The 2025 holiday shopping season is poised for a significant shift, marked by earlier consumer engagement, persistent inflation, and a pronounced focus on securing value.
New consumer survey data from Five9, “Inflation, Deals, and Divide: What’s Driving 2025 Holiday Shopping,” indicates that nearly 20% of consumers have already commenced holiday shopping, with another 31% planning to start well before Black Friday. This early activation is primarily driven by the search for deals and a strategic effort to manage budgets across multiple pay cycles. For senior marketing and CX leaders, understanding these evolving consumer behaviors—including generational and gender-based differences, and the rising prominence of AI in the shopping experience—is critical for developing effective strategies.
The Evolving Landscape of Holiday Spending
The traditional holiday shopping timeline is dissolving, replaced by an extended, deal-driven period fueled by economic pressures. Inflation concerns, tariffs, and broader economic uncertainties are directly influencing when and how consumers allocate their spending.
According to Five9 data, a substantial 51% of consumers either have already begun or plan to begin their holiday shopping significantly earlier than traditional peak periods. The top strategy respondents expect to use to cope with higher prices is to start shopping early to get better deals and discounts (62%). This proactive approach is particularly strong among younger demographics. Gen Z and Millennials are leading the early-shopping trend, motivated by the desire to find deals and stretch budgets. In contrast, Gen X and Boomers tend to anchor their spending around established shopping milestones such as Black Friday or December promotions. This divergence underscores a crucial point: a one-size-fits-all approach to holiday promotions is no longer sufficient.
Furthermore, tariffs are impacting holiday shopping plans for many consumers. Of those affected, 34% plan to seek more deals and discounts, 21% intend to spend less overall, and another 21% plan to spend more to acquire desired items. This indicates a segment of consumers willing to pay a premium for specific products, even amidst price sensitivity, suggesting brand loyalty and perceived value remain influential factors.
What this means: Retailers must initiate promotional campaigns earlier and maintain them longer than in previous years. Relying solely on November sales events risks missing a significant portion of the consumer base. Engagement strategies should be segmented to address the varying shopping rhythms and motivations of different generations.
Addressing Confidence Gaps and Budget Realities
Beyond generational differences, the Five9 survey highlights significant disparities in financial confidence and discretionary spending habits between genders, necessitating a more nuanced approach to marketing and customer engagement.
Overall, 76% of consumers express financial confidence about the next six months. However, this confidence is unevenly distributed, with just 24% of women reporting feeling very confident compared to 38% of men. Nearly a third of women (30%) also fall into a “gray zone” of neither confident nor unconfident. This confidence gap translates into tangible differences in spending behavior. Women are more likely to have reduced discretionary spending, with 48% cutting back on entertainment compared to 34% of men. These findings underscore that economic realities are shaping holiday shopping trends in demographic-specific ways.
For retail and CX leaders, these insights demand a strategic response that acknowledges varied financial outlooks and budget constraints. Generic messaging that assumes uniform confidence or spending power will prove ineffective and may alienate key customer segments.
What to do:
- Segment Messaging: Develop distinct marketing messages and promotional offers tailored to different demographic segments, acknowledging their financial confidence levels and budget sensitivities.
- Emphasize Value and Flexibility: Highlight value propositions, payment flexibility (e.g., “buy now, pay later” options), and clear discount structures. Promotions should communicate concrete savings.
- Build Trust Through Transparency: Be transparent about pricing, return policies, and shipping costs. Cautious shoppers prioritize clarity and reliability.
- Personalize CX: Train CX teams to recognize and respond empathetically to diverse customer needs, particularly concerning budget and value.
What to avoid:
- Uniform Campaigns: Do not launch broad campaigns that fail to account for differing financial confidence or spending priorities across demographics.
- Late Engagement: Delaying outreach until traditional peak holiday periods.
- Ignoring Feedback: Neglecting customer service interactions as a source of insight into budget concerns and value perceptions.
