American shoppers are experiencing promotional fatigue that threatens to reshape the upcoming holiday shopping season, according to new research from consulting firm AlixPartners. The comprehensive survey of over 9,000 consumers across 140 retailers reveals a fundamental shift in purchasing behavior that could challenge traditional retail strategies.
The study found that discount importance has declined significantly, with price dropping 13% in consumer priority rankings compared to the previous year. This trend spans nearly all retail sectors except luxury goods and beauty, suggesting a broad transformation in shopping psychology.
Perhaps more striking, 30% fewer consumers now rank sales and finding the best deal as very important factors in their purchasing decisions. Even in the off price retail sector, where bargain hunting traditionally drives customer behavior, deal seeking fell from the top consideration to number 19 on the priority list.
Quality and experience gain prominence
The research indicates consumers have become desensitized to the retail industry’s constant stream of promotions, leading them to seek value beyond simple price reductions. Shoppers increasingly prioritize consistent pricing between physical stores and online channels, overall value for money, and product quality when making purchasing decisions.
Store experience has emerged as another critical factor, though retailers appear to struggle with execution. While more than 60% of surveyed shoppers plan to make over half their fashion purchases in physical stores during the holiday season, average shopping time decreased 3% and basket sizes fell 5% over the past two years.
This creates a puzzling dynamic where foot traffic increases but conversion rates decline. The disconnect suggests that despite drawing customers into stores, retailers fail to provide compelling experiences that translate visits into sales.
Sonia Lapinsky, who leads AlixPartners’ global fashion practice and authored the report, characterized the findings as a warning for retailers who have relied heavily on promotional strategies to drive traffic and sales.
Tariff impact compounds promotional challenges
The timing of this consumer shift creates particular challenges for retailers navigating recent trade policy changes. Following significant tariff increases implemented in April, many retailers initially leaned on discount strategies and promotions to address consumer concerns about rising prices driven by trade policies.
However, this approach appears to have accelerated promotional fatigue rather than solving underlying pricing pressures. Retailers now find themselves in a difficult position where their traditional promotional tools have diminished effectiveness precisely when they face increased cost pressures from tariffs.
The situation becomes more complex as many retailers raise prices to offset tariff costs while simultaneously discovering that discount strategies no longer provide reliable traffic and sales boosts. This combination threatens to make promotional activities both more expensive and less effective.
Luxury sector provides cautionary example
The luxury retail segment offers a telling preview of what happens when price increases outpace consumer acceptance. Luxury brands dramatically raised prices over recent years, with some items experiencing extreme increases that tested consumer tolerance.
The report cited specific examples of this pricing strategy, noting how certain luxury handbags saw prices more than double between 2019 and 2025. These aggressive price increases eventually triggered consumer resistance, leading shoppers to migrate toward premium brands that felt more rationally priced.
This dynamic created a cautionary tale that extends beyond luxury retail. The research suggests that retailers across all segments who attempt to maintain pricing by reducing quality risk losing credibility with increasingly discerning consumers.
Holiday season outlook remains uncertain
The findings emerge as the retail industry prepares for a holiday shopping season that analysts expect could prove weaker than previous years. Multiple economic headwinds including declining consumer sentiment, job market uncertainty, and persistent inflation create a challenging backdrop for retailers.
This economic environment places renewed emphasis on execution, quality, and brand strength rather than relying primarily on promotional strategies. Retailers must navigate the delicate balance of managing increased costs while meeting consumer expectations for value and quality.
The research suggests that successful holiday strategies will require retailers to move beyond simple discount approaches and focus on creating compelling value propositions through improved experiences, consistent pricing, and product quality. Companies that continue to rely primarily on promotional tactics may find themselves struggling to connect with increasingly sophisticated consumers who have grown weary of constant sales messaging.