Americans plan to spend 5.5% less this holiday season, marking a decline to 2024 levels. But the pullback isn't uniform. Lower- and middle-income households are showing greater signs of pressure, while higher-income households remain a stronger spending anchor. 

Despite tighter budgets, consumers aren't walking away from the holidays. Instead, they're making greater trade-offs such as drawing on savings, seeking out deals and turning to AI to manage costs.

Inflation is changing how and when consumers shop. Many are shopping early, budgeting and weighing the want for more gifts against the need for everyday essentials.

Only a pretty insignificant percentage of consumers believe advertised discounts fully reflect true savings, signaling that shoppers are scrutinizing promotions more carefully and putting greater pressure on retailers to demonstrate credible value.

If consumers don’t fully trust the discount, how do brands win on value? 

Even as shoppers cut costs, they aren't willing to sacrifice everything that makes the holidays feel like the holidays.

The result is a more selective consumer, one who is looking for savings while protecting the purchases and experiences that matter most.

AI continues to become a more established part of holiday shopping, helping consumers navigate an increasingly value-conscious purchase journey. Shoppers are using it primarily as a decision-support tool, while maintaining control over the final purchase.

At the same time, social commerce is moving discovery and transaction closer together, with TikTok Shop gaining traction as a destination for deal-seeking and direct purchasing during key holiday shopping moments.