Holiday Shopping 2025 – Bridget™ AI Insights into E-commerce and Retail

Tomorrow is Black Friday, the official kickoff of the holiday shopping season, and consumers across the US and other global markets are set to take advantage of sales and deals across the e-commerce and retail landscapes.

The holiday shopping season doesn’t exist in isolation; it is greatly impacted by broader economic trends. This year, analysts are projecting that Black Friday sales might fall for the first time in several years due to rising costs and other factors.

Of course, Black Friday is only one day, and the holiday shopping season will extend all the way to the end of December as some shoppers finish up with last-minute gift purchases.

To gain a better understanding of the factors impacting market behavior, and specifically to understand how the holiday shopping season will affect the capital markets, we turned to our own resident expert: Bridget™ – our AI chat for investment intelligence.

*Note: Responses from Bridget below have been edited for length. Also see our important disclaimer about these insights at the end of this post.

Asking Bridget™ About Holiday Shopping Stocks

We wanted to get started by understanding the broad outlook for this holiday season.

Question:

What is the outlook for e-commerce stocks this holiday shopping season?

Bridget™:

E-commerce stocks are heading into the 2025 holiday shopping season with solid momentum, even as overall retail growth is expected to be a bit slower than last year. E-commerce sales are projected to rise by 7% to 9%, reaching between 305 billion USD and 310.7 billion USD from November to January. Mastercard Economics Institute expects e-commerce growth of 7.9% year-over-year, outpacing brick-and-mortar sales (2.3%). Adobe forecasts a record 253.4 billion USD in online spending between November 1 and December 31, marking a 5.3% increase from last year. The National Retail Federation anticipates total holiday retail sales will surpass 1 trillion USD for the first time.

Key drivers for e-commerce stocks this season include a surge in mobile shopping, with mobile revenue share expected to hit 56.1% of online sales. AI integration is ramping up, helping retailers offer better product recommendations and deals, while Buy Now, Pay Later options are set to facilitate 20.2 billion USD in online purchases. Shoppers are also turning to resale markets, starting their holiday shopping earlier, and prioritizing value with higher average discount rates. Gift card usage is expected to rise as consumers seek flexibility amid higher prices. All these trends point to a favorable environment for e-commerce companies, especially those leveraging mobile, AI, and flexible payment options to capture holiday demand.

Would you like to take a look at the specific companies that fall under the ‘E-commerce Giants’ theme and their individual BridgeWise recommendations?

Notice the option Bridget™ provided to explore an investment theme directly tied to e-commerce. We’ll circle back to that later.

Now, let’s ask a follow-up question to understand the differences between e-commerce and retail outlooks.

Q:

What is the outlook for retail stocks this holiday shopping season?

Bridget™:

Retail stocks are heading into the 2025 holiday shopping season with moderate growth expectations, shaped by a mix of cautious consumer sentiment and strategic industry responses. Holiday sales are projected to rise between 2.9% and 4% over 2024, with forecasts from S&P Global Ratings, Deloitte, Bain, and EMARKETER all pointing to slower gains compared to the 10-year average. E-commerce remains a bright spot, expected to grow 7% to 9%, and mobile commerce is set to account for over half of online sales. However, overall consumer spending is likely to decrease by 5%, as 84% of shoppers plan to cut back amid higher prices, new tariffs, and increased living costs.

Retailers are bracing for a season where price increases—rather than unit volume—will drive most of the sales growth, and promotional strategies are expected to be mixed. Inventory management will be more disciplined, reflecting uncertainty around tariffs and the macroeconomic outlook. Generational trends show Gen Z cutting back the most, while other age groups are maintaining or slightly increasing their spending. The overall picture is one of cautious optimism, with growth driven mainly by pricing strategies and digital channels, but tempered by weaker consumer confidence and a challenging economic environment.

Ok, let’s turn back to the E-commerce Giants theme Bridget™ offered to explore earlier. Thanks to ThemeWise, Bridget™ can help investors discover opportunities based on common themes such as e-commerce, travel, AI, and others.

In the response from Bridget™ below, note that not all of the stocks in the theme are directly connected to the holiday shopping season, but they are nevertheless all major players in the wider e-commerce space.

Q:

Tell me more about the companies in the ‘E-commerce Giants’ theme.

Bridget™:

Based on BridgeWise analysis, the following companies in the Consumer Discretionary Distribution & Retail industry are suggested:

• The TJX Companies, Inc. [NYSE:TJX] is an off-price apparel and home fashions retailer, showing strong momentum with top-tier Book Value Per Share and Total Common Equity versus peers. BridgeWise rates it Buy, citing operational outperformance and robust financials; its last close was 151.43 USD with a market cap of 168.53B USD.

• Newegg Commerce, Inc. [NasdaqCM:NEGG] is a leading electronics-focused e-retailer, excelling in Net Capital Expenditure and Net Change in Cash, earning a BridgeWise Buy for its financial strength and growth potential; its last close was 70.73 USD and market cap 1.45B USD.

• Kohl’s Corporation [NYSE:KSS] is an omnichannel retailer, standing out with strong Period P/B Ratio and Current Ratio, which historically correlate with outperformance; BridgeWise rates it Buy, with a last close of 15.71 USD and market cap 1.76B USD.

• Urban Outfitters, Inc. [NasdaqGS:URBN] offers lifestyle products and services, driven by standout Net Change in Cash and Cash & Cash Equivalents; BridgeWise recommends Buy, with a last close of 64.11 USD and market cap 5.75B USD.

Each of these companies is recognized for strong financials and momentum, making them notable picks in the current retail and e-commerce landscape.

Bridget™ also looks at broader economic and business trends and includes them in the provided analysis. In earlier responses, Bridget™ mentioned Buy Now, Pay Later solutions as a major factor in consumer behavior this holiday season. Let’s explore that further.

Q:

How will Buy Now, Pay Later options impact stocks this holiday shopping season?

Bridget™:

Buy Now, Pay Later (BNPL) options are set to boost both retail and fintech stocks during the 2025 holiday shopping season. With half of U.S. holiday shoppers planning to use BNPL, and 52% saying they’re more likely to make a purchase if it’s available, retailers—especially e-commerce giants like Amazon and Walmart—could see increased sales volumes. BNPL transactions are projected to add about 2 billion USD to online holiday spending, driving growth for companies with strong digital and omnichannel strategies. Key BNPL providers, such as Affirm, Afterpay (owned by Block Inc.), and Sezzle, are positioned to benefit from this surge, as seen in Affirm’s 46% year-over-year revenue increase in 2024.

However, the widespread use of BNPL also brings potential risks that could affect consumer finance and, indirectly, stock performance. A significant number of BNPL users report financial strain, missed payments, and late fees, which could lead to higher consumer debt and impact credit scores. While BNPL is fueling retail sales and supporting stock momentum for both retailers and payment platforms, these risks may introduce volatility if consumer debt issues become more pronounced during or after the holiday season.

From these responses, we see how Bridget™ can help investors gain a clear picture of the important trends impacting the market this holiday season, as well as receive several concrete recommendations for potential investments.

If you’d like to explore the ways Bridget™ and AI-driven analysis can support your investors and their decision-making process, sign up for a demo today.

Disclaimer: The information concluded in this analysis is intended for general guidance purposes only. Under no circumstances is the information adjusted to a specific factor or variable related to the identity of the reader. The information is not a substitute for specific advice that takes into consideration the specific data and special needs of each reader, and in any case, it is recommended to consult with professionals and tax advisors in these contexts.