Holiday Shoppers to Increase Spending by 6% in 2025, Embracing AI and Value-Driven Purchases
TL;DR
Retailers can gain advantage by offering targeted 40% discounts and value-driven initiatives to meet consumer demand while maintaining profitability during holiday sales.
Simon-Kucher's 2025 report shows consumers plan early, use 2.4 payment methods, and expect category-specific discounts while embracing AI for deal tracking and price comparisons.
Consumers prioritize quality and value over price, fostering more meaningful purchases and reducing returns, which supports sustainable retail practices and better shopping experiences.
54% of shoppers now use AI for holiday support, with social media inspiring 64% of purchases and Black Friday remaining the top sales event.
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Holiday shoppers are projected to increase spending by 6 percent compared to last year, reaching up to $1,077 per household, according to Simon-Kucher's 7th Annual Holiday Shopping Report. The study reveals consumers are adopting stricter budgets while shifting focus toward quality and value rather than price alone across most retail categories.
Shikha Jain, Partner and Head of Consumer and Retail for North America for Simon-Kucher, stated, "Consumers are not looking for a one-size-fits-all discount strategy this holiday season. By striking a balance between promotions and differentiating discounts, retailers can meet consumer expectations and maintain profitability." The report indicates most consumers expect discounts up to 40 percent, with 25 percent discounts remaining common across various product categories.
Spending patterns show category specificity, with over 50 percent of consumers spending more than $100 in high-value categories including household appliances, home improvement, and electronics. Jain added, "Holiday sales will grow in 2025 with a successful measure of meaningful discounts. Consumers are acting decisively, securing good deals now that may not last."
Purchasing behavior data reveals 66 percent of early holiday shoppers favor Black Friday and other sales events, with shopping beginning as early as July 4th through Super Saturday. Social media serves as inspiration for 64 percent of shoppers, while return rates remain low with three out of four consumers returning 10 percent or less of their purchases.
Max Walter, Director of Consumer and Retail for North America for Simon-Kucher, noted, "Today's holiday shopper plans early, looks to social media for inspiration, and expects smooth experiences that minimize returns." AI adoption shows significant growth with 54 percent of consumers using AI for holiday shopping support, 23 percent for deal tracking, and 27 percent for price comparisons, though older generations demonstrate reluctance toward AI assistance.
Tariff impacts concern 44 percent of consumers who expect at least moderate effects on holiday shopping, while 19 percent opt out due to budget constraints and commercialization concerns. Shoppers utilize an average of 2.4 payment methods, with 45 percent preferring debit cards. Walter commented, "Tariffs add a financial hardship on both essential and discretionary goods, so businesses that offer consumers thoughtful, value-driven initiatives will thrive better."
The study, conducted between July 25-31, 2025, surveyed 1,513 US consumers anonymously to determine accurate holiday spending predictions. Simon-Kucher analyzed holiday spend per household relative to US population distribution by household income level using data from Household Income: HINC-06 (census.gov). The consulting firm's annual report has become a trusted resource for retailers and consumer brands due to its historically accurate predictions mirroring actual market outcomes.
Curated from Reportable
