Each year, consumer behavior varies based on the current economic and cultural landscape. 2025 is no different, and as the holiday season approaches, it is important that retailers pay attention to consumer spending patterns and preferences.
2024 was a record-breaking year for holiday spending, but shoppers are being more cautious with purchases this year. This trend is especially true for Gen Z shoppers. While most consumers are planning the same holiday spending in 2025 as in 2024, Gen Z spending is down 23% from 2024.
Slower spending may be a result of tighter budgets; the typical customer in the United States has seen a 12% decrease in median assets over the past three years. However, certain generations feel more strain than others. For example, Gen Z has seen a larger reduction in its Market Pulse Index value than any other generation, speaking to the many challenges that young Americans face in finding financial footing.
Cautious spending is not the only trend to emerge in 2025. Another important development is the increasing popularity of Buy Now, Pay Later (BNPL). 67% of parents say that they would use BNPL to pay for holiday purchases like clothing, accessories and electronics.
Another pattern is an increased focus on personalization and data-driven marketing. Consumers want companies to provide thoughtful marketing and communication. In fact, 71% of consumers expect personalized interactions when shopping.
Domestic travel is also on the rise, although the rate of increase varies between generations. Gen Z and Millennials are the most likely consumers to travel over the 2025 holidays, while Baby Boomers are the least likely.
All of these patterns provide useful information for retailers who are preparing for the holiday season. Understanding the drivers behind slower consumer spending, BNPL, personalization and travel can help retailers adapt and excel during this year’s holiday retail season.
Source: Equifax
