Retail Closes the Holiday Season Leaner and More Focused

Across PYMNTS’ retail coverage this year, two narratives ran in parallel. The first came through executive interviews in “The SKU®: The Inside Track on Retail’s Reality,” where leaders described how they are rebuilding shopping journeys around first-party data, artificial intelligence and loyalty while trying to keep the experience human. The second came through PYMNTS Intelligence, where the numbers mapped a market in which the largest players — especially Amazon and Walmart — continued their tug-of-war for retail spend, even as the overall wallet faced competing demands from housing, healthcare and services.

The SKU’s Lessons

If 2025 had a recurring executive message, it was that technology matters most when the customer barely notices it.

At CVS, the conversation centered on the asset retailers can monetize without opening a new store: the customer relationship itself. CVS’ retail media business is framed around connecting loyalty and transaction signals to ad targeting and measurement. In The SKU interview, CVS Media Exchange’s Parbinder Dhariwal described the retailer’s edge plainly: “They have information through transactional data or loyalty data. … They also have actual purchase behavior data.” The point is not that consumers wake up wanting “retail media,” but that banks, brands and merchants are increasingly transacting inside ecosystems where ads, offers and checkout live on the same data rails.

Ulta Beauty approached the same problem from the other side: discovery. Beauty trends can surface and fade in weeks, and the retailer’s task is to make discovery, evaluation and replenishment feel like one continuous experience. In its The SKU conversation, Ulta’s Josh Friedman pushed back on channel talk altogether, saying: “For the customer, there is no distinguishing.” That posture — treating “omnichannel” as an internal operating problem, not a consumer-facing feature — showed up repeatedly this year, especially as more shopping journeys began on mobile and finished in store, or vice versa.

For Furniture.com, the friction was not trend velocity but decision fatigue. Furniture remains one of the most complex eCommerce categories — high consideration, inconsistent product data and a persistent need to see and touch. Furniture.com’s Dan Bennett argued that the industry has simply asked too much of shoppers for too long. “Most furniture shoppers right now spend north of 15 hours on each search. That’s ridiculous.”

His broader point was about data normalization as an enabler of trust: If products are labeled inconsistently across merchants, the shopper’s “compare” work becomes a reliability problem, not just a convenience problem. Furniture.com says it ingests feeds from dozens of partners and normalizes them into a single catalog, with the goal of compressing research time while still steering shoppers to local showrooms for big-ticket confidence.

Whatnot, meanwhile, offered the year’s clearest example of retail as entertainment — without pretending that the entertainment replaces commerce fundamentals. PYMNTS’ coverage of the platform described a business generating $6 billion in annual sales and attracting users who spend an average of 80 minutes a day on the app.

In The SKU context, Whatnot’s Armand Wilson described early momentum as a function of obsessive customer proximity: “The earliest days [were about] … just staying really close to our community and trying to solve needs for them.” The underlying implication for payments professionals is that “checkout” is no longer a discrete moment. It is embedded in a social environment where trust, identity and risk controls have to operate in real time — often invisibly — because any friction breaks the spell.

Even in apparel, where “brand” is often treated as an intangible, the 2025 interviews reinforced the same discipline. TOMS, a label with deep cultural recognition, described its strategy as a modern reintroduction built around digital-first discovery while still respecting how consumers prefer to buy footwear. CEO Jessica Alsing put the consumer behavior shift in everyday terms: “Consumers really focus digitally … anyone from 8 to 80 often start a purchase on their phone.”

Across categories, The SKU takeaway was consistent: AI is not the story retailers want customers to hear. It is the infrastructure retailers want customers to feel through better search, faster onboarding of brands, smarter replenishment and more relevant offers.

Walmart vs Amazon: Share of Wallet

If The SKU conversations explained how retailers are retooling, PYMNTS Intelligence quantified where the consumer dollar is concentrating.

