Gen Z: Reshaping Holiday Strategy.
Transform Economic Pressure into Emotional Connection to Capture Future Spending Power.
Holiday 2025 arrives under the most negative consumer outlook since Deloitte began tracking economic sentiment in 1997. Fifty-seven percent of consumers expect economic weakness over the next six months, with spending forecast to decline 10% compared to 2024. Gen Z leads the retreat at 34% spending reduction, yet simultaneously represents future category dominance with projected spending power reaching $12 trillion by 2030. This paradox demands strategic precision: brands must capture loyalty during constraint to secure position during expansion.
Lupine Skelly, Deloitte retail research leader, frames the opportunity: Gen Z feels economic pressures at higher rates, creating urgency for marketers to deploy social media campaigns and value messaging that tempts purchase despite budget consciousness. The challenge lies not in abandoning Gen Z during spending decline, but in understanding how value definition itself transforms under economic stress.
Emotional Value Replaces Fantastical Aspiration
Brands replace glitz and glam with emotional authenticity. Hannah Lewman, Ogilvy strategy director, observes that creative work reflects consumer budget consciousness and discernment: brands emphasize connection value, shared experiences, and attainable human moments over fantastical dream holidays. Gap's "Give Your Gift" campaign features a 90-second emotional cover of Miley Cyrus's "The Climb," spotlighting hope, connection, and individuality. The spot, developed by Gap's internal creative team with Invisible Dynamics, demonstrates how emotional resonance communicates value without fantasy excess.
Affordability messaging dominates, Walmart promotes budget hosting options, JCPenney reveals weekly deals during Amazon Prime Video's Thursday Night Football through its "Really Big Deals" program. Yet Daryl Giannantonio, VML chief strategy officer, warns that price-focused messaging risks condescending audiences. Messaging exploring value brought to consumer lives or households outperforms pure affordability plays. People want positive family experiences and good memories, not reminders of financial constraint.
Sam's Club's "Yes And" campaign starring Chris Pratt runs October through December, highlighting convenience and member perks, extended hours, no minimum fees on curbside pickup or express delivery, that communicate value beyond price. CMO Chris Curtin emphasizes meeting consumers where they are across multiple holiday occasions, not just accelerating December into October. The campaign spans digital, social, and linear TV during live sports, college football and NFL games, recognizing that sports broadcasts remain appointment television optimal for reaching diverse audiences with minimal platform interruption.
Gen Z Demands Personalized Experience Across Channels
Ninety-five percent of Gen Z seeks deals this season, per Deloitte, yet brands building loyalty emphasize personalized experiences across digital, social, and in-person channels rather than pure discounting. Urban Outfitters leveraged insights from its UO Insiders community of over 10,000 Gen Z shoppers, discovering that 54% use wish lists to present gifting ideas and prioritize celebrating with new traditions emphasizing community. Head of Brand Marketing Cyntia Leo explains the brand responds by asking what customers need and how to best serve them in the moment rather than pursuing flash and pizzazz without strategic purpose.
Urban Outfitters partnered with Canva to create three wishlist design templates with free branded elements including over 100 products easily added to templates, keying into the specific Gen Z insight. The brand also hosted creator- and celebrity-led events in Los Angeles and New York featuring R&B singer Khalid and cast members from Bravo's "Next Gen NYC," providing talent-driven experiences while showcasing holiday products. Keying in on specific Gen Z insights demonstrates brands hear shoppers, building trust through acknowledgment rather than assumption.
In-Store Experience Matters for Digital Natives
Despite digital nativity, Gen Z demonstrates strong in-store preference. Almost three-quarters shop in-person at least weekly, with the majority considering it an experience, according to Adyen research. Comparatively, just over one-third of baby boomers view in-person shopping as experiential. Deloitte's Skelly predicts Gen Z will dictate Black Friday dynamics, especially in-store, with younger generations and higher-income consumers spending most during Black Friday and Cyber Monday.
