Consumers have been tightening their belts amid ongoing concerns about economic uncertainty—from tariffs to inflation to market volatility. A recent Vanguard survey reports that 71% plan to adjust their savings this summer to prioritize emergency savings and financial flexibility.
What impact can retailers expect to see on holiday 2025? Hopefully, not much. Deloitte predicts back to school spending, often considered an early indicator for holiday spending, will remain flat this year, and Heather Campain, Epsilon’s Executive of Sales Strategy, says she’s cautiously optimistic.
But as retail marketers plan and budget for the upcoming holiday season, they are under pressure to make sure every penny is delivering an additional penny in return. With sales expectations iffy, no marketer has the luxury of missing a target.
The most successful retailers this season will be those that lean into what they can control, such as value-driven messaging, operational efficiency, and smart integration of online and in-store experiences. Here are five strategies to help marketers stay grounded and get ahead, no matter how the season unfolds.
Consumers have reported concerns with inflation and rising costs over the past several holiday seasons. In 2024, 81% of consumers were actively seeking sales and deals, 47% planned to buy less expensive gifts and 39% planned to buy less overall.
This year, consumers have added tariffs to their list of cost concerns.
As of June, the average U.S. tariff rate surpassed 15%, the highest since the 1930s. According to PMG, inventory stockpiling has delayed the full impact on consumers, but more price increases are expected to materialize in the second half of the year, especially in categories sensitive to tariffs—such as electronics, apparel, home goods and food.
As a result, 2025 holiday shoppers will likely be cautious and spend more conservatively across income levels. Campain explains, “Value-driven consumers will be looking for better deals this holiday season and may even buy down to white-label or private-label brands.”
To win cautious consumers this holiday season, retailers should shift messaging and merchandising to emphasize value—not just low prices but also quality and relevance. Segmentation tools can help tailor messaging by income, past behavior or price sensitivity, while personalization engines can highlight relevant promotions and lower-cost alternatives.
Interestingly, McKinsey reports that cross-category trade-downs—trading down in one category to afford something in another—are becoming more prevalent.
“Make sure to adjust value-based messaging according to each shopper’s behavior and intent signals,” explains Campain. “Search and browsing data can identify categories where customers are trading up or down, so brands can adjust their offers in real time.”
Consumers are already using AI to find gifts faster, and retailers should meet them where they are. “AI search and recommendation integration is super important, especially if you have a retailer who's trying to be competitive in the market with a very best-in-class AI chatbot that can recommend items quicker,” says Campain.
But AI is changing more than just the consumer’s shopping experience. It can also solve real operational challenges in marketing to save time (always in short supply during the holidays), reduce risk, and increase revenue.
“I think a lot of retailers are still trying to understand where AI sits in their business to help solve for a business challenge,” Campain continued. “That's where I always start my conversations. What are you trying to solve for? And does AI fit in there?”
For example, AI can speed up holiday campaign production, improve segmentation (e.g., price sensitive versus splurging) and increase personalization, assuming data quality is high enough to positively drive AI performance.
Consider preparing a “Last-Minute Gift Ideas” campaign the week before Christmas. Traditionally, this kind of campaign might take two to three weeks to concept, segment and launch, by which time the opportunity would be long gone. With AI, retail marketers can automate segmentation to identify last-minute shoppers (like those who browsed gift cards or expedited shipping options), generate tailored creative with gift suggestions based on browsing and launch the campaign in days.
“Just as personalized connections drive engagement, so should product data,” says Caroline Ballard, Vice President, Commerce Media at Profitero. “This is why combining digital shelf insights with audience data is retail media gold. By enabling national programmatic campaigns to adjust bids at the zip code level with store inventory and pricing, our AI has cracked the code for re-engaging lapsed shoppers at scale. This allows brands to be rediscovered exactly when consumers are seeking a replacement item, which is especially crucial ahead of the holidays,” says Caroline Ballard, Vice President, Commerce Media at Profitero.
Features like buy online, pick up in store (BOPIS) and curbside pickup were once considered optional perks. They now play an important role in meeting holiday shoppers’ urgent needs while encouraging foot traffic to brick-and-mortar stores. Epsilon research shows that during the 2024 holiday season, 42% of shoppers planned to buy online and then pick up in a physical store. And it will likely be more this year—CapitalOne Shopping research projects BOPIS sales to grow nearly 17% annually (58% faster than ecommerce as a whole).
