Quick Facts

• Total holiday retail sales grew 4.1% in November and December 2025, surpassing $1 trillion for the first time in history.
• Cyber Monday 2025 generated a record $14.25 billion in online sales, equal to $16 million spent every minute.
• Generative AI traffic surged 1,200% year over year and converted 16% more often than traditional sources.

The 2025 holiday season crossed a threshold no U.S. retail season had reached before. Total retail sales from November through December grew 4.1%, landing between $1.01 trillion and $1.02 trillion, according to the National Retail Federation. That result matched the upper end of the NRF’s forecast range of 3.7% to 4.2% growth over 2024’s $976.1 billion.

Full-year December data pushed total 2025 sales to a 4.93% increase over 2024, with core sales up 5.08%.

E-Commerce Leads the Way

Online sales outpaced brick-and-mortar by a wide margin. E-commerce grew 9% year over year while in-store retail rose 2.5%, according to Bain and Company. Black Friday generated $11.8 billion in online spending, up 9.1% from the prior year. Cyber Monday followed with $14.25 billion, making it the second-largest online sales day in U.S. history.

An estimated 202.9 million consumers shopped during the five-day Thanksgiving through Cyber Monday stretch, the largest turnout since the NRF began tracking the period in 2017. That surpassed last year’s 197 million shoppers.

BNPL Hits $20 Billion

Buy Now, Pay Later reached a record $20 billion for the full season, according to Adobe. On Cyber Monday alone, U.S. shoppers spent $1.03 billion through BNPL, a 4.2% increase over the prior year. Mobile drove 79.4% of those transactions.

Bankrate Senior Analyst Ted Rossman described a split consumer base. “It’s very much a two-track economy, as we know, and credit cards are a great example of that,” he said. Kevin Klowden of the Milken Institute noted that inflationary pressure has accumulated more heavily on lower- and middle-income households, while upper-income consumers drove spending growth.

AI Becomes a Shopping Channel

Generative AI tools emerged as a meaningful traffic and conversion source. Traffic from AI platforms surged 1,200% year over year and converted at a rate 16% higher than traditional sources. About 24% of consumers said they planned to start their holiday shopping using AI tools such as Google Gemini, ChatGPT, or Claude, up from 17% the prior year.

Social commerce also gained ground. Online revenue from social traffic rose 28% year over year. Alex Sherman, CEO of Bluefish, said the season “cemented AI as the new front door to product discovery.”

Tariffs and the K-Shaped Economy

Despite the record numbers, headwinds were present. Tariffs on goods from China added pressure on fashion, luxury, and consumer durables. Retailers absorbed some of that impact through compressed margins and inventory built up ahead of the duties. Bain noted that inflation accounted for more than half of the nominal sales increase.

NRF President and CEO Matthew Shay pointed to three factors supporting the consumer: wage growth outpacing inflation, historically low unemployment, and wealth effects from strong stock market performance. “The economy has continued to show surprising resilience in a year marked by trade uncertainty and persistent inflation,” said NRF Chief Economist Mark Mathews.

What It Means for Operators

The season’s results carry direct implications for DTC brands and retailers. AI-driven discovery is no longer experimental. Brands that lack a presence on generative AI platforms are already missing qualified traffic. BNPL adoption signals continued demand for payment flexibility, particularly among shoppers under financial pressure.

Holiday hiring fell to between 265,000 and 365,000 workers, down from 442,000 in 2024, suggesting retailers are doing more with leaner seasonal workforces. Per-person spending averaged $890.49, the second highest in the NRF survey’s 23-year history, with $627.93 allocated to gifts alone.

Read more: Holiday spending forecast to top $1 trillion