Gen X Spending Power, Value Retail, and AI: Inside the Trends Reshaping Holiday 2025 and Retail’s Future
Insights from DLC’s Adam Ifshin and ICSC CEO Tom McGee at ICSC New York
The energy at ICSC New York was unmistakable with packed aisles, active dealmaking, and a retail industry proving its resilience once again. On the show floor at the Javits Center, DLC’s Founder and CEO Adam Ifshin and Tom McGee, President and CEO of ICSC, met for a wide-ranging conversation on consumer behavior, the state of retail, and what lies ahead in 2026.
Below is a full breakdown of the forces shaping the industry right now, from the underestimated power of Gen X to the surge in value-oriented shopping, from omnichannel strategy to capital-markets sentiment, and from supply-chain stability to the rise of AI.
Holiday 2025 Outlook: Resilient Consumers and a Value-Driven Season
ICSC is forecasting 3.5 to 4 percent holiday sales growth, a continuation of steady patterns throughout 2025. Even with persistent price sensitivity, consumers — especially those in stable jobs — continue to spend.
Discount retail remains the strongest performer, a trend strengthened by inflation awareness and a heightened focus on stretching household budgets.
Why Gen X Is the Most Overlooked Force in Retail
One of the most powerful insights from the conversation: Gen X may be only 19 percent of the population, but drives roughly one-third of all consumer spending.
Key reasons include:
- They are in their prime consumption years (ages 45–60).
- They are responsible both for raising children and caring for aging parents.
- They are positioned to receive a significant intergenerational wealth transfer.
Gen X is exceptionally value-oriented, price-sensitive, and efficiency-driven — making frictionless shopping and omnichannel convenience critical.
This also explains why Gen Z has rediscovered brick-and-mortar: their Gen X parents modeled in-person shopping as a social and experiential activity.
The Return of Brick-and-Mortar: Stores Are Now Fulfillment Engines
The store is no longer just a place to shop — it is an essential part of the last-mile logistics ecosystem.
As McGee noted, retailers like Kroger are expanding in-store fulfillment for online orders, joining leaders such as Target, where 90–95 percent of digital orders are already fulfilled from stores.
Why the shift?
- Stores are closer to consumers, speeding delivery.
- They act as brand billboards in the community.
- ICSC’s Halo Report confirms that stores increase online sales, while store closures reduce them.
In today’s world, the only channel that matters is the consumer channel — and the blending of digital and physical touchpoints has never been stronger.
Capital Markets Are Favoring Retail Again
For the first time in nearly two decades, retail has returned to favor within the capital markets. With little to no net new development since the financial crisis, existing retail space is scarce — and in high demand.
Because construction costs remain elevated (often north of $500 per square foot), acquiring existing centers presents a compelling value opportunity relative to replacement cost.
While overall commercial real estate transaction volume may moderate, retail continues to stand out with durable fundamentals and increasing investor conviction.
Strong Traffic and a Stabilizing Supply Chain
Despite expectations that post-pandemic traffic growth would plateau, many open-air centers are seeing continued robust gains heading into Holiday 2025.
Retailers report that supply-chain constraints have eased significantly. While value-oriented shoppers are buying earlier, retailers appear well-stocked for the season.
The Real Role of AI in Retail: Efficiency First
AI may dominate headlines, but McGee emphasized that its near-term impact is primarily operational:
- workflow optimization
- enhanced property management
- better use of data
- improved efficiency for owners and operators
More futuristic consumer-facing applications remain limited, but the potential trajectory is similar to the early internet: big long-term impact, unclear timeline.
A Resilient Industry Moving Into 2026
Looking ahead, both leaders shared optimism. After weathering the “retail apocalypse,” the rise of online competition, and the shock of the pandemic, the industry has emerged stronger — anchored by adaptive retailers, disciplined development, and the enduring relevance of physical space.
Open-air retail, value centers, and well-located suburban stores continue to outperform and offer compelling opportunities for operators, investors, and brands.
Conclusion
Holiday 2025 is shaping up to be a season defined by value, efficiency, and experience — themes driven heavily by Gen X and embraced by younger generations. As omnichannel strategy continues to evolve and capital markets show renewed enthusiasm, retail enters 2026 with momentum and clarity.
For companies across the sector, the message is clear:
The consumer is resilient. The store is essential. And retail’s future is stronger than ever.
