Deloitte’s latest consumer survey points to some fascinating shakeups in terms of how people plan to browse and buy this holiday season. Up to 4,270 US consumers across age groups and income levels shared their perspectives on the economy, lifestyle stressors, and how they will impact their holiday celebrations this year. 

Future Commerce sat down with Brian McCarthy, Principal and Retail Strategy Leader for Deloitte Consulting LLP, to not only dig into the data but also gather actionable insights on how brands and retailers can apply it to inform their last-minute holiday plans. He shares how to: 

• Adapt marketing and advertising based on varying price sensitivities
• Build out eCom experiences to better serve AI agents
• Integrate creators into product curation and storytelling
• Harness the unique power of physical experiences to drive consumer delight 

HOLIDAY INSIGHT: Consumers plan to spend 10% less this holiday season, and most (77%) expect prices to be higher than last year.

“Last [holiday season], there was a story of inflation pushing prices higher,” noted McCarthy. “This year, that point is exacerbated, but…you also have a bunch of households that feel their financial situation is under pressure. That inflation story starts to play out when you think about it more broadly; when you're paying higher prices for groceries, rent costs, and healthcare. These are things that you have less flexibility on, so it only leaves so many additional dollars to spend on things like the holidays.” 

McCarthy noted that while Gen X and Baby Boomers are more financially established, Gen Z will feel the strain especially hard. Historically, this demographic has been the star of the retail spending story, with reports indicating their retail spending power will top $12 trillion within the next five years. However, this cohort plans to spend 34% less, which means brands and retailers will need to think strategically about who they’re reaching and how.

TACTICAL TAKEAWAY

Overall, consumers are looking to get the most bang for their buck. As a result, McCarthy reported that the two top sales channels will be digital marketplaces and mass department stores. This is a clear opportunity for brands with presence in these spaces and, of course, for the retailers themselves to amplify their special deals and sales events. Available services, such as visual search, curated product collections by age or preference, and even generative AI-powered curation, can simplify the holiday shopping experience and clearly communicate value. 

However, brands that sell direct can tap into their robust owned digital channel ecosystem to attract Gen Z consumers who use these channels more frequently. “If you're leaning into those channels, whether it be for marketing, promotion, or loyalty, you're going to grab some of the Gen Z,” McCarthy explained. With price top of mind, communicating value through these channels is essential to driving product sell-through.  

“You can start to target promotions on certain categories, especially if you’re seeing declining intent,” McCarthy explained. “For example, we’re seeing a 15% decrease in planned spend for apparel, but you want to make sure if somebody is buying it, they’re buying it from you and not your competitors. Incentivize those sorts of purchases with targeted promotions earlier this year.

HOLIDAY INSIGHT: 60% of holiday spending will come from households with $100,000 in income or more. 

Most holiday spending will come from older generations or higher-income households, McCarthy shared. However, households earning $100,000 or more are still prioritizing value, with high quality being their second main consideration. While $100,000-$199,999 households also appreciate variety (their second-most important factor), they are also most likely to participate in Thanksgiving week sales. Meanwhile, households with $200,000 or more in income prefer to shop with retailers and brands that are reliable and well regarded. 

TACTICAL TAKEAWAY

Merchants can run targeted marketing and personalization for these high-income households, tailoring messaging to their value drivers. If you’re targeting households in the $100,000-$199,999 income range, be sure to ramp up your campaign targeting during Thanksgiving week, highlighting your sales events, key holiday items, and (if applicable) services to help them get the best gifts for friends and family. 

HOLIDAY INSIGHT: Consumers plan to trade down this year, shifting their favored brands to more affordable options (65%) and shopping with more cost-effective retailers (50%) rather than their preferred destinations. 

McCarthy believes there are two ways to think about these data points: one is in the context of loyalty programs and the other is in the context of the overall brand experience. There is a clear opportunity for brands and retailers to refine their loyalty programs to offer more perks, incentives, and exclusive access, but consumers are no longer tethered to retailers simply because they belong to their loyalty program. Instead, they’re gravitating towards the shopping destinations that offer the best “value for the price.” 

Brands and retailers should strive to strike a balance between these two areas and focus on holistic value. He added: “Loyalty is now more based on execution than a program itself, although both are still important because you can’t really drive that value for the price, engage with people meaningfully, and provide that personalized experience if you don’t know them.” 

