Holiday Online Sales Growth Slows as Shoppers Prioritize Essentials

The upcoming 2025 U.S. holiday shopping season is anticipated to experience a slowdown in online sales growth compared to the previous year. According to a recent Salesforce forecast, online spending between November 1 and December 31 is projected to increase by 2.1% to reach $288 billion. This figure marks a deceleration from the 4% rise, totaling $282 billion, observed during the same period in the prior year, as consumers, mindful of rising living costs, are expected to be more selective with their purchases.

This subdued outlook is consistent with recent analyses from other prominent firms such as Deloitte and PwC, collectively painting a picture of a cautious holiday season. Shoppers are expected to pivot their spending towards essential items, actively seek out more significant discounts, and reduce non-essential discretionary expenditures, reflecting the ongoing influence of economic uncertainty on consumer sentiment.

In the lead-up to this crucial retail period, major retailers have presented varied financial projections. While some, like Walmart and Macy's, have incrementally raised their outlooks, others such as toymaker Mattel have lowered theirs. Target, meanwhile, has chosen to maintain its annual expectations. Salesforce's Director of Strategy and Consumer Insights, Caila Schwartz, highlighted a potential concern: "if more consumers get more surprises from import fees than they do now from carriers, that could potentially have an impact on e-commerce."

Despite an overall inclination for retailers to approach promotions with more caution this year, several major chains are already initiating their holiday deal campaigns in October. Amazon is set to host its second Prime Day event of the year on October 7 and 8. Target announced its deals week would commence on October 5, featuring products ranging from holiday decor to toys, with many items priced under $20. Similarly, Walmart has committed to price reductions on 500 items within its toy aisle.

Technology is poised to play an increasingly vital role in driving sales. Artificial intelligence (AI)-powered recommendations and agent-assisted shopping are forecast to significantly boost consumer purchases. Salesforce estimates that these advanced technologies alone will contribute $51 billion to U.S. online sales, accounting for a substantial 18% of the total projected sales for the holiday season.

Salesforce’s comprehensive forecast is built upon a robust methodology. The company meticulously analyzed data from more than 1.5 billion global shoppers across 89 countries utilizing its sophisticated cloud platforms. This extensive transactional data was further enriched by insights gathered from consumer sentiment surveys involving 5,500 individuals, providing a multi-faceted perspective on market trends and consumer behavior.