Campain explains that shoppers will likely be searching with urgency this holiday season and want fulfillment flexibility—especially if supply chain disruptions return given evolving tariffs. “I think people are going to be frantically searching for purchases this year. We're going to see a lot of, ‘I just need it really fast. I’ll pick up in the parking lot in 10 minutes,’” she says.
Beyond convenience, these fulfillment options also help retailers get shoppers into their physical locations, which often results in additional trips to the checkout counter. According to CapitalOne, 85% of BOPIS shoppers have made an additional purchase when they went to the store to collect an order. As retailers struggle to justify their real estate footprints, BOPIS and curbside pickup offer a clear path to making each store work harder, serving as both fulfillment center and driver of incremental sales.
Retailers should double down on localized and real-time fulfillment options for holiday 2025. Consider geotargeting and store-level inventory feeds to power messages like "Available now at your local store.” Use dynamic content in email and SMS messaging to promote real-time product availability, and use automation to update fulfillment messaging across touchpoints.
“Every retailer should have a way to communicate to customers about store hours and product availability,” says Campain.
Re-commerce (reselling gently used or returned goods) is on the upswing, driven largely by millennials’ and Gen Z’s thrifting mindset. According to Ebay’s 2024 Recommerce Report, 86% of consumers say they’ve bought or sold pre-loved goods in the past year. The report also noted 400% year-over-year growth in the number of items sold with “thrifted” in the description.
Campain expects to see re-commerce grow this holiday season, too, as consumers become more cost- and eco-conscious.
There are two ways for retailers to address it:
First, reach out to lapsed customers with offers that may entice them to return, such as affordable price points, hot deals, and eco-friendly product lines. Retailers should also integrate transactional data with a people-based identity solution like Epsilon's COREid. This allows marketers to identify and reengage lapsed customers that were not in their database.
Second, if you can’t beat ‘em, join ‘em. Retailers should explore ways to tap into re-commerce this season, whether through curated post-holiday sales, partnering with resale platforms, or launching their own pre-owned inventory shops. Popular CPG brands have already waded into the pre-owned waters with offerings like Patagonia's "Worn Wear," Lululemon's "Like New" and REI's "Re/Supply."
Most retailers are still not fully leveraging the rich behavioral and transactional data they collect during the holiday shopping surge. “Every retailer has a significant uptick in sales and traffic and behavior and searches online, and that's a lot of data to understand,” explains Campain.
But understanding that data and using it to fuel strategy for the following season is a huge opportunity to earn a competitive edge. For example, Campain stresses that retailers should be matching the wealth of behavioral and transactional data from the holiday season to the existing first-party data in their databases.
“If you match up new data with existing first-party data, you know exactly what someone is looking at. When they raise their digital hand at some point to say, ‘I’m Heather Campain, and I’m going to sign up for your loyalty program,’ you can now create a fairly robust profile of each shopper.”
And more robust customer profiles arm retailers for more successful marketing campaigns moving forward. In a whitepaper sponsored by Epsilon, titled Customer experience suffers without omnichannel alignment, IDC's Roger Beharry Lall explains, “By leveraging integrated first-party data and resolving identity at the person level, more accurate targeting of the intended consumers becomes possible.”
To get the most out of this year’s shopping surge, retailers should be actively capturing, connecting and enriching that data—not just to drive immediate wins but to also lay the groundwork for more efficient and effective campaigns next holiday season. The more complete the customer picture, the better positioned marketers will be to deliver timely, relevant offers when it matters most next year.
“Data quality isn't just about having a lot of information; it's about ensuring that each piece is accurate, complete, timely, consistent, and relevant to your goals. When any of these elements are missing, your marketing efforts risk missing the mark,” Schneider says. “Enhancing your first-party data with second- and third-party sources is no longer a luxury; it's a necessity in today's fast-moving market. External data can provide valuable enrichment, such as the latest address information, insights into changing consumer preferences, or behavioral trends that signal shifting interests.”
