What's Happening?
Sales forecasts for the 2025 holiday season present a mixed outlook, with Deloitte predicting a modest increase in sales compared to the previous year, while PwC anticipates a decline in consumer spending. Deloitte forecasts a 2.9% to 3.4% rise in holiday sales, reaching up to $1.62 trillion, but this growth is slower than the previous year's 4.2% increase. Salesforce predicts a 4% rise in online sales, totaling $1.25 trillion globally. However, PwC expects a 5% decrease in average consumer spending, with significant reductions in gift spending, particularly among Gen Z. Despite these concerns, AI is expected to play a significant role in retail, with increased consumer trust in AI-powered shopping assistants.
Why It's Important?
The integration of AI in retail is reshaping consumer shopping experiences, with AI-driven recommendations gaining trust among shoppers. This trend could lead to increased efficiency and sales, as AI users show higher conversion rates compared to other traffic sources. The growth of AI in retail highlights its potential to enhance customer service and streamline shopping processes. However, economic uncertainties, including tariff policies and supply chain challenges, may impact consumer spending. The rise of resale items as holiday gifts reflects changing consumer priorities towards cost-saving and sustainability.
What's Next?
Retailers may continue to invest in AI technologies to capitalize on its growing influence in consumer shopping journeys. As AI becomes more integrated into both online and in-store experiences, retailers could see increased sales and improved customer service outcomes. The focus on resale items may also drive changes in inventory and marketing strategies, catering to consumer demand for sustainable and affordable options. Economic factors such as tariffs and interest rates will remain key considerations for retailers and consumers alike.