TACTICAL TAKEAWAY

‍Consumers are leaning into “value for the price,” which opens the door for merchants to leverage their loyalty programs to deliver that value. Consider how you can provide additional levers of value—financial, service, or experience—to create clear differentiation for your business. However, you should make sure the rest of your brand experience is “designed in a way to [help customers] find the right product and get it to people at the right place, and right price,” McCarthy added.

HOLIDAY INSIGHT: Shoppers said they were going to shop earlier to maximize savings. As a result, 25% of all holiday shopping was expected to be done before the end of October. 

But McCarthy reveals that there is a catch! Despite the holiday shopping season extending and starting earlier, Deloitte predicts two spikes: one in mid-October and one in late November. The mid-October surge was driven by Prime Day and competitive online promotional events, but the Black Friday, Cyber Monday (BFCM) weekend will lend itself well to foot traffic spikes in stores and omnichannel spending. 

Remember that time people said Black Friday was dead? The Deloitte data indicates that the beloved commerce holiday will be the most popular shopping day of Thanksgiving weekend, with Gen Z in particular (67%) using that day to cross off their lists. 

“The reason for this is people are being thoughtful and savvy about when they think they're going to get the most value for their dollar,” McCarthy explained, “and they believe these promotional windows are the best moments in time to make those purchase decisions. So during this time, you’ll see more use of wish lists and gift lists, so they can keep an eye on these items and find the right moment to purchase them.” 

TACTICAL TAKEAWAY

‍This promotional game of chicken opens the door for brands to engage more consistently and meaningfully with new and existing customers. Transparency around BFCM sales and promotions in the form of a special “holiday deal advent calendar” can keep consumers excited and engaged with your campaigns. 

‍Pre-BFCM social content can also focus on holiday must-haves, curated for specific personas, styles, trends, and even relationships, to ignite inspiration or better connect consumer wish lists to the items you actually offer. For example, a carousel or Reel focused on “top products for the beauty girlie in your life” helps shoppers connect the dots between a hypothetical persona and a person they’re shopping for. Influencers can also share their favorite finds on your branded eCom site, timing their recommendations with key sales moments.

“You can partner with influencers and even other brands to create unique offerings that drive traffic,” McCarthy noted. “Maybe you don't just have to sell your own brand; you can show there are ways to bundle up your products with a partner in another category or type of experience to optimize conversions.” 

HOLIDAY INSIGHT: 33% of surveyed shoppers plan to use generative AI in their shopping journeys this year, more than double the figure in 2024 (15%). 

We’re not quite at the point where digital agents are holiday shopping on behalf of consumers. However, the Deloitte survey indicates that consumers are increasingly using AI shopping channels and agentic browsers to find the right products and deals to meet their needs. 

“A lot of the decisions being made by AI are not based on trade promotion marketing, but based on how easy it is for the agent to find the information needed to help the customer make a decision,” McCarthy noted. 

TACTICAL TAKEAWAY

‍In the very near term, brands can make sure their metadata is in the right spot and that their websites are optimized “to be read appropriately by these AI tools so you’re top of mind,” McCarthy recommended. “The better your product and website data is,” to support the mission of these tools and agents, “the more likely you are to be at the top of that list when these agent browsers are finding what to recommend to people.” 

HOLIDAY INSIGHT: Shoppers are blending channels, but 44% plan to shop in stores and spend an average of $394. 

Consumers may not see clear channels while shopping, but they may notice some distinct benefits of shopping in stores versus online, especially during the holiday season. McCarthy noted that Gen Z is “starting to become the next mall rat generation.” The reason for this is multifaceted: 

“Part of it might be because of some of the employment issues we talked about; they have more free time and are spending some of that time at malls and stores,” he mused. “Part of it also might be that, because they are the true digital-native generation, going to a physical store is so different from the way we've grown up. It's just novel to them.”

TACTICAL TAKEAWAY

‍Sure, Gen Z may plan to spend less this holiday season, but if brands believe this is their core customer, they can use brick-and-mortar to build meaningful relationships and lay the foundation for loyalty.

Brands and retailers with physical stores can offer timely holiday services, such as gift wrapping and gift-finding support. Brands without a physical store fleet can experiment with pop-ups or partner with other brands to host events and activations. Arguably, these experiences don’t even need to be focused on driving conversions. Hosting holiday mixers, crafting classes, and other “moments” can bring in new customers. By collecting their information through a registration form or check-in process, you can gather their data for future online engagement. 

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