AI as a Strategic Imperative for CX and Sales
The integration of artificial intelligence (AI) is no longer a future concept but an immediate expectation for consumers navigating the holiday shopping experience. AI will play a critical role in enhancing deal discovery, personalizing interactions, and optimizing customer support.
Nearly two-thirds of consumers (65%) are planning or considering using AI tools for their holiday shopping this year. Younger generations lead this trend, with 39% of Millennials and 34% of Gen Z planning to utilize AI. The primary driver for AI adoption is the pursuit of better savings or deals, cited by 45% of consumers. This is followed by desires for a faster shopping experience (16%) and personalized recommendations (14%).
Consumers also expect AI to feature prominently in customer service. Approximately one in four consumers would let AI handle their issues entirely, while nearly half (46%) would try AI but want the option to switch to a human agent. Gen Z is particularly open to AI customer service, with 51% willing to try it if a human fallback is available. This indicates a clear demand for efficient, AI-powered self-service options, coupled with the assurance of human support for complex or sensitive inquiries. Crucially, a majority (72%) of consumers consider customer support quality when deciding where to shop, positioning AI-enhanced CX as a significant differentiator.
Operating Model and Roles:
- AI-Powered Deal Discovery: Implement AI tools for real-time price tracking, competitor analysis, and personalized deal alerts. This can manifest as intelligent chatbots on e-commerce sites or integrated features within loyalty programs.
- Personalized Product Recommendations: Leverage AI to analyze browsing history, purchase data, and demographic information to provide highly relevant product suggestions, improving conversion rates.
- Tiered Customer Service: Deploy AI agents (chatbots, voice assistants) for common inquiries such as order status, return policies, and basic product information. Establish clear escalation paths to human agents for complex issues, complaints, or emotionally charged interactions, ensuring a smooth handoff and context transfer.
- Guardrails and Thresholds: Define clear thresholds for AI agent autonomy (e.g., “credits up to $25; 7-day window for returns”) and implement sentiment analysis to trigger human intervention when customer frustration escalates.
- CX Agent Training: Train human agents to collaborate with AI tools, utilizing AI-generated insights for faster, more informed problem resolution.
What to do:
- Invest in AI for Value Delivery: Prioritize AI solutions that help customers find deals, compare prices, and receive personalized offers.
- Integrate AI into CX: Deploy AI agents (e.g., via CRM, ticketing systems) for front-line support, ensuring they are trained on relevant data (e.g., entitlements, consent policies) and have defined parameters.
- Establish Clear Human-AI Handoffs: Design intuitive processes for customers to transition from AI to human agents, ensuring context is preserved and the experience is seamless.
- Prioritize AI Red-Teaming: Continuously test AI systems for biases, accuracy, and unintended behaviors, especially in sensitive customer interactions.
- Measure AI Effectiveness: Track metrics such as FCR (First Contact Resolution) for AI interactions, time-to-resolution, CES (Customer Effort Score), and CSAT/NPS for AI-supported customer service. Aim for AI to resolve 40-50% of routine inquiries without human intervention, maintaining or improving CSAT.
What to avoid:
- AI Without Human Oversight: Deploying AI agents without robust human-in-the-loop protocols or clear escalation paths.
- Over-Personalization: Using AI to collect or process data without explicit customer consent, risking privacy violations.
- Ignoring AI Performance Metrics: Failing to monitor and optimize AI agent performance against key CX metrics.
- Blindly Trusting AI: Relying on AI for sensitive or high-value customer interactions without sufficient human review and validation.
Summary
The 2025 holiday shopping season will be defined by a complex interplay of economic pressures, shifting consumer behaviors, and technological advancements. Retail and CX leaders must move beyond traditional approaches, embracing an early, segmented, and AI-driven strategy. By acknowledging the distinct shopping patterns of different generations, addressing gender-based confidence gaps with tailored messaging, and strategically integrating AI to enhance value discovery and customer service, enterprises can not only meet evolving customer expectations but also build lasting loyalty in an uncertain market. Adaptability, transparency, and a relentless focus on delivering tangible value will be the hallmarks of success.
