As the holiday season rolls in, U.S. consumers are adjusting their spending habits in response to rising inflation, employment concerns, and tariff uncertainties. According to William Blair analysts, “this steep increase in pessimism suggests growing concern among consumers, likely driven by persistent inflation, geopolitical uncertainty, and tariff-related disruptions.” Even higher-income groups are not immune: the overall tone around the economy is “clearly more negative than last year.”
The result: shoppers are getting a head start. More than 40% of U.S. consumers say they plan to begin their holiday purchases earlier than usual, with nearly half saying they will start before Thanksgiving. The motivation is twofold: stretch tight budgets and avoid missing out on inventory. As retail-insights firm Circana’s chief retail adviser, Marshal Cohen observes, “Getting an earlier start on holiday shopping gives them more control and choice when it comes to making a purchase decision, rather than feeling the pressure of filling a last-minute need.”
But starting earlier doesn’t mean spending freely. Consumers are also increasingly relying on flexible payment methods. More than three-quarters of U.S. consumers now use buy-now-pay-later (BNPL) services, and about half of those surveyed say they plan to use BNPL more this holiday season for gifts. BNPL’s convenience has appeal, but analysts warn of potential downsides: for younger consumers especially, “the credit implications” of deferred-payment plans may not be well understood.
Value is also front of mind. Nearly three-quarters of consumers polled by William Blair report making cutbacks, especially younger and lower-income shoppers, with apparel seeing the biggest decline: nearly 60% say they’ll spend less on clothing, approximately 30% more than last year. In addition, the average transaction size is down even as the number of purchases inch up—a trend noticed by PayPal executives.
Retailers hoping for a holiday rebound are thus facing a more cautious, strategic consumer: one who buys early, looks for deals, and often pays later. As Cohen puts it, “Marketers need to continue to assess ways to achieve dynamic success with consumers by making their brand, their store, a destination that hits the mark on product and value at the right time.”
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