Holiday 2025: Win Shoppers With Deals, AI, and Seamless Experiences

With inflation and rising prices looming, U.S. consumers are gearing up for the 2025 holiday season with a sharp focus on value and convenience.

A recent Holiday Survey report from Monetate of 1,500 shoppers reveals that more than two-thirds (67 percent) are worried about costs, and 76 percent are hunting for deals to stretch their budgets. Yet, there’s optimism: over 50 percent plan to spend as much or more on gifts as last year, with 60 percent ready to splurge on themselves or loved ones.

Retailers, take note: This holiday season, success hinges on delivering personalized, artificial intelligence-driven experiences and seamless omnichannel journeys that balance bargain-hunting with selective indulgence. Here’s how to win shoppers’ hearts — and wallets — in 2025.

Shoppers Demand Value and Personalization

Imagine a small apparel retailer, Main Street Boutique, struggling to compete with big-box giants during the holidays. By tapping into customer data and AI tools, it boosted conversions by 18 percent last season. How? The boutique offered tailored promotions (e.g., bundling cozy sweaters with discounted accessories) based on shoppers’ browsing habits. This is the power of personalization.

Monetate’s survey shows:

• Deals are king: 76 percent of shoppers prioritize discounts to offset rising costs.
• AI is a game-changer: 69 percent are open to AI-driven gift ideas and deals, though 30 percent worry about privacy.
• Spending priorities: Apparel and footwear top the list (46 percent), followed by electronics (35 percent) and groceries (34 percent).
• Splurge season: 40 percent plan to splurge on electronics, 37 percent on travel, and 34 percent on dining or entertainment.

Consumers also want flexibility: nearly two-thirds (65 percent) will lean on retailer websites and apps, 58 percent prefer in-store shopping, and 21 percent love buy online, pick up in-store (BOPIS). Online stores (63 percent) and mobile devices (43 percent) slightly edge out physical stores (42 percent), signaling the need for unified experiences.

4 Strategies to Dominate Holiday 2025

To capture cost-conscious yet optimistic shoppers, retailers must act fast. Here are four proven strategies:

1. Hook bargain hunters with smart promotions.

Use AI to deliver real-time deals tailored to shoppers’ behaviors. For example, offer private-label alternatives to price-sensitive customers or bundle essentials (like groceries) with indulgences (like electronics) to boost order values by up to 25 percent. Main Street Boutique saw success by using dynamic A/B testing to fine-tune discount thresholds based on past purchases.

2. Create frictionless omnichannel journeys.

Shoppers expect seamless transitions between online and in-store. Send geo-targeted BOPIS reminders or loyalty rewards via mobile apps to drive 30 percent more conversions. Simplify gift-giving with AI-powered gift finders, especially after shipping deadlines pass, to keep customers coming back.

3. Build trust with ethical AI.

Address privacy concerns by using consent-based AI for personalized gift guides. Integrate customer reviews and trusted recommendations to speed up decisions. Transparent AI builds loyalty — shoppers are 20 percent more likely to return when they feel their data is handled responsibly.

4. Experiment relentlessly.

Test and tweak promotions with A/B testing to uncover what resonates. Scale winning strategies, like targeted gift card pop-ups, to drive repeat visits and long-term loyalty. Continuous experimentation fueled Main Street Boutique’s 15 percent sales lift last holiday season.

Seize the Season

Holiday 2025 is a balancing act: shoppers want deals but aren’t afraid to splurge. Retailers that use AI to deliver personalized value, unify online and in-store experiences, and build trust will come out on top. Take a page from Main Street Boutique’s playbook — leverage data, test boldly, and create shopping moments that keep customers coming back. This season, don’t just compete, win.

Steve Maher is the chief executive officer of Monetate, a leading provider of digital merchandising, testing, and personalization technology and services.