Holiday retail in the United States did not just grow 4.2% this season – it also revealed how AI, omnichannel shopping, and “mission-driven” consumers are reshaping spend across fashion, electronics, and home categories. For retailers, the latest Visa Consulting & Analytics data offers a playbook for where shoppers are splurging, where they are cutting back, and how to plan 2026 assortments and promotions.
How Visa measured the holiday season
The VCA Retail Spend Monitor tracked retail activity over a seven-week window starting November 1, 2025, using a subset of U.S. Visa payment network data plus survey-based estimates for cash and other tenders. The analysis focuses on core retail and excludes categories like autos, gasoline, and restaurants to better isolate true holiday shopping behavior.
Preliminary results show total U.S. holiday retail spending up 4.2% year over year across all payment types, unadjusted for inflation, confirming that shoppers continued to spend despite economic headwinds. For brands, this means volume held up, but margin strategy still matters once higher costs and promotions are factored in.
Store vs. screen: omnichannel realities
In-store shopping remained the anchor of the season, with physical locations capturing 73% of holiday payment volume compared to 27% online. That mix reinforces the importance of experiential flagships, local inventory depth, and fast checkout for retailers that still count on store traffic to hit December targets.
Digital, however, was the growth engine: online retail sales climbed 7.8%, reflecting the total value of e-commerce purchases across retail categories. Early-season deals and convenience kept consumers buying online even as they returned to malls and shopping centers, highlighting the need for seamless click-and-collect and easy returns.
Category shifts: fashion and tech win, home cools
Across categories, electronics and fashion led the charge, while home improvement lagged. These shifts give merchandising teams clear signals on where to lean in for 2026.
- Electronics: Sales jumped 5.8%, as consumers upgraded to high-performance devices designed for the AI era, from laptops to smart home gear. These purchases suggest that tech is now viewed as an everyday essential rather than a luxury, even in a cautious macro backdrop.
- Clothing and accessories: Fashion posted a 5.3% gain, showing shoppers still made room for apparel, footwear, and accessories for parties, travel, and back-to-office dressing. For brands, this points to ongoing demand for “occasion plus everyday” wardrobes rather than pure loungewear or basics.
- General merchandise: One-stop retailers saw sales increase 3.7%, as time-pressed shoppers consolidated trips for gifts, décor, and household items. Strong performance here signals that value, assortment breadth, and convenience remain powerful holiday drivers.
- Furniture and home: Furniture and home furnishings rose a modest 0.8%, reflecting steady but not explosive demand for big-ticket home items. Many households appear to have prioritized gifts and personal tech over large décor refreshes.
- Home improvement: Building materials and garden equipment sales fell 1.0%, making it one of the few declining segments. That softness indicates a pause in discretionary DIY projects as budgets shifted toward more immediate, “giftable” categories.
The AI-enabled, intentional consumer
Wayne Best, chief economist at Visa, said, “Whether shoppers were upgrading their tech, refreshing their closets, or stocking up at one‑stop shops, retailers delivered seamless shopping experiences both in stores and online…This season also marked a turning point, with artificial intelligence shaping how people discover products, compare prices, and interact with offers. This led to a more informed, more intentional consumer, ensuring they could stretch their discretionary spending.”
Kate Manfred, North America head of advisory services at Visa, said, “Insights from the VCA Retail Spend Monitor help businesses adapt to changing consumer behaviors and prepare for the rapidly evolving future of commerce.” For decision-makers, the combination of transaction data and analytics translates into clearer calls on store formats, digital investments, and promotion calendars.
What this means for fashion and retail in 2026
The pattern of 4.2% overall growth with outperformance in electronics and fashion suggests that consumers are still willing to invest in self-expression and functionality, even as they trim categories like home improvement. Retailers that win are likely to be those that pair sharp value with discovery – using AI-powered recommendations, curated assortments, and flexible fulfillment to meet shoppers wherever they are.
For brands planning 2026, this data argues for: tighter SKU counts in slower home categories, bolder innovation in AI-ready devices and fashion capsules, and a renewed focus on omnichannel experiences that respect the 73% in-store share while nurturing the 7.8% online growth. The consumer is cautious but clearly still spending – just with sharper priorities and higher expectations.
