This holiday season, marketers are staring down a paradox that’s hard to disregard: Consumers are feeling cautious, cutting back and apprehensive about affording gifts — yet total retail sales are expected to hit an all-time high.
On the one hand, sentiment surveys paint an image of a financially strained shopper. Nearly half of Americans (47%) say they’re apprehensive they won’t have the option to afford gifts this 12 months, in accordance with research by Narvar, a post-purchase platform vendor. Two out of three plan to in the reduction of. Deloitte is forecasting a ten% drop in average individual holiday spend, and PwC puts the decline at 5%.
Dig deeper: U.S. online holiday shopping expected to hit a record $253 billion
But the big-picture forecasts? They tell a really different story. Mastercard, Visa, Adobe and the National Retail Federation all project U.S. retail sales will grow between 3.6% and 4.6% 12 months over 12 months, with ecommerce expected to hit a record $253.4 billion.
The truth is, each views are technically correct. And that disconnect is strictly what marketers must navigate.
Rising sales, shrinking carts
Let’s start with the maths. Most of that projected growth is nominal — not real. In other words, shoppers are spending more because things cost more, not because they’re loading up their carts.
Inflation, combined with recent tariffs on categories comparable to electronics and apparel, is driving up prices. Visa’s forecast shows a 4.6% increase in sales — but only 2.2% of that’s 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 2025 holiday shopper isn’t just browsing; they’re budgeting they usually’re being smart about it,” she said. “That mindset shifts every thing. In a cautious economy, consumers are scrutinizing where their money goes and who they trust with it.”
Wealthier households are propping things up
The other big reason total sales are expected to rise? The wealthiest households are still spending — they usually account for the vast majority of holiday spending. The gap between the haves and have-nots is widening and marketers should be cognizant of that.
Dig deeper: How to show holiday shoppers into loyal friends, not one-time buyers
Consumers earning over $100,000 represent 60% of expected holiday spend, in accordance with Deloitte. They’re not pulling back as much, and in lots of cases, they’re still splurging on discretionary items. That’s masking the deep cuts coming from younger and lower-income shoppers — comparable to Gen Z, who, in accordance with Deloitte, expect to spend 23%–34% lower than they did last 12 months.
“This group tends to skew younger: 58% are 44 or under, and plenty of have kids at home,” Dummitt said. “Most live in households earning under $100,00 a 12 months, they usually are starting their holiday shopping even sooner than average, making deliberate selections as they go.”
Winners and losers within the holiday basket
Despite all of the belt-tightening, some categories are still expected to perform well — especially those who align with cultural trends or are fueled by wealthier shoppers. Think high-demand electronics, gaming consoles, toys and viral fashion brands. Adobe’s forecast puts these in the expansion category.
However, traditional discretionary retail — like apparel and residential goods — is taking a success. Average spend on retail goods is predicted to fall 14% YoY, in accordance with Deloitte, with shoppers trading down or skipping big-ticket items altogether.
But that doesn’t mean persons are skipping the vacations, removed from it.
“Consumers are thoughtful, engaged and paying close attention to value,” Dummitt said. “But they’re not cutting back on joy, they’re just being smarter about how they spend.”
What marketers need to vary — fast
So what does this mean for holiday marketing teams?
For starters, urgency-heavy language like “don’t miss out” or “last probability” might backfire. “The holidays still sparkle, however the sentiment has shifted,” Dummitt said. “Many consumers are feeling cautious, not carefree, and the tone must evolve with that reality.”
Instead, she suggests shifting to messages rooted in support and reassurance — things like “Gifting made easy” or “We’ve got you covered.” But messaging alone isn’t enough.
Dig deeper: Your holiday marketing playbook must put sincerity before sales
“Messages that center on support land higher once they’re paired with meaningful actions like flexible returns, clear delivery guarantees, or protection if something goes incorrect,” she said. “These aren’t just logistics. They are trust signals.”
In a 12 months when so many consumers feel financially stretched, small moments of reassurance matter. Especially with rising concerns around porch piracy, late deliveries and unclear return policies, brands that overpromise and underdeliver will lose customers fast.
“When budgets are tight, the lack of a single package isn’t just an inconvenience, it’s a financial setback,” Dummitt said. “Those questions weigh heavily on consumers’ minds, they usually directly influence where people decide to shop.”
Early birds, higher stakes
Marketers also need to acknowledge that the standard Q4 shopping window is already out of sync with consumer behavior. Shoppers began early — 73% began shopping before Cyber Week, in accordance with research by RetailMeNot, and nearly 1 / 4 of budgets are spent before November even begins.
That means campaigns that launched last week may already be too late to capture peak consumer attention.
Dig deeper: Shoppers expect fewer discounts this holiday season
It also means expectations are higher. Consumers want free shipping, BNPL options and easy paths to checkout. They expect real-time updates and fast order confirmations. If something goes incorrect, they need resolution — not excuses.
“Compared to last 12 months, the margin for error is smaller. Loyalty is harder to earn and easier to lose,” said Dummitt. “The brands that deliver confidence, from product page to doorstep and beyond, will turn one-time buyers into lasting customers.”
Lead with confidence, not noise
This season, the brands that win won’t be the loudest — they’ll be probably the most dependable.
“This season calls for messages grounded in value, empathy and ease,” Dummitt said. “It’s not about pushing harder; it’s about listening higher. The brands that show they understand what matters most to people at once will stand out, not with volume, but with authenticity.”
So yes, sales may hit record highs. But don’t mistake that for enthusiasm. For many consumers, this holiday isn’t about buying more. It’s about buying higher — and from brands they’ll count on.
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