The Green Sheet Online Edition

October 13, 2025 • 25:10:01

A new kind of holiday rush - faster, smarter, pricier

It's the fourth quarter of 2025, and businesses large and small are preparing for the end-of-year holiday season. And while holiday shopping is far from being in full swing, spending shifts are already noticeable, according to the Mastercard Economics Institute's (MEI) annual holiday forecast for the United States and Canada.

Online sales growth will continue to outpace in-store shopping, according to the Mastercard unit. MEI is projecting Americans will increase their online spending by 7.9 percent, year-over-year, compared to a 2.3 percent spending increase at brick-and-mortar stores. Similar growth patterns are expected in Canada: a 5.3 percent in online spending and 2.5 percent in store.

But inflation is expected to be a larger contributor to sales growth, as opposed to actual sales volume compared to last year, and the impact of tariffs on consumer prices is not yet clear. "Some retailers betting on sales volume may choose to eat the tariff increases, but there are signs that others will be passing them along," MEI wrote in its report on holiday shopping trends.

Tariffs now in the mix

Dave Charest, director of small business success at Constant Contact, said in an interview that many small businesses are prepared for the impact of tariffs and are making "tough decisions" to increase prices, and explaining the why to customers. "Small businesses are resilient," he said. "They're not waiting to see what happens. They are taking action."

"The ripple effects of tariffs, global trade shifts and beyond haven't left small businesses a lot of breathing room," Constant Contact wrote in a report, The state of small business marketing in 2025. "Some are adjusting prices, finding new suppliers, and reworking their marketing. Others are trying to be more transparent with customers and show stability while they wait for other changes."

In a survey of small businesses, Constant Contact found that for 62 percent of respondents tariffs have impacted their sourcing; another 68 percent expect more disruptions to occur this year. Thirty-nine percent have had to find new suppliers, and 46 percent have raised prices.

"Many say they don't feel fully prepared for what's ahead, but they're doing what [small and midsize businesses] do best: thinking lean, staying nimble and continuing to move forward," Constant Contact wrote in its report.

Charest likened it to what occurred during the COVID pandemic. "Businesses understand they have to make hard decisions to make it"[in this economy," he said.

Salesforce data deep dive

Meanwhile, according to Salesforce, spending in the 2023 holiday season totaled $1.17 trillion, and total global ecommerce spending during Cyber Week reached $298 billion. In 2024, those numbers increased significantly, even though 21 percent of shoppers said they planned to spend less, according to Salsify's 2024 Holiday Consumer Research Report (Salsify, a product experience management platform, has collaborated with Salesforce on several year-end holiday studies).

This year, just over half of shoppers (53 percent) say they'll spend about the same as last year. Seventeen percent of U.S. shoppers aren't too bogged down by economic uncertainty—or perhaps they're simply accustomed to it—and say they'll spend more than last year, according to Salsify's 2025 Holiday Pulse Report.

Gen Zers and millennials are most likely to spend more during the 2025 holiday shopping season. A quarter or more of millennials (25 percent) and Gen Zers (29 percent) told Salsify researchers they plan to spend more on their holiday shopping, underscoring younger shoppers' continued buying power, and desire. Gen Xers are the least likely to spend more this year (16 percent), followed closely by baby boomers.

A significant share of shoppers (37 percent) said they buy more frequently due to recommendations, according to Salsify's research. "Sending personalized gift guides compiled with products from past browsing sessions and related items could be a big help to shoppers this holiday season," Salsify wrote. "Want to send them a personalized discount, too? That should be more than enough to seal the deal."

Younger consumers to drive pay-later options

While installment programs are commonplace, the website Pymnts.com reported that its research suggests "considerable greenfield potential" with certain consumer segments, namely younger consumers, when it comes to spreading out payments.

PYMNTS Intelligence "Installment Persona" data comparing April and September 2025 revealed substantial growth in pay-later adoption, climbing from 29.5 percent in April to 37.8 percent in September.

