Well, Q4 is here, and it should be an interesting one.
For many companies, the (legitimate) start of Pumpkin Spice season through the end of Peppermint Mocha season is the Super Bowl. From toys and apparel to insurance open enrollment, fiscal years will be made or broken in the next three months. Even in B2B businesses like ours, capturing the deluge of seasonal ad dollars or winning a place in clients’ F26 budgets all happens now.
Holiday retail, of course, is the bellwether. A few big consulting firms forecasted a decline in spending this year by as much as 5%. Hogwash. Our data, along with the industry experts we trust, anticipate sales growing somewhere between 2.5-3.5%. That’s only slightly above the rate of inflation but, still, up and to the right is always better than the alternative.
Complicating holiday sales numbers is the growing tendency of consumers to start their gift-buying earlier and earlier. We began detecting it a few years ago during Amazon Prime Days in July. This year, some consumers reported making holiday purchases as far back as April, borne of post-Liberation Day tariff fears. Overall, 35% of U.S. holiday shoppers say they’ve already started buying, the highest level we’ve seen at this point in the year.
One area where our predictions for the upcoming season depart from other prognosticators is our outlook for younger and lower-income consumers. Indeed, these cohorts have shown a discernible pullback in discretionary spending. As prices rise and household debt mounts, it would make sense for this trend to continue through Christmas.
But consumers are telling us otherwise. Young and lower-income shoppers indicate that they plan to spend the same or even more on the holidays this year. Yes, people often say one thing, wishfully, and do another. But we’ve been tracking this stuff long enough (13 years) to know it means something.
Our theory is that the holidays represent the quintessential “well-being” period. When the world feels like it’s burning, reaching the end of another tumultuous year is reason to splurge – come hell, high water, or dangerous credit card balances. We’ll go back to being disciplined and frugal in Dry January.
It doesn’t mean people won’t be chasing deals to stretch their dollar. If you can compete on discounts and promotions, you absolutely should. Just be careful if your brand is an aspirational one. Racing to the bottom on price in the short-term could damage your equity in the long-term.
Work hard to figure out when your likely shopper is ready to buy, so you can catch them at precisely the right moment. Some are browsing now, others will wait for Black Friday, and many – like me – will procrastinate. Fortunately, those things are predictable or at least detectable in real-time with the right data.
Lastly, think about which of your vulnerable competitors you can conquer. Consumers are promiscuous in times like these. It’s the perfect time to steal share.
We can help you with all that.
Happy hunting.
Here’s what we’re seeing:
Americans need some happy holidays. On theme with today’s intro, we published our latest Emotional Well-Being Index this week, finding that U.S. adults are in an increasingly dour mood. Feelings of stress, fear, sadness, and worry all jumped across the population in September, no doubt influenced by the tragedy and aftermath of the Charlie Kirk murder. Continued employment uncertainty is also weighing on American workers in unprecedented ways. Net-net, our collective emotional state hit its lowest point this year, well below the most divisive moments leading up to (and after) the election in 2024. Even the Steelers’ promising 3 and 1 start hasn’t lifted our spirits.
A lot of holiday travelers are up for grabs. After a rocky early summer for the travel (especially airline) industry, activity has picked back up again. And, despite continued economic headwinds, the percentage of Americans who say they plan to hit the road (or skies) for the upcoming holiday season looks to be on par with last year. Notably, however, a super-majority of those intended travelers are procrastinating in booking their trips – meaning the prize remains high for travel booking sites, airlines, hotels, and Airbnb, looking to win these voyagers. If you’re in the travel or hospitality industry, we provide a helpful roadmap on who these travelers are and where to find them.
Influencers are at their most effective when they’re not overtly selling. The growing power of social media influencers – among young and old – shows no signs of slowing. In this week’s 3 Things to Know, we took a closer look at why people turn to influencers. Entertainment and humor top the list, followed by desires to learn new skills or tips. Product recommendations are far down the list – it’s best when that happens organically. We also explored how definitions of “luxury” vary widely among different age groups and how women are mostly driving the Buy Now, Pay Later craze.
The resiliency of the prestige beauty category continues to defy conventional wisdom. A trend that, after almost five years, should officially qualify as “secular”, consumers are prioritizing prestige cosmetics, skin care, and fragrance products against all economic odds. When asked where they are cutting back due to rising prices, consumers are least likely to cite higher (but not highest) end brands like Ulta and Sephora, over value brands, or even luxury ones. While seemingly the most protected from attrition, these mid-to-upper market players may also benefit from more affluent luxury buyers trading down. Check out the full study to learn everything you need to know about today’s prestige beauty shopper.
Expiring tax credits may not hit the EV market as badly as people think. Automakers left and right reported stellar EV sales in Q3, with Ford and GM eating further away at Tesla’s share in the category, even as the latter reported its first YoY growth quarter of 2025. The end of a $7,500 federal tax credit on September 30, surely boosted Q3 activity as buyers looked to beat the clock. Still, our latest data on potential new EV buyers suggests the healthy growth could continue in the coming year. Sixty-five percent of U.S. adults considering an EV for their next purchase (or lease) expect to do so in the next 12 months – lapsing tax credits be damned. These likely buyers are huge product researchers and fitness enthusiasts.
More awesomeness from the InsightStore™
- We kicked off the latest season of our Dumbest Guy in the Room (that’s me) podcast this week, with a long-awaited (4+ years) return of the great Mark Cuban. While our pandemic-era episode focused on sports and sports media, this one centered on Mark’s efforts to disrupt the prescription drug market, the virtues of transparency in business, and why eggs are better when dipped in ketchup. Also, there’s quite a bit of swearing. Catch it on YouTube or your favorite podcast platform;
- Nostalgia is a powerful force in restaurant spending – here’s who it impacts the most.
The most popular questions this week:
Do you decorate your home for Halloween?
How open are you to the idea of living in another country?
Do you consider autumn to be “soup season”?
Have you ever personally met someone who has truly inspired you?
Do you ever put ice in your beer?
Answer Key: Much less this year with the kids gone; Support; I would love it – it’s just never been practical; Totally; More than I can count; Only when I pour a beer in an empty bloody mary to make a poor man’s michelada.
Hoping you’re well.
JD
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