In 2024, small businesses saw a rebound, with performance exceeding expectations. 79% of respondents in Bluevine’s Small Business Owner Success Survey are confident for 2025. While customers are cautious about the economy, they plan to spend 5.7% more on holiday expenses compared to 2024, according to Simon-Kucher’s survey.
Shoppers across income brackets plan to maintain or increase holiday budgets, with 65% of households matching or exceeding last year’s budget. Higher-income households earning $75,000 or more are even more likely to maintain spending levels, with 84% planning to do so, according to McKinsey and Optimove surveys.
Despite overall cutbacks, holiday traditions like gift-giving remain popular. Customers will spend more selectively, seeking sales and deals, according to PwC and Mailchimp, and Canvas8. Implementing AI in holiday marketing can be beneficial but requires transparency and support for employees’ expertise, as per Bluevine’s research and Attest’s findings.
Inflation concerns are easing, but tariff uncertainty is rising, affecting gift availability and pricing. 77% of shoppers believe tariffs will affect their holiday spending, prompting early shopping to beat price hikes, according to Simon-Kucher and Optimove. Price cuts and discounts may lead to a continuous holiday sales period, as seen in Adobe’s 2024 data.
AI tools are increasingly favored by small business owners, but customers remain skeptical due to privacy concerns and job losses. Personalized use cases can increase trust. Different demographics have varying levels of trust in AI, with men more likely to trust its usage, according to Bluevine and Attest. Trust in AI language models is growing, impacting customer research and website traffic.
Holiday spend is expected to be intentional, with customers planning to shop on Black Friday and Cyber Monday. Online and in-store shopping will be popular, with social media playing a significant role in direct purchases. Social media platforms like Instagram, Facebook, TikTok, and YouTube are key channels for gift buying, as per Basis Technologies and GWI.
Flexibility in shipping options is crucial in the days leading up to Christmas, with expedited shipping and in-store pickup being essential for last-minute shoppers. Providing options like curbside pickup can enhance customer experience. After Christmas, expect a surge in gift card redemptions, with mobile sales peaking on Christmas Day, according to Adobe Analytics.
AI content strategies are gaining importance, with 49% of shoppers likely to use LLMs like ChatGPT for gift research. Optimizing websites for AI-generated responses can improve visibility. Implementing keywords across site elements and updating Google Business Profiles can enhance online presence and customer engagement, as suggested by Bluevine.
Read more at Yahoo Finance: Small Business Holiday Trends To Watch This Year