What to Expect and What to Wish for from Retailers this Holiday Season

Last holiday season would have marked a certain “post-pandemic” normalcy, but extreme excess inventory and inflation significantly impeded any anticipated recalibration. This holiday season, though prices are still high and purse strings remain tightened, there’s slightly more stability inherent in the current retail environment that will bring more clarity to the numbers. Retailers will leverage this moment to focus on operational efficiencies and consumer connection.

AI Investment

Generative AI and AI will help drive efficiencies for mission-driven consumers and overworked employees. While this is hardly a prediction at this point since generative AI has been all the rage, I wouldn’t be doing my job if I didn’t mention it as a core part of retail holiday strategies this season.

The most impactful ways generative AI will show up are likely:

  • Advancing search functions far beyond what we’ve experienced in the past;
  • Optimizing efficiencies for store associates;
  • Supporting the most strategic discount approaches; and
  • Devising the most compelling product descriptions.

Expect to be able to drop in extremely specific, detailed product queries, and to find far more suitable options when searching. Eventually, it would be ideal if shoppers could opt in to prior searches conducted by friends or family members helping look for the same item, to save even more time and to foster fewer redundant conversations among shoppers on the same mission when searching.


With respect to optimizing employee efficiencies, generative AI could be used by store associates on handheld devices to think up product recommendations when advising customers, and AI will hopefully be deployed in order to achieve the most ideal sales floor schedules.

Heightened Demand and Discounts

Heightened demand for in-store shopping, overall minimal sales growth and right-sized discounts will occur. Last year, it was challenging to determine the impact of inflation on holiday sales growth and the impact it had on demand levels. This year, with inventory in a better spot, we can expect discounts to happen on new items versus outdated, unwanted items, which will help drive demand.

Additionally, consumers have had time to adjust to higher prices, so I’m expecting somewhat of a bounce back in desire to spend. That said, consumers are still feeling the pinch of the economic environment, which will be reflected in modest overall sales growth from last year. Since we saw store visits rise back up last year though, I’d expect even higher foot traffic, comparatively, this year.

Lastly, finely tuned demand forecasting and management tools will be especially useful, and better than ever thanks to retailers fully leaning into AI, during such a uniquely conservative season — one where consumers are watching their pocketbooks while also still being open to gifting.

Tailored Customer Experiences

Online, retailers would be wise to go beyond the typical “for Mom/brother/sister/partner” edits by implementing recommendation mechanisms specific to whom the shopper says they’re buying for. Additionally, given recent personalization research I conducted that revealed the importance of brands knowing consumers’ ideal prices, smart recommendations for different desired spends would resonate well. If consumers could build separate gifting lists and receive multiple-people recommendations at once, while specifying for whom they’re meant, one-stop shopping could occur digitally within the same retailer. In stores, technology that fosters faster checkout and browsing/store navigation for shoppers would serve well to be rolled out just in time for the holidays.

Increased Loyalty Perks

Over the last several months, several prominent retailers have reevaluated their loyalty programs and strategies. While a surprising number of those retailers are pulling back on their loyalty offerings, the smart ones will up their perks around the holiday season in order to entice new customers while mitigating the chaos of the season.

Establishing alternate, extra, quieter store hours as a perk, creating exclusive livestreams for members to snag limited edition products, “skip the line” benefits and building in members-only opportunities to customize purchases are just a few of the ways retailers could boost the loyalty experience around the holidays. Retailers could also augment the gifting experience for loyalty customers, driving desire on behalf of the recipient to become a loyalty member of the retailer as well.

The shift in retail hot topics from the metaverse to AI characterizes the recent attitudinal shift in retail strategy. As the year comes to a close, the best investments made are the ones that further optimize infrastructure, while also enhancing the experience for shoppers. Shopping should be rewardingly seamless for everyone involved.

Melissa Minkow is Director of Retail Strategy at CI&T and a retail futurist whose methodology is rooted in cross-industry consumer insights and innovation. At CI&T, she is responsible for synthesizing strategy, insights and data to help identify actionable retail services trends and lead strategic sales and client engagements. Previously, Minkow was a Senior Principal Advisor focusing on omnichannel retail, ecommerce and social commerce at global research and advisory company Gartner and was a business analyst in merchandising strategy at Target.

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