Key Takeaways:
Understand why “what felt successful” and “what actually worked” are often two different answers, and how a genuine data-driven retrospective closes that gap.
Learn how to separate baseline sales from the incremental sales a promotion drove, including how cannibalization and halo effects distort the picture.
Identify which audience assumptions from the past two to three years are now outdated, especially around deal-seeking behavior and AI-assisted shopping.
Apply a goal-first framework to decide which 2026 promotions to keep, retire, or replace, instead of defaulting to last year’s calendar.
Every year around this time, retailers face the same question: which promotions should we run this holiday season? Their instincts differ; some jump straight to new offers, while others prefer to re-run the same promotions from last year. This year, let’s take a strategic, data-driven approach and dig deeper than just asking, “What worked last time, and why?”
Let’s start with:
- What were your goals from previous years? Specifically, sales numbers and margins.
- Who were your target audiences?
- What do the numbers tell you about how your promotions performed?
Holiday promotion planning is most effective when it is approached as a retrospective exercise before shifting focus to the future. Before designing this year’s calendar, it’s helpful to review the past two to three holiday seasons, analyze what you aimed to accomplish, identify your target audience, and interpret what the numbers revealed about your performance. This foundation enhances the precision of every decision regarding this year’s promotions, and it differentiates guessing from strategic planning.
Start With a True Retrospective
Most retailers remember which promotions “felt” successful, but memory is a poor substitute for data. A proper review means going back through the last two or three holiday seasons and looking at the promotions run, the offer type, the channels marketed across, the timing, and the results.
This review helps monitor promotional pricing decisions that affect margins, especially during times of economic uncertainty. Retail pricing strategists are increasingly adopting a proactive, not reactive, approach to holiday markdowns: understand your numbers before the season begins, not after margins have already declined. A structured look-back makes this proactive stance possible.
Revisit Your Goals Before Setting New Ones
Every promotion should have had a defined purpose:
- Driving foot traffic in-store or website traffic online
- Increasing the overall average order or cart value
- Acquiring new customers in a certain segment
- Building loyalty with a specific buyer persona
The problem is that many holiday promotions get evaluated only on total sales, which can mask whether the original goal was met.
For example, a discount that drove strong unit sales might have looked successful on the surface, but a deeper dive revealed that it did not acquire new customers and had thin margins. Therefore, you need to ask yourself: was this specific holiday promotion a win? Effective promotional planning distinguishes between offers designed to protect margin and those designed to drive volume, and evaluates each against the goal it was built to achieve, not a single blended sales number.
Before setting your 2026 goals, it’s valuable to reflect and clearly write down what each past promotion aimed to achieve and whether it succeeded.
Revisit Your Audience Targets
Holiday shopping habits have changed significantly over the past year or two, and much of that shift is generational. Because of this, the assumptions you made about your customers two or three years ago might no longer be valid.
Deal-seeking is now close to universal: roughly 84% of U.S. shoppers plan to use at least one money-saving tactic this holiday season, whether that’s coupons, price comparisons, or BNPL (buy now, pay later). At the same time, younger shoppers are changing how they find those deals: nearly a third of shoppers now use generative AI tools to discover and compare offers, more than double the share from the prior year. Anecdotally, I am hearing from clients that most in-store visitors over 50 are openly sharing that they use ChatGPT to find their business. If your planning last year didn’t account for AI-assisted deal discovery or price sensitivity across income levels, it’s due for a refresh when planning this season.
Let the Numbers Tell the Real Story
The most overlooked step in a holiday review is separating “what sold” from “what the promotion really impacted.” Total revenue during a promotional period includes sales that would have happened anyway, the baseline. Plus, whatever the promotion accurately drove, meaning incremental sales. Ignoring this distinction results in overestimating a promotion’s impact.
Two other effects deserve attention here as well:
- Cannibalization, where a discount on one product simply pulls sales from a full-price item rather than growing the basket
- Halo effects, where a promoted item drives sales of unrelated full-price products
Retail pricing analysts emphasize that this kind of margin-aware measurement is crucial to prevent reflexively discounting due to competitive pressure rather than strategic intent. A season that appears busy on the surface can still result in a net loss if these factors aren’t considered during the planning stage.
“The real question isn’t what sold during last year’s promotion. It’s what wouldn’t have sold without it.”
– Jennifer Shaheen
President and Founder, Technology Therapy® Group
Plan Based on the Shifting Landscape
Even a perfect read of last year’s numbers isn’t enough if the shopper hasn’t stayed the same. Several behavioral shifts are imperative to build into this year’s thinking as you start.
- Shoppers are starting earlier than ever; a majority of consumers now begin their holiday shopping in October or before, spreading spending across a longer window rather than concentrating it around Black Friday and Cyber Monday.
- Value-seeking is now mainstream, with shoppers across income brackets prioritizing deals, price comparison, and flexible payment options this season.
- eCommerce is growing faster than physical retail, and improving digital opportunities should be considered, but brick-and-mortar still captured roughly 44% of holiday spending last season, a reminder that channel strategy needs to serve both digital and in-store shoppers.
There’s also a quieter but important trend you need to be aware of: promotional fatigue. Consumers are increasingly overwhelmed by the sheer number of offers competing for their attention, and that overwhelm has a measurable cost. A large number of shoppers report abandoning their carts simply because they are indecisive when faced with too many deals vying for their attention. That’s a significant signal that more promotions aren’t automatically better; clarity and fewer, more targeted offers may perform better than volume-driven discounts.
“More promotions don’t make you more competitive. They just add to the noise your shoppers are already tuning out.”
– Jennifer Shaheen
President and Founder, Technology Therapy® Group
Where This Leads
A holiday promotion strategy built on a genuine retrospective, clear on past goals, updated audience definitions, and an honest read of the numbers, puts a retailer in a much stronger position heading into the 2026 holiday season. It replaces “let’s just run what we did last year” with a deliberate choice about which promotions earned their place and where the shopper has moved on without you.
That’s the mindset shift. The next step is translating it into a concrete action plan: setting this year’s goals, updating audience segments, and deciding exactly which promotions to re-run, retire, or replace.
