The Year of the Promo: How Retailers Sustained Shopper Confidence Amid Uncertainty

In 2025, retailers were faced with the challenge of navigating an economically uncertain future. With unknown impacts of inflation, high interest rates, and a poor labor market outlook, retailers turned to promotions as a key tool to keep consumers engaged. While product quality and design remain the primary drivers for sales, shoppers are increasingly focused on getting the best deals possible.

Economic Uncertainty Drives Careful Spending

Consumer confidence in the current state of the economy has fallen drastically, leading consumers to think twice before swiping their card. The Consumer Confidence Index (CCI), which measures consumer sentiment towards the economic climate, has been steadily declining, falling 3.6 points from August to September. Similarly, the University of Michigan Consumer Sentiment Index (MCSI) reached historic lows after declining for three consecutive months in 2025. With lowered confidence in the economy, promotions can make spending feel less risky for consumers who may be hesitant to buy.

Why Promotions Matter

Promotions benefit both consumers and retailers. Shoppers feel supported and confident knowing they’re getting a better deal, and in return, retailers are more likely to see purchases. Promotions not only attract new customers, as nearly 80 percent of American shoppers say they would try a brand for the first time if offered a discount, but also encourage higher spending and more frequent purchases. Online retailers report that consumers who use coupons spend 24 percent more than those who don’t, and 67 percent of shoppers are moved to make an unexpected purchase after being offered a discount. Promotions become even more important during times of great unknowns, like the present with continued concerns about the impact of tariffs. Forty-one percent of U.S. consumers noted that they intended to look for sales to offset price increases related to tariffs in 2025.

During the holiday season, when retailers rely on an increase in traffic, promotions will be key to winning over shoppers. A deal could make all the difference, drawing in new customers and encouraging higher spending.

Not All Promotions Are Created Equal

While there has been an increase in promotions this year, it’s also becoming evident for retailers that some promotions are more successful than others. The success of a promotion depends on the message, how it’s delivered, and the relevance to the audience it reaches. If retailers fail to craft clear, targeted advertising, their promotion could go entirely unheard.

To maximize marketing return, it’s essential that messaging is delivered to the right audience. In order to reach the right audience, retailers should employ a combination of broad reach to connect with new audiences and a steady stream of regular messaging to existing, loyal customers. Many retailers try to save money and increase market share by focusing entirely on reaching new consumers. However, this is a costly oversight, as many existing customers are just waiting for the right promotion to come along to purchase. Instead, retailers should lean on tools like CRM data to re-engage existing customers who are likely to become repeat purchasers. Simultaneously, they can use data insights to identify new audiences and consumers with the highest likelihood to convert, ensuring the promotional message reaches this key demographic as well.

What’s Next

When retailers use promotional marketing, they build goodwill with current customers and entice new customers to make a purchase. Promotions have the power to encourage consumers to make a purchase or try out a new brand when they feel that they’re getting a good deal. This has proven successful for brands amid the many challenges of 2025. In today’s uncertain economic climate, helping consumers feel comfortable in their spending is incredibly important. If promotions reach the right audience, they can deliver greater returns for retailers. During this busy and unpredictable holiday season, promotions are paramount to the success of brands and the loyalty of customers.

Marly Sohr is lead of industry solutions, retail at VDX.tv, a global leader in digital advertising solutions.