How Shifting Consumer Behavior Is Redefining Holiday Retail Strategy

The holiday season is always a high-stakes game for retailers, but this year, the rules feel different. Faced with economic headwinds, consumers are more calculated, value-minded, and mission-driven than ever.

In a recent webinar hosted by Industry Dive, Revionics' senior director of strategy and innovation, Matt Pavich, sat down with fellow retail experts from Retail Dive and PwC to discuss how retailers can address the challenges ahead for the coming busy shopping season.

Watch the webinar on-demand now to catch the full discussion, or keep reading for our key highlights below.

The Great "Pull-Ahead" Is Real

If you feel like the holiday season started before the leaves even changed, you're not wrong. According to Pavich, this behavior is largely driven by an effort to get ahead of anticipated tariff-related price hikes.

This isn't just a consumer trend; it's a market-wide shift. As PwC's Ali Furman noted, retailers have also been pulling inventory forward to mitigate tariff impacts. This alignment between retailer strategy and consumer behavior has created an elongated, high-pressure peak season.

Meet the "Economizing" Consumer

The central character this holiday season is the value-oriented, budget-conscious consumer. Pavich emphasized that we will continue to see the "economizing of the consumer," a trend that has been building for several years but is now accelerating.

"Private-label brands are growing more than twice as fast as the ten largest consumer brands," Pavich noted, highlighting a significant shift in loyalty. Consumers are actively trading down to find value, and they're not shy about it.

This is amplified by what Furman described as a massive surge in deal-seeking behavior, with Google searches for "discount" and "coupon code" up 11% year-over-year. For younger generations like Gen Z, who are the least brand-loyal, private label isn't just a backup — it's a "really great option" when the value proposition is clear, Furman said.

The Antidote to Margin Pressure: A Strategic, Analytically Driven Play

With costs rising and consumers hunting for deals, how can retailers protect their margins? According to Pavich, the answer isn't blanket promotions. In this environment, untargeted discounts are simply "margin drains."

Instead, success requires a "strategic, analytics-driven play." Pavich argued that retailers must leverage sophisticated AI and analytics to:

• Offer the right promotion for the right item. Understand which products consumers care most about and focus promotional efforts there.
• Eliminate ineffective promotions. Identify the deals that aren't moving the needle and are simply eating away at your bottom line.
• Collaborate strategically with vendors. Use predictive analytics to model the impact of cost increases for data-backed negotiation power.

AI Is the New Shopping Assistant — and Retailers Must Adapt

Perhaps the biggest game-changer for this holiday season — not just for retailers but also for shoppers — is the rise of AI. As Furman pointed out, consumers are already using AI to discover brands, compare prices, and stick to a budget.

For retailers, this "hyper-focuses" the need for competitive and transparent pricing. As Pavich explained, when a consumer has a specific item on their wish list, they have more tools than ever to find the best price. "If you have the best price, you'll win that sale," he stated. It's no longer about who the consumer sees first; it’s about who offers the best final value. This means retailers must ensure their brands and products are discoverable by AI, with detailed specifications and rich, contextual information that AI models can read and recommend.

Ultimately, the message is clear: This holiday season will be won by the retailers who listen to the data, meet the consumer where they are, and approach pricing not as a guessing game but as a science.

Check out the webinar, "The consumer and the economy: What shoppers are looking for this peak season," to learn more.