McKinsey recently released new data on US consumer sentiment during the holidays and ahead of the new year. The research included information on shifting priorities, growing pessimism among consumers, concerns about the cost of living, and more.
While some groups are intending to splurge and spending in some categories is growing, many consumers are being careful with spending. But while there’s plenty of caution due to a complex and difficult economic landscape, there are still plenty of opportunities for ecommerce brands to succeed.
Pessimism is Growing in Most Cases
The recent research from McKinsey on US consumer sentiment found that many consumers are more pessimistic now than they were at the beginning of the year. In the fourth quarter of this year, the amount of respondents who feel optimistic dropped 7% compared to the same period last year, while the amount that felt pessimistic rose by 9%. In total, this is a massive 16% swing in optimism in a single year.
This is understandable, as issues like a soft labor market, inflation, and a general worry about economic conditions have people feeling less confident than in the past. While this feeling of pessimism spanned across a variety of different age and income groups, there was a single outlier in Gen Z. Optimism in Gen Z was actually 6% higher than in the previous quarter.
Common Consumer Concerns
The research also dove deep into the sources of concern among US consumers in Q4 2025. The most common concern was rising prices and inflation, as 45% of respondents had this concern in their top three, up from 44% in Q3 2025.
Other concerns that were common among the top three lists of consumers include:
- Ability to make ends meet: 24%, up from 22% in Q3 2025.
- Cost and accessibility of healthcare: 23%, up from 18% in Q3 2025.
- Job security/unemployment: 19%, up from 16% in Q3 2025.
Managing Financial Pressures
The report also found that many respondents are taking measures to manage growing financial pressures in life. Consumers report a decline in savings, and many admit that they’ve dipped into savings to cover expenses, or reduced how much they’re putting towards saving. In fact, the percentage of those who either dip into savings or reduce savings amount rose by 3 points since Q3 2025.
Other measures respondents have taken include:
- Using credit cards more often: 28%, up from 26% in Q3 2025.
- Reducing food spending: 26%, up from 24% in Q3 2025.
- Took on another job or worked more hours: 13%, up from 11% in Q3 2025.
Despite Worries, Some Still Plan to Splurge
But despite the widespread caution among consumers, there are still plenty of people who plan to spend money. While spending on essentials is mainly unchanged from previous quarters (outside of a slightly larger share of consumers spending more on meat/dairy and shelf-stable groceries this quarter), some people intend to spend more on semi-discretionary items like toys, vehicles, and beauty products.
However, there’s a chance this isn’t due to consumer confidence, but thanks to the many deals around the end of the year, and shopping for the holidays.
As you could imagine with rising consumer concerns, most consumers intend to pull back on discretionary spending like buying jewelry, eating out at restaurants, purchasing furniture, and buying home improvement/gardening supplies.
However, despite this, some categories of discretionary spending are increasing compared to previous quarters, such as spending on cruises, international flights, electronics, and more.
While overall splurge intent was indeed down in Q4 2025, both high and low-income Gen Z respondents have greater plans to splurge this quarter than last. 55% of low-income Gen Z consumers intend to splurge, up from 54% last quarter. The rise for high-income Gen Z respondents is even higher, as 76% intend to splurge, up from 66%.
How Ecommerce Brands Can Prepare For More Cautious Customers
While careful spending and pessimistic consumers may not seem like the ideal landscape for sellers, there are some ways for ecommerce brands to prepare for these times and remain successful.
First, make sure you’re prioritizing value whenever possible. Highlight the durability, quality, and longevity of your products, and offer warranties or repair services to ease customer worries about purchasing your products. Also, find ways to bundle products together to offer more for less.
You should also make an effort to build loyalty during these times by treating customers right. This could be through a loyalty program, special discounts, great customer support, or a personalized experience. It’s also important to be transparent about your pricing and policies. The last thing people want during tough economic conditions is being surprised by a hidden cost or fee that wasn’t made clear.
Lastly, provide payment flexibility to your customers through installment plans, buy-now-pay-later (BNPL), or subscriptions, so they have more control and choice over how and when they pay.
