Holiday Discounts May Be Harder to Find This Year
â–¼ Summary
– Three out of four U.S. shoppers expect to pay more during the 2025 holiday season, according to a Gartner report.
– One in four Americans plan to spend less overall, and 40% expect fewer discounts for the holidays.
– Klaviyo data showed sales grew over the 2025 Labor Day weekend even as discounts decreased in categories like sporting goods and apparel.
– Average Order Value in apparel increased by $10 year over year, suggesting demand remained strong despite fewer discounts.
– Leaner stock levels due to tariffs or supply chain changes may have discouraged retailers from offering more discounts.
A significant shift in consumer expectations and retail strategy is reshaping the upcoming holiday shopping season. Three out of four U.S. shoppers anticipate paying more for their purchases, according to recent consumer trend analysis. This sentiment is supported by data indicating that one in four Americans intend to reduce their overall holiday spending, with 40% predicting that discounts will be less plentiful than in previous years.
Retailers traditionally rely on promotions to stimulate demand, especially when buyers are mindful of their budgets. However, evidence from a major holiday weekend suggests a different pattern is emerging. Sales actually increased compared to the prior year, even as the availability of discounts diminished. This indicates that consumers are still spending, just with fewer incentives from retailers.
Certain product categories saw notable declines in promotional activity. Sporting goods experienced an 8% drop in discount volume year over year, while apparel and accessories dipped by 3%. Most other sectors remained steady, showing neither a significant rise nor fall in promotional offers.
Several factors may be influencing this trend. Leaner inventory levels, potentially resulting from tariffs or ongoing supply chain adjustments, could be discouraging merchants from slashing prices. When stock is limited, there is less pressure to use discounts to clear shelves.
Interestingly, even with fewer markdowns, the average order value in apparel rose by $10 compared to the same period last year. This suggests that consumer demand remains robust even without heavy discounting. If this pattern continues, shoppers may indeed find fewer bargains as the holidays approach.
Another contributing factor is the ability of sellers to precisely target discounts to specific customer segments rather than blanketing all shoppers with uniform promotions. This more strategic approach allows retailers to maintain margins while still rewarding loyal or high-value shoppers.
The broader implication is that the holiday retail landscape is evolving. Shoppers may need to adjust their expectations, and retailers are likely to continue refining how and when they offer promotions. As the season progresses, these trends will become even more apparent.
(Source: MarTech)