Here's a breakdown of buy now, pay later usage (BNPL), specifically, by generation, as reported by Pymnts.com:

Pymnts.com's analysis suggests that younger consumers view BNPL as a budgeting and liquidity tool rather than a last resort credit product. "Although traditional credit cards still dominate for rewards and larger transactions, BNPL appeals for its immediacy and accessibility," Pymnts.com wrote.

The website and consultancy suggested that as the 2025 holiday season approaches, "BNPL's appeal – rooted in instant approval, perceived affordability, and convenience – aligns neatly with the surge in seasonal discretionary spending."

Gift cards offer flexibility in a tight economy

"When prices rise, shoppers may turn to gift cards, allowing them to navigate rising prices while allowing their loved ones to choose what they want," MEI wrote. The Mastercard economics arm said it anticipates higher-than-normal use of gift cards this holiday season.

But because gift card purchases are highly seasonal (MEI's data indicates nearly a third of this spending occurs in December and January, on average) the economic impact will spill into 2026. Also, some categories show more seasonality than others. About 38 percent of gift card spending at toy stores happens in December and January.

Thirty-seven percent of bookstore gift cards sales are in December and January as well. Health, beauty and medical supply stores see about 36 percent of gift card sales in those months. ("Health, beauty and medical supply stores are one category – let's presume people are picking up cologne, not catheters," MEI wrote.)

Tech-powered health equipment

From health trackers to gym equipment with built-in health monitoring and workout mirrors offering personalized training via AI, technology-powered health and wellness is a hot category, MEI reported.

Spending on new fitness brands grew at 30 percent year-over-year from 2023 to 2024, compared to 5 percent for conventional fitness clubs in the U.S.

MEI's analysis reveals that between 2018 and 2024, spending on new fitness brands during the holiday season rose 4.5 percent compared with the rest of those years.

Significant peak season buying

Salsify expects most shoppers to get into the gift-buying spirit during peak season. Nearly six out of 10 shoppers plan gift-getting from September through December. Just 15 percent identified themselves as "early birds," who get shopping done January through April; 19 percent said they shop during the "mid-season" of May through August.

But don't expect a "December rush," as only 9 percent of shoppers wait until then," Salsify reported.

Online and mobile shopping trends

While Black Friday is traditionally an in-store event, 38 percent of consumers plan to shop online this Black Friday, according to Salsify, and about a quarter (24 percent) plan to mix in-store and online shopping.

But online shopping isn't what it used to be. Shoppers love being mobile, and those participating in Salsify's Ecommerce pulse report for Q2 2025 shared some of their favorite features of mobile shopping. Among the most popular:

Although in earlier years ecommerce and mobile commerce were the domain of larger retailers, this is no longer the case. What's more, "Small businesses are using social media more," Charest noted.

They also are using artificial intelligence and video in their marketing to consumers. For example, among those surveyed by Constant Contact, 37 percent said they are using AI to write email subject lines or social media posts. Nearly three in 10 (29 percent) said they are using the technology to make images; 25 percent said they are using it to analyze data. What's more, 78 percent of small businesses are using video in their marketing.

They also are using email more: 44 percent are using it to drive sales, which is double the percentage that said they were doing so last year.

Email and SMS messages allow small businesses the ability to individualize, Charest pointed out. "They can raise awareness without being on a platform that relies on algorithms," he said. "With email, you own the relationship." Charest described email and SMS as revenue drivers rather than means for attracting new customers.

Elaborating on Constant Comments research, and his own experience working with small businesses, Charest said tools like AI helps them get things done without the need to invest a lot of time and money into the process.

"It's all about content," he said. So, for example, a merchant can shoot a video, cut it up into pieces and transcribe it with AI, which in turn can form the basis for sending out emails, making social media posts and sending out text messages to customers, he added.

Mastercard's research further illustrates the importance of social media, particularly among Gen Z, who seek out recommendations from influencers. A recent examination of aggregated and anonymized Mastercard data for viral teen and tween fashion brands found that of the 15 American counties where social media drove the most fashion spending, 10 of them were in big college towns. End of Story

Patti Murphy is senior editor at The Green Sheet, president of ProScribes Ink (www.proscribes.net) and self-described payments maven of the fourth estate. Her Today in Payments reports are a regular feature of the Merchant Sales Podcast.

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