Holiday Spending Trends in 2025

The holiday season is historically one of the highest periods for consumer spending compared to the rest of the year. In fact, in 2024, spending data indicated a record breaking holiday season. However, in 2025, these trends are changing, indicating a strong need for retailers, lenders and other financial players to check the pulse of consumers heading into the end of the year.

Since 2021, the market pulse index has dropped across almost all generations, excluding Baby Boomers. These numbers offer a multidimensional view of consumer finances across generations in the United States, designed to help analyze key financial components in consumer day to day life and how they interact, evolve and change over time.

There are several factors that contribute to this index, particularly why it has been decreasing over recent years. Primarily, younger generations are experiencing increasing delinquencies, wealth and income volatility, student loan impacts and higher savings rates. This index also measures consumer financial data points such as credit, debt, income, assets and capacity. Capacity is a consumer’s ability to continue meeting spending and debt obligations needs during periods of financial stress. These tools help providers to have a strong idea on where each consumer is in their journey and help to predict future spending patterns.

Overall, data for this year is showing that consumers are treading lightly, with slowed spending and more value based purchases. Further data shows that many middle-income households are experiencing tighter budgets and the typical US consumer has seen a 12% decrease in median total assets over the past 3 years.

It is also important to understand the generational differences that are apparent in the market. For Generation Z, many people are facing financial challenges heading into the holiday season. The average US population’s market index value has decreased by 1% over the last four years with Generation Z seeing the most impact. Additionally, credit consumers within this younger generation have doubled since just 2021.

Although this data is indicating a strong need for decreased spending across generations, consumers are still willing to spend. Especially during the holiday season, consumers may be cautious, but are finding new and viable ways to keep the season merry.

Researchers have uncovered four main behavior trends for lenders and retailers to watch and prepare for during the 2025 holiday season. First, early shopping is becoming the norm for many consumers. Studies show that 80% of all planned holiday gift shopping is expected to occur by the end of Cyber Monday, before December even begins. Additionally, almost 40% of total planned holiday gift spending is expected to happen even earlier, between Thanksgiving and Cyber Monday. This time period is best known for annual sales and intense saving, making it the best time for consumers to get the best deals.

Buy Now, Pay Later (BNPL) systems are also becoming more popular, as 43% of consumers say that it influences where they shop. This system is a credit-like system, giving shoppers more freedom on larger purchases. Almost 70% of parents claim that they would use BNPL to finance big ticket items such as cars, furniture, electronics and clothing.

Personalization and data-driven marketing has become king in the eyes of the consumer. Over 70% of shoppers now expect companies to offer personalized interactions when they are in-store or online. Additionally, companies that utilize personalization in their marketing and consumer experience drive 40% more revenue than those who are slow to adopt.

Finally, experts have seen a rise of domestic travel, especially in younger generations like Generation Z and Millenials. These younger age groups are most likely to travel over the 2025 holiday season, and are now opting for domestic travel to save precious resources like time and money.

This data tells retailers and lenders much about how to anticipate shoppers and their preferences ahead of the holiday season. For lenders, they must be prepared for an increased demand for card originations and higher card balances due to increased spending. Additionally, there will be an increase in credit and loan requests to prepare for big purchases.

For retailers, less savings has already led to less discretionary spending money for consumers. This means that shoppers will be more value driven than ever before when deciding what to buy. It will be harder than ever to convince people to purchase beyond their daily essentials in today’s volatile market.

This data and a continued analysis of consumer spending will help to inform key financial players in what to look out for this holiday season.