As we approach the end of winter, the 2025 holiday shopping season has long since ended, painting a complicated picture with heavy implications for the year to come and future holiday seasons. Key dates like Black Friday and Cyber Monday saw significant improvements in spending over 2024, propelled higher by optimized deals and AI assisted shopping, but underpinned by economic anxiety and unusual shopping behaviors.
Black Friday Breakthroughs
Despite a year of questions revolving around the shifting economic landscape of tariffs and supply chain challenges, Black Friday and Cyber Monday saw significant lift over 2024.
According to internal data, we saw a lift in foot traffic of 15-23% relative to average Q4 performance at brick and mortar retail stores nationwide. ABC also reported that digital spending on Thanksgiving increased by 5% compared to 2024 totalling $6.4 billion, only to be topped again on Black Friday as spending increased nearly 9% compared to 2024 adding up to $11.8 billion.
General spending wasn’t the only thing exceeding expectations this year – according to Forbes, data from TikTok shows that 50% more people turned to their online marketplace for shopping compared to 2024. Sellers promoting their products on TikTok livestreams experienced an 84% growth in sales, generating over $500 million in sales over the Black Friday / Cyber Monday weekend.
Although the inroads TikTok made this holiday season are considerable, an even more notable upward trend was that of AI-assisted shopping. Forbes also reported that 37% of shoppers employed AI in their purchases last year, increasing to 53% when narrowed down to shoppers between the ages of 18 and 34.
The applications of AI when it came to holiday shopping varied. Per Forbes, 43% of those surveyed reported using AI to help them research products, 34% used it to compare prices and deals, and 31% used AI to generate gift ideas.
According to Retail Dive, AI traffic to U.S. retail sites on Black Friday skyrocketed by 805% compared to 2024, with nearly $3 billion in online sales being facilitated by AI tools and agents during Black Friday.
With the widespread incorporation of AI into most online search engines, apps, and stores, it is hard to pin down exactly how much the AI tools referenced in the data actually drove sales, but one thing is clear – the scope of AI adoption and integration is absolutely staggering. Avison reported that traffic from generative AI sources increased by 1,300% year over year on average, with extreme peaks on key shopping dates like Prime Day in July, showing a 4,700% increase over the previous year.
All Roads Lead To Uncertainty
Although we saw increases in foot traffic, spending, and the adoption of promising new shopping behaviors in the 2025 holiday season, there are undeniable symptoms of increasing economic anxiety lurking just beneath the surface.
To start, Black Friday 2025 saw the hot ticket items of the day shifting from new electronics and appliances to bare necessities. Data from Bazaarvoice showed that the categories with the biggest surges this year included Health & Beauty with an increase of 20.1%, food, beverage, and tobacco with a 17.1% increase, and pets with a sharp 222.5% increase. Meanwhile, electronics and apparel both displayed significant declines, down 17.6% and 12.3%, respectively.
Although we saw increases in foot traffic in our own internal data, there was a notable difference in which businesses that foot traffic went to. Instead of visiting individual retailers, the vast majority of foot traffic this season went to big box stores and malls. This trend towards big box stores & malls made waves industry-wide. “The Costco Economy is a sign that middle class families feel squeezed,” Navy Federal Credit Union Chief Economist Heather Long said, “Inflation is ticking back up, and unemployment is rising. The middle class is still spending, but they are focused on the basics and little splurges.”
The Elephant In The Room
These two pieces form a very fractured picture – at the intersection of increased sales and economic anxiety, we find consumers exhibiting shopping behaviors that can be described as erratic at best.
E-commerce expert Marty Bauer of Omnisend honed in on the flighty nature of deal-driven impulse buying around retail holidays like Black Friday. “When everything feels urgent (‘Only 2 left!’) shoppers are more willing to take chances, buying multiple sizes, colors, even brands they’re unsure about,” Bauer said. “Many of those orders end up going back once people realize the purchase was driven by the discount, not real need.”
Consumers going back on purchases made due to deal-induced excitement is one thing, but we are faced with much more radical issues in the face of economic uncertainty. A survey from the University of Michigan found that consumer sentiment has fallen to it’s lowest point since a peak of pandemic-era inflation in 2022.
