A retailer’s guide to the upcoming shopping season: trends to watch
by October 16, 2025
The holiday shopping season is upon us, and while it’s a time for celebration, it’s also the most critical period for retailers. This year, consumers are approaching their spending with a new mindset, shaped by economic shifts and technological advancements. To help you prepare, here are the key retail trends to know for the upcoming season, and some sales tax reminders to help you stay compliant.
1. The value-conscious consumer
Despite a generally healthy economy, many consumers are feeling a “cost-of-living squeeze” and are more cautious about their spending. According to a PwC survey, 84% of consumers expect to cut back in the next six months on items like dining out and clothing. However, this doesn’t mean they’re stopping their holiday shopping altogether. Instead, they are becoming more selective and value-focused.
- Shift in spending: While overall holiday spending is projected to be substantial, there’s a notable shift. A recent survey from McKinsey reports that gift cards, grocery items, and home goods are some of the most popular gift purchases planned this season, reflecting a focus on value and practicality.
- Scouting for deals: Consumers are starting their shopping earlier and are actively seeking promotions. In fact, 45% of consumers plan to begin their holiday shopping before November, though consumers still intend to take advantage of deals in November and December.
- Trading down: Shoppers are willing to “trade down” to more affordable brands or retailers to find a better deal. Over 75% of consumers surveyed by McKinsey said they plan to trade down to some degree.
How retailers can prepare
Focus on dynamic pricing and promotions that adapt in real-time. Highlight the value proposition of your products and consider offering tiered discounts or exclusive deals to loyalty program members. When it comes to gift cards, don’t forget there are some sales tax nuances.
The retailer’s guide to sales tax compliance
Our free guide will walk you through the basics of sales tax compliance, including retail-specific topics like product and shipping taxability.
Download now2. The rise of AI in the customer journey
Artificial intelligence is no longer a futuristic concept; it’s an integral part of the modern shopping experience. From the moment a consumer begins their product search to the final purchase, AI is playing a significant role.
- AI-powered shopping: This year, 52% of shoppers intend to use AI to help plan their holiday shopping. To put that in terms of revenue, AI agents are expected to drive 21% of holiday orders, or $263 billion in sales in the US.
- Personalized experiences: Retailers are using AI to create hyper-personalized experiences. AI-powered tools can recommend products based on a customer’s browsing history and preferences, creating a tailored and frictionless shopping journey.
- Virtual try-ons and 3D product views: AI has improved on pandemic-era innovations like virtual try-ons and 3D product views. Customers can use augmented reality on their phones to see how products, from clothing to home goods, will look on them or in their space, increasing confidence in their purchases.
How retailers can prepare
Implement AI-driven tools to enhance the customer experience, from personalized recommendations to virtual try-ons. Even small experiments with AI-enabled product viewing can make a difference. Retailers can optimize for AI shopping by creating consistent structured website content that provides detailed product listings, as well as creating an agent-responsive design. This means ensuring call-to-action buttons are clearly defined and accessible.
3. The power of social and omnichannel commerce
Shoppers are no longer tied to a single channel. They are fluidly moving between online and in-store experiences, and social media is a key driver of discovery and sales.
- Social commerce: Social media platforms have become powerful selling tools. Consumers can now see a product on Instagram or TikTok and purchase it directly within the app with just a few taps. Influencer marketing is a huge component of this, with 74% of shoppers making buying decisions based on influencer suggestions.
- Omnichannel and “Phygital” retail: The lines between physical and digital are blurring. A strong omnichannel strategy is essential, offering a seamless experience whether a customer is shopping on their mobile device or in a brick-and-mortar store. This hybrid, or “phygital,” approach is a key trend, catering to consumers who still value the in-person experience while demanding the convenience of digital tools like contactless payments.
- Mobile dominance: Mobile shopping continues to dominate. More than half of online holiday retail sales are expected to be completed from mobile devices. This makes optimizing your website for mobile a non-negotiable.
How retailers can prepare
Integrate your social media presence with your e-commerce platform to create direct sales opportunities. Ensure your website is mobile-optimized and offer popular payment options like “Buy Now, Pay Later” and accelerated payment options like Link, to reduce friction at checkout.
How to prepare for the 2025 shopping season
To succeed this holiday season, planning is key. Start early by analyzing your sales trends from last year’s and stocking up on best-selling products. Hire seasonal staff in advance to handle the increased demand and use technology to streamline operations and staff scheduling. And don’t forget to consider your sales tax compliance strategy.
Due to an increase in sales in the fourth quarter, many businesses will find themselves with sales tax obligations in new states. When you have sales tax nexus in a state, you’re required to comply with the sales tax laws in that state. Consider how the shopping season might trigger economic nexus in new states for your business, and be prepared to register for a sales tax permit in those states.
We outline how to register for a sales tax permit in each state here, or you can let TaxJar handle the registration process for you. Visit our registration page to request our team of experts manage your sales tax registration on your behalf.
Ready to automate sales tax? Sign up for a free trial of TaxJar today.