The “Share of Wallet” series’ Q3 2025 installment estimated that Amazon and Walmart together generated $1.3 trillion in retail sales over the prior 12 months — about 17% of total U.S. retail spending. Amazon’s estimated U.S. retail sales were $173 billion in Q3, versus Walmart’s $144 billion, putting Amazon at 9.1% of total U.S. retail sales compared to Walmart’s 7.6%, per PYMNTS Intelligence estimates derived from company earnings and U.S. government data.

The headline hides a structural distinction that matters for retail strategy and for the payments stack that supports it: Walmart’s scale is increasingly concentrated in food. PYMNTS Intelligence estimated Walmart captured 20% of U.S. food and beverage spending in Q3, while noting that Walmart’s share in several other categories has declined since 2019. Amazon’s portfolio, by contrast, is more weighted to categories that swing around promotional events and holiday periods.

Earlier in the year, the competitive picture looked less like “winner takes more” and more like “retail hits a ceiling.” A May PYMNTS report noted that, in Q1 2025, both Amazon and Walmart posted their weakest quarterly sales growth since before the pandemic, as spending shifted toward services, housing and healthcare. The same report pegged Amazon at 8.6% of U.S. retail spending in Q1, with Walmart at 7.7%, while also observing that both companies’ share of total consumer spending declined year over year — a reminder that retail competes with non-retail bills for wallet priority.

By midyear, however, the Q2 2025 Share of Wallet installment showed Amazon re-accelerating in eCommerce: PYMNTS Intelligence estimated Amazon’s U.S. retail sales rose 9.5% year over year in Q2 (with eCommerce up 9.6%), compared to Walmart’s 4.6% growth. For banks and payments providers, these shifts matter because share-of-wallet concentration is also share-of-data concentration: The platforms that win spend also win the behavioral signals that power targeted offers, private-label payment options, and new forms of embedded credit.

Black Friday 2025

Black Friday provided the year’s clearest snapshot of the consumer’s posture: still willing to spend but determined to control the terms.

PYMNTS Intelligence found that 151 million shoppers made at least one purchase on Black Friday — 7% fewer than the prior year — and the number of in-store shoppers fell 11%. Yet the day did not “go quiet.” Online shoppers increased 7%, and 77% of consumers shopped digitally via phone or computer.

The spending pattern was equally telling. The average consumer spent $295 (about $9 more than last year) but bought fewer items, signaling that shoppers trimmed lists without abandoning budgets. And, in a sign of how quickly AI has moved from novelty to utility, PYMNTS Intelligence reported that half of all shoppers — including 2 in 3 Gen Z consumers — used conversational AI tools to help complete purchases.

Payments behavior was the connective tissue. Among consumers living paycheck to paycheck with difficulty paying bills, PYMNTS Intelligence found nearly 60% used credit cards to pay in fixed installments. Buy now, pay later inched up to 11.9% of all purchases from 11.7% the year prior. In practical terms, Black Friday became a financing event as much as a discount event — a dynamic with direct implications for issuers, BNPL providers, merchant acquiring and fraud teams, since a higher share of “managed payments” can mean more complex dispute and servicing flows.

Put together, the Black Friday data aligned with what retailers told The SKU all year: shoppers want convenience, but they also want confidence — confidence in price, in delivery, in product fit and in the ability to pay without destabilizing their month.

Takeaways From 2025

The practical lesson from PYMNTS’ 2025 retail reporting is that “digital transformation” is no longer about building an app or adding another payment button. It is about rebuilding the commercial system around three realities:

• The customer journey starts with data. Retailers are monetizing first-party relationships through loyalty ecosystems and retail media, which puts a premium on identity, consent, measurement and closed-loop attribution.
• Walmart and Amazon continue to pull spend into their orbit. PYMNTS Intelligence’s Share of Wallet reporting shows Amazon extending its retail lead while Walmart holds ground with a grocery-heavy profile — an important distinction for issuers and networks trying to win everyday spend versus seasonal, discretionary spend.
• The deal is no longer just “price.” It is “price plus payment.” Black Friday underscored that installments, rewards and flexible credit structures are now part of the shopping decision, not merely the settlement method.

As 2025 closes, retailers appear to be converging on the same operating principle: use technology to remove friction and personalize at scale, but do it in a way that preserves trust and feels human.