Why
it matters:
- Consumers are worried about their budgets and concerned about price increases in 2025, meaning retailers and brands will have to work harder to grow sales.
- How consumers are shopping is changing rapidly, with more than half of online purchases being made on phones and other mobile devices and 86% of shoppers using social media to get product recommendations.
- Chatbots are becoming key salespeople, with AI shopping assistants driving $14.1 billion in sales on Black Friday.
This
holiday season, Americans spent more time shopping on their phones
and less time shopping in stores. They used new shopping apps and
online marketplaces, and they rewarded brands and merchants who knew
how to reach them where they were browsing or buying.
With
the retail environment expected to be challenging in 2025, as
cost-conscious consumers worry about possible price increases, brands
and stores need to be able to connect effectively with shoppers.
Here
are the key lessons from this holiday season that retailers will be
leaning into in 2025.
Retailers
need to prioritize mobile shopping
E-commerce
was the big winner this holiday season, with online purchases
expected to be up 8% to 10%, while overall retail is forecast to grow
by 2.5% to 3.5%.
This
year, for the first time, the majority of online purchases were made
on phones and other mobile devices, according to Adobe Analytics,
which tracks e-commerce sales.
On
Cyber Monday, 57% of online sales, worth $7.6 billion, were made on a
mobile device, Adobe reported.
That is up 13.3% over the previous year and nearly double what it was
in 2019, when only 33% of Cyber Monday sales were made on a mobile
device.
Of
course, consumers aren’t just buying on their phones— they’re
also using them extensively to browse and find information before
making purchases. A survey released by social commerce solutions
company Bazaarvoice
found that 75% of consumers browse online before making purchases in
stores, a process known as “webrooming” in the retail industry. A
smaller percentage—just under 60%—say they do “showrooming,”
or browsing in physical stores before buying online.
The
increased use of mobile for both buying and browsing highlights the
need for businesses to have mobile stores with easy checkout and
browsing interfaces.
Brandon
Isner, Head of Retail Research for commercial real estate advisory
firm Newmark,
said physical retailers are responding to the growth in mobile
shopping by “investing in curbside pickup infrastructure and
seamless click-and-collect systems that integrate mobile convenience
with in-person engagement.”
[Read
more: Proven Ways to Fight Retail Theft This Holiday Season Yield Year-Round Business Lessons]
Social
media is where retailers will find shoppers
One
of the drivers of the surge in mobile shopping is the growing number
of brands selling on social media sites such as Facebook,
Instagram,
YouTube,
and TikTok.
This
holiday season showed that consumers are increasingly comfortable
click-and-buying while watching social media content.
According
to Bazaarvoice, in 2021, over half of consumers, 55%, said they never
shopped on social media. This year, that number dropped to 24%. Gen
Zers are the biggest shoppers on social, making one to two purchases
on social media each month.
The
overwhelming majority of shoppers, 86%, said they seek out and engage
with creator content on social media before making a purchase
decision.
Those
numbers show that “to succeed today, brands and retailers must meet
their customers wherever they shop—especially on social platforms,
where consumer engagement and comfort with purchasing are on the
rise,” said Zarina Lam Stanford, Chief Marketing Officer at
Bazaarvoice, when releasing the survey results.
During the first part of Cyber Week, the five-day shopping period between Thanksgiving and Cyber Monday, retailers who used generative AI for customer service saw a 9% higher conversion rate.
AI-powered
chatbots will be key to driving sales
Retail
forecasters predicted that this would be the first AI-assisted
holiday shopping season and that prediction proved true. On Black
Friday alone, AI and AI-powered shopping assistants drove $14.1
billion in sales globally according to e-commerce tech company
Salesforce.
During
the first part of Cyber Week, the five-day shopping period between
Thanksgiving and Cyber Monday, retailers who used generative AI for
customer service saw a 9% higher conversion rate.
“For
an industry that is often concerned with margins, especially ahead of
rising costs in 2025, this percent increase is a game changer,”
said Caila Schwartz, Director of Consumer Insights at Salesforce,
when releasing the holiday statistics.
By
using AI, “retailers are better equipped to serve the needs of
their shoppers and drive them to the buy button,” Schwartz said.
Adobe
found that consumers are responding favorably to suggestions from
AI-powered chatbots. Traffic to retail sites from chatbot-offered
links rose 1,800% year-over-year on Black Friday and 1,950% on Cyber
Monday.
[Read
more: 5 Marketing Insights to Spur Sales This Holiday Season]
Marketing
and messaging also need to be omnichannel
Retailers
learned this holiday that omnichannel doesn’t just mean giving
shoppers multiple ways to shop. They also need to use multiple ways
to reach those customers.
Along
with the growth in mobile shopping, mobile messaging surged during
the peak holiday periods.
On
Black Friday, mobile push notifications jumped 103% year-over-year,
with more marketers using mobile apps to engage shoppers, according
to Bloomreach,
an e-commerce personalization company used by 1,400-plus brands.
Text
messages were up 45% on Black Friday and 47% on Cyber Monday. Email
recommendations were up 7% on Black Friday and 35% on Cyber Monday.
Brands
increasingly must use multiple ways to reach shoppers as they make
purchase decisions via push notifications about sales and product
recommendations with more engaging messages, said Roxy Couse,
Director of Community and Content Marketing at Bloomreach.
“We
know that it takes multiple touchpoints sometimes to drive a
conversion,” and convince a customer to make a purchase, Couse
said.
The
goal for brands is “connecting the whole experience, from your
marketing emails to texts, to ads, to onsite browsing,” she said.
“In
2025 and beyond, I can see that really coming together, so you’re
using your customer data and your product data to connect those dots
and also keeping the customer top of mind in that whole experience.”
Customers
will continue to seek value, but with a premium, quality component
During
the holiday season, consumers showed that, although they are
concerned about prices, they still are willing to spend, especially
if they feel they are getting something of value.
“I
think we saw both financially stressed consumers and consumers
willing to spend. And sometimes from the same consumers at the same
time,” said Nikki Baird, Vice President of Strategy and Product at
Aptos,
a retail technology company.
In
some cases, the value lies in a great deal. In others, value lies in
a quality or premium product at a fair price. Loyalty points and cash
back rewards also figure into the value equation.
That
search for value is expected to continue to be uppermost on
consumers’ minds in 2025, as shoppers worry about possible price
increases.
Baird
said the possibility of added costs due to proposed tariffs “could
have far more impact on the future of consumer spending than any
holiday trend.”
Going
forward, Baird said, “a focus on value proposition and customer
experience is going to be what it takes to win” in 2025.
Mehmet
Altug, who specializes in retail operations as an Associate Professor
of Operations Management at the Costello College of Business at George Mason University,
believes this cost-conscious mindset means “retailers need to be
super-competitive with their prices and come up with marketing
campaigns that emphasize how consumers would benefit from their
products.”
Retailers
also need to understand what purchases consumers place the most value
on and “prioritize certain product categories over others and focus
their marketing and sales efforts on those,” Altug said.
Barbara Thau also contributed to this article.
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Published
Joan Verdon
