How E-Commerce Merchants Are Successfully Navigating The 2025 Holiday Shopping Season

As we swing from what feels like one calamity (pandemic) to another (supply chain and talent shortages) and another (recession), some merchants may be wringing their hands in anticipation of a one-two-three gut punch in the throes of the 2025 holiday season. How E-Commerce Merchants Are Successfully Navigating The 2025 Holiday Shopping Season

On the surface, there’s some merit to the worry and hand-wringing. Research shows that rising inflation, gas prices and the recession are taking their toll on holiday shopping. More than one-fourth of people plan to spend less this holiday season, and just 10% will spend more than in previous years.

If you look carefully, there’s also plenty of hope—or at least opportunity—for online merchants. Yes, one-fourth of shoppers will spend less this season; however, let’s remember that online shopping exploded for two years during the pandemic into a more than $5 trillion market. From a historical perspective, online shopping has gone from explosive growth to “mere” growth. A large percentage of buyers are still spending more online every year.

That doesn’t mean it’s going to be easy. E-commerce merchants who know where to look, how to target demographic desires and how to evolve quickly are successfully navigating what feels like extraordinary and uncertain times this holiday shopping season. Here’s a look at how.

Young and high-income shoppers are spending

According to McKinsey research, young and high-income shoppers are spending more this holiday season, providing a significant opportunity to counter spending dips in other demographics.

Calibrate your marketing and brand promises to these demographics. Shore up the mobile shopping experiences and technologies they love. With younger buyers, your efforts also have other long-tail effects. They generally share their shopping habits on social media and actively promote (or punish) vendors based on their experience, amplifying your brand without further marketing spend.

Sustainability is on the rise

Younger buyers spending this season have different motivations for merchants to map to. One of the top motivators? Environmental sustainability. According to research, “one-third of Millennials will choose a sustainable alternative when available.” Last year, that demographic was willing to pay substantially more for sustainable products, delivering higher margins to merchants or covering increased costs from sustainable practices.

And 65% of all U.S. buyers (of all ages and incomes) consider sustainability when making purchases, just maybe not to the extent of younger shoppers.

Moving forward, merchandising strategies should move sustainability to the forefront for all buyers (and the planet). Merchants who can produce and effectively promote sustainable products, deliver in environmentally friendly packaging and communicate delivery strategies that aren’t slashing trees or burning ozone can better target this high-spending group and tap into their emotionally based environmental desires.

Shoppers always bite on bargains

Every buyer in virtually every situation loves a good bargain. For the demographics spending less, bargains are one of a merchant’s best bets. Clearly display discounts on items, market your sales and coupons and make sure those discount codes work. About 80% of shoppers switched brands last year, creating an opportunity to promote alternatives at a lower price. And discounts aren’t only about attracting bargain hunters. Bargains are also a great strategy to clear excessive inventory, drive up shopping cart amounts and carry out other fundamental practices that keep your business healthy.

Free shipping continues to shine

With the pain of fuel prices and rising shipping costs, it may be tempting to clamp down on free shipping. Don’t.

Research shows that most shoppers expect free shipping, which is one of the greatest influences on purchasing and satisfaction. Smart merchants capitalize on those desires, intelligently pushing increases in cart sizes for free shipping, or offering free shipping on the least expensive shipping to the merchant or as part of targeted sales to desirable demographics.

Boost enrollment in your loyalty programs with free shipping on orders of any size so your expense has the potential to do more than simply close a single sale.

Relentlessly monitor behavior to capitalize on interest and intent

Online merchants spend a fortune driving traffic to their sites. Beyond offering pleasing products and brand promises, e-commerce merchants must read and adapt to the shopping signals.

At the same time, consumers are on-site—or spend lavishly again to bring another potential shopper to their domain. Merchants need to relentlessly look at data to adapt merchandising strategies and deploy the variety of clever and cost-effective technologies available to understand and adapt to behaviors automatically.

Once you understand those buyer patterns, you can then further target similar buyers and personas in your search and advertising spending, driving down those costs by eliminating visitors with a likelihood of low interest and intent. And of course, if you understand the intent from the beginning, you’re less likely to end up with profit-crushing returns.

No business is immune to change. What can go wrong will likely go wrong, but hopefully these tips will help you to see the opportunities in constantly changing conditions and adapt quickly to capitalize on them.