the youngest consumer generations are calling for more choice and diversity in where they shop, the stakes are even higher.
This holiday season, we predict that for every $1 that Gen Z spends online, they will spend $3 more in-store this holiday season, making brick-and-mortar a critical channel for success with younger generations.
What you can do: While the youngest shoppers prefer to shop in store, they are the most likely to be discovering and researching across many digital channels. Enable your audience to shop your brand, not your channels by having a robust omni-channel strategy. This is not just an advantage, but a necessity to cultivate loyalty and capture market share.
Supply chain uncertainty has dominated headlines since 2020, but in 2025 tariffs are putting even more pressure on retailers and consumers alike. Tariffs are squeezing already tight margins for retailers. The ending of de minimis and looming price increases are putting consumers on notice as the already cost-conscious population is finally feeling some optimism. But it’s not just pricing that’s top of mind. Tariff showdowns are likely to cause inventory shortages later this year as retailers cancel orders and shifting supply chains send shockwaves to product availability.
Despite tariffs, consumers are used to pivoting their buying behavior due to volatility in the supply chain. It wasn’t long ago that first, middle, and last-mile supply chain issues put the holiday season in flux year after year. This year is no different.
When asked how tariffs are impacting their purchasing habits, 40% of global shoppers said that they’re just buying essentials right now while they wait out the trade implications. Another 26% said that they’re holding back on splurge purchases. In the US, 43% of shoppers are reporting a doubling down on essentials, while 32% are stocking up on the items they need before price changes go into effect. Nonetheless, despite the noise, 23% of global shoppers are not making any changes to their buying habits right now, driven by the much more economically-resilient Baby Boomer generation and high-income earners in general. But one thing is absolutely clear, the average shopper is paying attention and they’re making changes.
What does this mean for the holiday shopper? They’re going to be looking for ways to get the gifts they want at the best price possible. One way they’ll get those low prices is by waiting. Seventy-six percent of shoppers report that they’re waiting for Cyber Week to make big purchases this year. This is up from 67% of shoppers who reported waiting for Cyber Week deals last year. The second way shoppers will seek better pricing is by turning to resale. Seventeen percent of shoppers report that they’re turning to resale items as a way to combat tariff volatility. And it’s not just for their everyday needs. Forty-six percent of shoppers report that they are planning on buying a previously owned item in order to give as a gift over the next six months.
Why the draw to resale? Sixty-eight percent of shoppers say that gifting resale allows them to save money, while 35% report it allows them to practice sustainability and reduce waste. In fact, pricing and sustainability were the top two reasons why shoppers are choosing resale across every single generation. Meanwhile, product availability came in third as inventory scarcity continues to weigh on shoppers.
This holiday season, we predict that shoppers will spend $64B on resold merchandise as they look to cut costs and reduce waste. In response to rising supply chain costs, season promotionality will scale back as 2% fewer orders will transact with a promotional code.
What you can do: Review and adjust your pricing strategies, negotiate with suppliers, enhance supply chain visibility, and optimize fulfillment without compromising the customer experience. Take a long-term approach to protecting profit margins in these market conditions, rather than opting for quick fixes.
Attracting and retaining loyal customers is a continuous process that retailers spend years building, perfecting, and evolving. What drives customer loyalty has changed drastically every single year since 2020, and that trend continues. As budgets remain tight and uncertainty looms, shoppers will be turning to brands and retailers that deliver what they need. This year, loyalty will be defined by two main things: price and quality. Price sensitivity has been top of mind for some time now as consumers battle inflation. When asked what factors will influence their decision to buy from one retailer over the next in 2025, free delivery and lower prices are at the top of the list. A new factor, however, has snuck in under the radar—product quality—as the third most important factor.
Why product quality? Since Salesforce has been tracking this metric, product quality hasn’t reached the top of the list since the Covid era, when consumers had more buying power. In 2025, it’s back to the top. For those watching the drop shipping craze of 2024, it’s likely not a surprise that consumers would eventually crave better quality products. As homes filled up with cheap goods, and as de minimis exemptions end, consumers are turning back to products that can stand the test of time.
The great news is that consumers also seem to want to stay loyal. The rate of purchases coming from repeat shoppers continues to grow in 2025, with Q1 seeing a 6% year-over-year increase in this metric. As shopping experiences and loyalty programs continue to improve, consumers are consolidating their purchases with their favorite brands. For this holiday season, this means paying close attention to your existing customers and delivering on the experiences and value they’re looking for.
This holiday season, we predict that loyal shoppers will spend 20% more this holiday compared to every new shopper acquired.
What you can do: Ensure you are delivering on your brand’s promises in terms of pricing and product quality, and efficiently create personalized engagements in your customer recognition and rewards programs utilizing a Loyalty Management suite.
As we move into an era of hyper-personalized discovery and browsing, led by a conversational interface, commerce is on the precipice of major change. Not only is shopper behavior changing quickly, expectations are rising as the walls between channels continue to blur.
This season will undoubtedly be competitive as the industry looks to grab wallet share from price-sensitive consumers. A unified commerce journey is paramount to delivering on the intelligent, connected, and personalized journeys that shoppers are demanding.
For more insights into Salesforce’s holiday shopping predictions and recommended strategies, join us for our upcoming webinar Salesforce’s Five Predictions for the 2025 Holiday Season.
