Confidence in retail is rising ahead of the 2025 holiday shopping season – despite caution surrounding the Autumn Budget – with 80% of UK businesses expecting higher sales than last year (higher than the global average of 72%), according to Shopify’s Holiday Retail Report. Consumer confidence is also rebounding, with planned seasonal spend in the UK up from £159 last year to £181 in 2025.
Although confidence is positive, retailers shouldn’t mistake this for unlimited consumer appetite:
Shoppers are disciplined with a spending cap: Almost two thirds of UK consumers (63%) have set a clear spending cap – considerably higher than the global average of 51% – and 39% will stick to it closely.
Emotional attitudes to shopping impact consumer intent to buy: UK consumers are equally split between feeling indifferent (26%) and nostalgic (25%) when it comes to the holiday season. Furthermore, family and friends matter to UK consumers with 52% and 36% citing them as influencing their shopping behaviours, respectively, and 40% are driven by their mood at the time of shopping.
With the impact of economic uncertainty and rising costs continuing to be felt by retailers, holiday retail strategies are instrumental. UK businesses expect almost two-fifths (39%) of their sales to come from promotional pricing and 68% plan to introduce new types of deals.
“As we look ahead to the festive season, retail stands at a moment of renewal” said Deann Evans, Managing Director, EMEA at Shopify. “Demand is returning, and confidence is stirring, but shoppers are more discerning than ever and will be selective with where they spend. With consumer optimism changing the attention economy, businesses must ensure their holiday retail strategies cut through the noise and take advantage of increased spend this year. AI-powered shopping and a renewed appetite for discovery are defining this year’s festive season. Shoppers no longer think in channels, the lines between online and in-store have blurred. They expect seamless checkout, effortless transitions, and small moments of delight throughout the journey. Brands that remove friction, meet customers where they are, and add value before and after the sale will be the ones to win loyalty this season and beyond.”
AI use is growing, but shoppers still want human connection
Business and consumer sentiment around AI in commerce is increasing. 90% of business decision-makers in the UK feel positive about the impact of AI-driven features in the year ahead – above the global average of 81% – with 93% already or planning to invest in it to help customers discover or buy their products through AI shopping assistants.
Two-thirds (66%) of UK shoppers say they’re likely to use AI for holiday shopping, with use strongest for finding inspiration and discovering products. Still, trust is key: 67% of consumers remain wary of AI and 74% say buying from a person still matters. Brands have a clear opportunity here. The most successful businesses will pair AI-powered personalisation with transparent controls and easy access to human support, building trust and comfort as shoppers try new technology. The message is clear: there is scope for more AI adoption, and brands that balance tech‑enabled personalisation with human service will have the strongest advantage.
The rise of AI in commerce is reshaping how consumers shop during the holiday period, and how businesses serve them. 27% of UK shoppers intend to use AI to help them find deals this year, while 20% will use it to find inspiration and discover products. Over a third (36%) – more than the global average of 28% – have purchased more from brands that provide personalised product recommendations (e.g. through AI chat functions).
Product discovery is back (everywhere)
One promising trend is that shoppers are rediscovering products across channels, likely because of increased optimism and willingness to spend. 80% of those in the UK (higher than the global average of 74%) said they are more likely to discover a product across different channels compared to 70% in 2024. Discovery through physical retail and online are both up 19% year-over-year, suggesting UK shoppers are once again moving fluidly between digital and physical spaces. Advertising, particularly digital, has also regained influence, with almost one in three saying they’re using it more than they were last year to discover products. Discovery through social media is also on the rise YoY, with 23% using social media ads more, 19% influencers more, and 29% using brand and family connections more. With discovery up across channels, a unified commerce approach is essential for agile brands.
Hybrid shopping experiences now standard
The hybrid model of shopping has become the norm, with 41% of UK consumers planning to evenly split their shopping between online and offline this year – higher than the global average of 37%. Among those planning to spend the most this season, 46% of UK consumers said they go online to buy small things but go into stores for larger purchases. But friction at checkout remains a major issue. 50% of all UK shoppers said they’ve abandoned purchases in the last 12 months due to lengthy or complicated checkout experiences. Businesses that streamline this step, both online and in person, will be best placed to capture conversion.
Half (50%) of UK consumers said that beyond deals or promotions, they are looking for fast, simple shopping from brands this holiday season – just above the global average of 46%. Almost half (44%) of UK consumers said discounts are key to retaining their loyalty, and for 33%, great customer service is critical, suggesting that experience and relationship matters as much as earning potential. This underscores the season’s importance for businesses to convert consumers into long-term advocates. Businesses need a blend of discounts and schemes to drive loyalty and build lasting customer relationships beyond the holiday season.
