The forecast: Adobe Analytics expects ecommerce sales to rise 5.3% YoY to $253.4 billion this holiday season, a significant slowdown against the 8.7% growth from November 1 to December 31 last year.

That’s broadly in line with our forecast, which expects online sales growth to decelerate to 4.2%, as well as most other projections that expect a cooling labor market, rising prices, and weak consumer sentiment to weigh on holiday spending.

A focus on discounts: Retailers are expected to lean heavily on discounts, with Adobe forecasting markdowns of up to 28%, roughly matching last year’s deep discounting.

• Electronics discounts are projected to peak at 28% (vs. 30.1% in 2024), toys at 27% (vs. 28%), apparel at 25% (vs. 23.2%), TVs at 23% (vs. 24.2%), computers at 23% (vs. 22.8%), sporting goods at 19% (vs. 19.5%), appliances at 18% (vs. 19.2%), and furniture at 18% (vs. 19%).
• Those markdowns won’t necessarily spark a race to the bottom. Some retailers will likely use aggressive pricing to encourage shoppers to trade up to higher-ticket items. For example, the share of units sold for the priciest products is expected to jump 56% in sporting goods, 52% in electronics, 39% in appliances, 32% in personal care, and 26% in tools and home improvement. That trend, however, won’t hold across the board; Adobe expects declines in groceries (down 3%) and furniture (down 8%) as shoppers favor lower-priced options in those categories.
• Adobe also sees an uptick in home-focused purchases as consumers take advantage of deals to upgrade their living spaces. Online sales are projected to soar from January–August 2025 averages in categories like power tools, home security products, TVs, refrigerators/freezers, and smart home devices.

A sharp focus on value: Consumers’ average holiday budgets are set to shrink 10.2% this year to $1,133, down from $1,261 in 2024, as cost-conscious shoppers double down on value amid macroeconomic headwinds, according to JLL’s 2025 US Holiday Shopping Survey.