The holiday surge is set to outpace last year’s 3.5% growth rate, though retailers face a complex landscape. While in-store performance remains steady with a projected 2.5% rise, nonstore sales are expected to accelerate by 9%, accounting for 60% of total growth. Consumers are increasingly turning to AI platforms like ChatGPT and Google Gemini to navigate their purchases, with 24% of shoppers planning to start their journey on these tools.

Financial headwinds remain significant. High gasoline prices, shifting tariff impacts, and credit card delinquency rates exceeding the ten-year average are weighing on household budgets. However, these pressures are partially offset by a $43 billion increase in tax refunds and a 23% year-over-year rise in the S&P 500, which bolsters spending among higher-income demographics. Aaron Cheris, global head of Bain’s retail practice, notes that success hinges on balancing aggressive promotions with AI-driven customer service to capture share in a price-sensitive market.