U.S. consumers are shifting their holiday spending toward practical items such as apparel and footwear, moving away from luxury goods as budget pressures intensify, according to a new First Insight report highlighted by Fibre2Fashion.
The study shows that athletic footwear is the top in-store purchase choice, with 27 per cent of shoppers planning to buy it, followed by casual apparel including jeans and button-down shirts at 26 per cent. Online shopping intentions mirror this pattern, with 27 per cent leaning toward athletic footwear and 29 per cent toward casual clothing.
The report indicates that shoppers remain highly price-sensitive. About 74 per cent expect to spend the same or less than last year, and 80 per cent say they need at least a 15 per cent discount to make a holiday purchase. Sixty-five per cent do not plan to buy any luxury goods this season, reflecting a broader shift toward value and essential categories as households manage tighter budgets.
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Artificial intelligence is emerging as a major factor in purchasing decisions, with 39 per cent of U.S. holiday shoppers planning to use AI tools such as ChatGPT, Gemini or Claude for researching gifts and comparing prices.
Among those using AI, 68 per cent say they will complete purchases directly through AI platforms. Adoption is highest among younger consumers, with 73 per cent of Gen Z users expecting AI to guide their full shopping journey from discovery to checkout.
Delivery concerns continue to influence consumer behaviour. Fifty-seven per cent of shoppers worry about potential shipping delays during the holiday season, yet 86 per cent are still willing to pay for delivery. Seventeen per cent would pay more than $20 for faster shipping, suggesting retailers with reliable logistics may gain an advantage.
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Gift cards are gaining popularity as a budgeting tool. Sixty-eight per cent of shoppers plan to buy gift cards this season, and 62 per cent intend to purchase more than they did last year, using them to manage spending while ensuring flexibility for recipients.
Social media remains a key discovery channel, with 57 per cent of consumers using platforms like Facebook and TikTok to explore gift options before completing purchases on those platforms or through large retailers such as Walmart and Target.
Greg Petro, CEO of First Insight, said the 2025 holiday season marks a turning point for AI-led commerce, noting that consumers are prioritising value, convenience and speed as their primary drivers for purchase decisions.