True Religion CMO Kristen D'Arcy targets the 18-to-25 audience through college campus tours, increased TikTok and Snapchat focus, and a Von Dutch collaboration for limited-edition holiday collection fronted by "Love Island" stars. With over 10 million people in databases and nearly $500 million in 2025 sales, D'Arcy expresses confidence that adding younger customers to databases will reach the billion-dollar brand mark quickly. The brand's "Wrapped in True" campaign celebrates multihyphenate women including Grammy winner Ciara, reflecting ongoing sports focus as fashion and athletics increasingly intertwine.
Social Media and Influencers Drive Discovery
Seventy-four percent of Gen Z leverages social media and influencers for inspiration and product discovery, per Deloitte, with social media users spending approximately 25% more on holiday goods than non-users. Target's return of fictional store team member Kris K., dubbed "Hot Santa" by consumers, generated over 70 million TikTok views under #TargetSanta. Lewman identifies this as prime example of brands leaning into and amplifying social conversation rather than forcing unnatural narratives.
Brands including Lowe's, Chewy, and Best Buy increase creator emphasis through storefronts allowing dedicated online pages displaying creator content with native shopping experiences. Best Buy doubled storefront availability since April launch, partnering with over 200 influencers for 2025 holiday campaigns. Additional partnerships with YouTube's "Hot Ones" and content creator Binging With Babish provide utility layers serving as differentiation points beyond product alone.
Retail Media and AI Acceptance Grows
Sixty-one percent of Gen Z consumers don't mind seeing sponsored ads for relevant brands or products, increasing from 50% in 2024, according to Bain & Company data. Stephen Mewborn, Bain's global solutions lead for retail media and data monetization, suspects younger consumers grew up with ubiquitous sponsored content, making it less off-putting. Retail media ranks as top-five holiday brand investment and third-fastest growing holiday tactic by expected investment increase behind e-commerce and marketing and media. Ad buyers intend to invest nearly 12% more on holiday retail media this year, with global retail media spending expected to top $300 billion by 2030 per Forrester.
Retail media investments offer marketers opportunities to reach younger audiences establishing brand preferences while simultaneously reaching broader audiences. Mewborn explains that Walmart.com audiences span ages 18 through 80, few media properties deliver that range. Forty-three percent of Gen Z turns to AI for product inspiration and price finding, per Deloitte, compared to 33% of shoppers broadly planning AI use in purchasing journeys, more than doubling over 2024. Brands could embed AI tools into sites removing friction from shopping experiences, like finding gifts for various age groups.
Brands explore generative AI roles in advertising creative. Coke released an updated AI-developed version of "Holidays Are Coming," originally launched last year. Google debuted its first fully AI-generated ad featuring a turkey using AI search to escape Thanksgiving. Whether consumers embrace AI-generated ads remains debatable, Coke's efforts continue facing backlash despite company claims that ads surpass Christmas campaign benchmarks. Lewman notes growing public AI awareness in creative raises the creative bar significantly, demanding brand-aligned, high-quality, likable execution—the principles making good ads generally.
Recommendations
Move beyond price-only affordability messaging to explore value brought to consumer lives and households without condescending to budget-conscious audiences.
Leverage social listening communities to identify specific Gen Z insights, like wishlist preferences—then respond with partnerships addressing actual needs rather than assumed desires.
Invest in in-store experiential moments recognizing that digital-native Gen Z views physical retail as experience rather than transaction.
Amplify organic social conversation rather than forcing branded narratives, monitor what consumers create and lean into authentic enthusiasm.
Embed AI tools into owned properties to remove shopping friction while maintaining creative quality standards that avoid consumer backlash.
Bottom Line: Experience Value Trumps Transaction Price for Future Loyalty.
Gen Z cuts holiday spending 34% while simultaneously craving personalized experiences, community connection, and in-store moments that transcend pure transaction. Brands that communicate emotional value through authentic connection rather than fantastical aspiration position themselves to capture loyalty during constraint that converts to spending during expansion.
The bubble consumers want to create during holidays demands brands become part of the moment rather than bursting it with tone-deaf messaging about economic reality they already understand.