Furthermore, as of October 2025, Paypal reported roughly half of buyers were planning to use buy-now-pay-later (BNPL) services for holiday shopping as a means of managing their holiday budget. And that’s just the beginning – according to Yahoo! Finance’s breakdown of the Buy Now Pay Later Services Market Report 2026, BNPL services are projected to expand from $10.87 billion in 2025 to $14.09 in 2026 at a compounded annual growth rate of 29.6%. The report further estimates that by 2030, the BNPL market will skyrocket to over $37.2 billion. When paired with recent reports estimating 41% of people using BNPL services have made at least one late payment, up from 34% just last year, these findings portend increased debt and financial strife for the average consumer in the immediate future.
While the 2025 Holiday season seems to have been a success by most conventional measurements, this does beg the question – how much further can consumers kick the can before they run out of road? Furthermore, what happens when these debts cannot be collected?
The Growing Allure Of Q5
As consumers have spread their budgets over longer periods of time in recent years to make ends meet for the Holiday season, marketers have followed suit in anticipating these behaviors. Enter Q5.
For decades, holiday sales success hinged on the several week long span between Black Friday and Christmas – but no longer. Consumers have responded to economic pressure by shopping earlier, spreading their budgets out, and chasing deals as early as possible. As of 2025, the holiday spending cycle has expanded into a near six month cycle, starting in mid-summer near Amazon Prime Day in July and stretching past Christmas, through mid January in a nearly month-long period now recognized as Q5 – a hidden “fifth quarter”.
Q5 has emerged as an opportune period for sales and marketing, as customers take a time once thought of as a sales drought to engage in increased retail activity. Between gift-card redemptions, returns that trigger subsequent purchases, and increased sales in New Years’ resolution-relevant sectors like fitness, wellness, travel, and beauty, consumers are stretching their holiday budgets beyond traditional bounds by more than ever.
Many consumers didn’t even bother waiting for December 26th to begin their post-holiday shopping – Visualsoft reported an increase of 116% in food and beverage purchases on Christmas Day, as well as a 59% increase in jewelry/watch purchases, and a 50% increase in fashion and footwear.
Q5 is not a brand new-phenomenon, as articles and think pieces discussing its potential have been gaining traction since the early 2020s. However, the 2025 holiday season seems to represent a turning point in awareness, as Google Trends displays a massive increase in searches for terms such as “Q5 Marketing” starting as early as June of 2025 and peaking in December.
So long as consumers continue to face economic pressure, retailers and marketers would do well to keep in mind the potential of Q5, as well as other purchase-driving innovations in AI and social media spaces.
Roundup & New Tariff Troubles
All in all, 2025 paints a very complicated picture for the retail market. On one hand, sales are up during key retail holidays, bolstered by new markets and AI-augmented shopping practices. On the other, consumers are clearly exhibiting more bearish behavior as evidenced by what they were spending their disposable income on and where they chose to spend it. This perspective is only further supported by reports showing consumer morale dropping to its lowest point in years in addition to increased returns and use of pay-as-you-go programs.
While the holiday shopping season has received a slight stimulus in the form of Q5 post-Christmas purchases, the only truly certain element of the retail sector right now seems to be uncertainty. There is no more timely example of this volatility than last Friday’s Supreme Court decision to overturn President Trump’s controversial tariff agenda, which Trump rebuked within hours, announcing a new 10% global tariff as well as his intention to challenge the ruling and maintain current tariffs.
“They’ve got to be pulling their hair out over all of this,” said Mark Zandi, chief economist at Moody’s Analytics. “They’re going to invest less, they’re going to hire less, they’re going to be less aggressive in their expansions,” putting a severe damper on economic growth in the near future. Regardless of the vast array of opinions on the tariff ruling it is evident that this chapter is far from over in our current economic landscape, and as such, businesses will have to proceed with caution in the face of such conditions.
What chain reactions could be awaiting the market in the coming weeks in the wake of this announcement? How can businesses maintain momentum while taking precautionary measures as the year progresses? And perhaps the biggest question of all, which of these two titanic political entities will hold fast and ‘win’ in such a massive, high-stakes game of chicken?
About Esquire Advertising
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