‘Tis the season for…..cutting back?

I’ve been anticipating the upcoming 2025 holiday shopping season.  Some researchers have offered projections of holiday gift spending by generation. Prices will be increasing for this holiday season, mostly due to the tariffs.  It is expected that there will be fewer sales, smaller holiday shopping discounts, an earlier shopping season, and that popular items may sell out sooner.  Holiday spending in the U.S. is expected to drop by 5%, driven by a major cutback by Gen Z, estimated at 23%, due to the economic uncertainty consumers are feeling.

If you’re a little rusty about the different generations, here is a primer:

Baby Boomers are 60+ years old.

Gen Xers are 44 – 59 years old.

Millennials are 29 – 43 years old.

Gen Zers are 14 – 28 years old.

 

For this coming holiday season, here are the projected 2025 holiday budgets:

Baby Boomers will spend 5% more than last year.

Gen X will spend the same as last year.

Millennials will spend the same as last year.

Gen Zers will be hit the hardest and have 23% less to spend, particularly notable since in 2024 their budgets rose by 37%.

 

What does each generation want:

Baby Boomers want experiences, time with family, and home cooked meals.

Gen Xers are in their earning prime. They have families, they will be the big spenders, and they want big ticket items in return, jewelry, cashmere, perfume, nice things for the home.

Millennials are very practical and are setting up their homes.  They would like something they wouldn’t splurge on for themselves like a high-end blender, a nice hair tool, or a fancy coffee maker.

Gen Zers are trend oriented and will want a Labubu, the collectible plush toys, or a quality ‘dupe’ in clothing, handbags, shoes. $30 – $50 per item.

A $100 gift card will be at the top of many lists across the board, and even though it will buy less than last year, it will be considered a generous gift.

Shopping trends:

Spending habits have leaned towards the ‘dupe’ culture of finding the popular or status items ‘knocked off’ and sold at more reasonable prices.  In general, many surveys show that due to tariffs, consumers across the board expect to spend 10% less on gifts in 2025. Value-oriented spending has raised the popularity of Dollar General, TJ Maxx, and Walmart, all of which have shown increased sales.

Shoppers are increasingly using technology to decide on their holiday purchases, and 15% of Gen Z and Millennials expect to use AI to generate gift ideas.

In one news report, NBC put in a plug for a shopping website called Quince, which offers the latest and best quality men’s, women’s, and children’s clothes and items for the home at reasonable prices.

General advice for this shopping season:

Start early

Act fast

Shop the deals

Use credit card points

 

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