Online sales and discounts ahead of the upcoming holiday season may be smaller than in previous years, all thanks to Trump’s tariffs.
U.S. shoppers are expected to continue spending at record levels, with online spending predicted to jump up 5.3 percent to $253.4 billion. Despite the year-over-year total gain, the growth is considerably slower than last year’s 8.7 percent increase, according to projections from Adobe Analytics.
“We do expect the discounts to be a little weaker than 2024’s holiday season, but pretty much on par with where we saw discounts at in 2023,” Vivek Pandya, the director at Adobe Digital Insights, told MarketWatch.
The biggest deals this season will run at 28 percent for items such as electronics – compared to discounts of 30 percent on those types of items last year, according to the Adobe data.
High costs for items such as groceries will likely hold steady, as Americans buy products in bulk amidst looming tariffs imposed by President Donald Trump.
Even as stockpiling has prevented discounts from running any lower, there haven’t been many issues with items going out of stock online, Pandya said.
While a U.S. Court of Appeals for the Federal Circuit ruled most of Trump’s tariffs were not covered by the emergency powers law he used to impose them, they have remained in place while his administration appeals the ruling.
“We see a consumer being very cautious and strategic in how they buy in order to get the most value, and the online sector is supporting the most in the effort,” Pandya said.
As Americans face higher costs of living, discounts wherever possible – including during big sales events leading up to and on Cyber Monday – play an inflated role in holiday spending.
Cyber Monday, a massive day for online shopping held the Monday after Thanksgiving, is expected to be the biggest online shopping day of the season and year, with sales rising 6.3 percent to $14.2 billion on the day, according to Adobe.
However, sales will start much sooner. Adobe estimates shoppers will spend $9 billion on Amazon’s October Prime Day event from October 7 and 8. Similar events held by Target and Walmart are also expected to drive spending over those days.
Retailers have issued mixed outlooks ahead of this holiday season, with Target and Best Buy maintaining their annual forecasts while Walmart and Macy’s raised theirs, according to Reuters.
Meanwhile, Mattel executives noted “general uncertainty regarding consumer demand” during the second half of the year, but remained optimistic about the demand for Hot Wheels, Barbies and 30th anniversary Toy Story toys.
Competitive discounts are expected to “drive shoppers to ‘trade up’ to higher-ticket items in certain categories,” allowing them to “get more value out of their dollar,” according to Adobe.
“The share-of-units-sold for the most expensive goods is set to rise by 56 percent in sporting goods, 52 percent in electronics, 39 percent in appliances, 32 percent in personal care and 26 percent in tools/home improvement,” Adobe said in a press release.
That trend, however, reverses in groceries (down 3 percent) and furniture (down 8 percent), as shoppers embrace lower-priced items in these categories,” the firm said.
The forecast also sees shopping on mobile devices driving 56.1 percent of total online spending compared with desktop shopping.
Additionally, “buy now, pay later” options are expected to drive $20.2 billion in online spending, roughly $2 billion more than the 2024 holiday season, according to Adobe.
“Buy now, pay later” options grew in popularity during the pandemic, especially among young people. These loans help consumers make larger purchases without paying interest, but can also be overused.
About four in 10 Americans under the age of 45 say they’ve used “buy now, pay later″ services when spending on entertainment or restaurant meals, or when paying for essentials such as groceries or medical care, according to an August poll from The Associated Press-NORC Center for Public Affairs Research.
Meanwhile, PwC’s Holiday Outlook 2025, predicts holiday spending in the U.S. will fall, with Gen Z consumers in particular spending less.
According to the report, Americans are expected to spend an average of $1,552 this holiday season, which is down 5 percent from last year.
