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The Treat Economy: How Small Luxuries Boost Retail Returns

Guru Hariharan — Tue, 23 Sep 2025 13:48:22 +0000

As shoppers favor small indulgences over big splurges, the rising “treat economy” can help retailers capture loyalty and margin this holiday season.

Consumer prices have jumped more than 24% since February 2020, from groceries to gas, forcing many consumers to rethink how and where they spend. Over one-third of Americans have delayed, downgraded, or canceled major purchase plans for homes and cars this year.

It’s clear that shoppers are replacing big splurges and luxury items with the “treat economy”: small indulgences that feel good without the guilt. A Bank of America report found that 57% of Gen Z buy themselves a “small treat” at least once a week, from mini lip balms to $30 Labubu blind boxes, whether it’s a reward for staying on budget or a quick dopamine lift after a stressful day.

With the holiday season approaching, retailers can expect this trend of consumers moving away from extravagant shopping to continue. Between gifting, self-gifting, and last-minute impulse buys, the appetite for affordable luxuries is expected to persist, making this the ideal time for retailers to capture consumer demand.

Why the treat economy is booming

At its core, the treat economy is powered by three psychological drivers:

Reward: A small indulgence feels earned after a long workday, a stressful news cycle, or sticking to a budget elsewhere. 94% of consumers say they have a snack as a reward or treat.
Control: When prices rise across the board, buying one little thing can feel like reclaiming agency.
Mood: Some treats are all about the dopamine hit, whether it’s the sugary rush of premium chocolate, the sensory hit of a new lip gloss, or the fizz of a sparkling drink.

How retailers can tap into the treat economy this holiday season

With gifting and self-gifting colliding with the emotional tug of the holidays, these buying behaviors will likely spike in Q4. Experts have already predicted that the average planned holiday spend per person is $1,552, 5.3% less than in 2024. Gift budgets, in particular, are expected to shrink by 11%, and for Gen Z, the drop is even steeper at 23%.

This means that retailers who focus on little treats are more than ever positioned to capture both margin and loyalty. Here are three ways to turn small luxuries into big wins this holiday season.

Make impulse irresistible at every touchpoint

Impulse isn’t accidental; it’s engineered. 54% of holiday shoppers make impulsive purchases, with the highest rates among Gen Z (70%) and Millennials (65%). Holiday impulse thrives on scarcity and seasonality — a limited-edition flavor or festive design can turn a casual browse into a must-have.

For brands selling on platforms like Walmart, Amazon, and Target, lean into the mechanics that drive visibility: bid on seasonal search terms like “stocking stuffer” or “Secret Santa,” activate sponsored product ads around high-traffic categories, and ensure your items are tagged into the right holiday storefronts and “gift under $20” hubs where impulse buying is highest.

Behind the scenes, analytics and automation tools can help retailers monitor which SKUs perform in high-traffic placements and flag when performance starts to slip. Agentic AI tools can analyze dozens of signals (such as search trends, competitor activity, and conversion patterns), automatically adjust bids, and update content so that the right products surface at the right time without manual intervention.

Reframe value, not just price

In an era of inflation fatigue, messaging focusing solely on “cheap” risks devalues the product experience. Instead, lean into language that reframes value as emotional payoff: “affordable indulgence,” “a little moment of joy,” or “premium feel without the premium price tag.”

This is especially powerful in gifting, where perceived effort often outweighs actual spending. An artisanal chocolate bar with a story behind it can feel more intentional than a bottle of mid-shelf wine. The effect multiplies when the product itself is designed for gifting.

Mini sets, sampler boxes, and deluxe trial sizes de-risk the purchase by lowering both the price point and the commitment, making these formats ideal for Secret Santa exchanges, hostess gifts, or stocking stuffers.

Multiply the moments, not just the margin

Large carts are built one little treat at a time, but the real unlock is when shoppers buy in multiples — one for a friend, one for a coworker, one for themselves.

Retailers can encourage larger basket sizes while preserving the illusion of thrift by planning SKUs that are easy to grab in bundles, like multipacks of candles or curated “buy one for me, one for them” offers.

Planning for this at scale often requires demand-forecasting tools to spot when and why a product is trending — a keyword surge, a competitor promotion, or a content gap — and recommend the right adjustments to capture that lift before it’s gone.

This holiday season, rethink the shopping basket

Treat culture offers a powerful lens for understanding what today’s consumers want: joy in small doses, meaning without excess.

For retailers, it’s also a strategic opportunity. By analyzing the emotions and behaviors driving these purchases and utilizing AI tools that dynamically adjust pricing, promotions, and placement in real time, brands can boost basket size and frequency without holding their breath for big-ticket wins that may not come.

The post The Treat Economy: How Small Luxuries Boost Retail Returns appeared first on MartechView.

Beyond Partners X as Miniso Pops in Times Square

MartechView Editors — Thu, 04 Apr 2024 06:25:39 +0000

The home retailer’s social media deal involves short- and long-form content. Meanwhile, Miniso’s store concept follows a successful flagship in New York.

It’s been another week with far more retail news than there is time in the day. Below, we summarize some things you missed during the week and what we’re still thinking about.

From a Liquid Death beauty tie-up to a possible good omen at Nike, here’s our closeout for the week.

What you may have missed

Overstock.com is back in business, partnership with X planned

Beyond Inc. has relaunched Overstock.com. In a Thursday announcement, the company said the site offers “crazy good deals” of up to 30% to 70% off. The online retailer will include furniture, rugs, and jewelry categories, and in the coming months, it plans to add additional product categories.

“The relaunch of Overstock.com comes at a time of significant growth and innovation for the company, as it continues to expand its product offerings, invest in technology, and put our customers and vendors as our priority,” Beyond Inc.’s executive chairman Marcus Lemonis said in a statement.

Also, this week, Beyond, whose portfolio includes Bed Bath & Beyond and Zulily, said it has entered a strategic partnership with social media platform X, formerly known as Twitter. The company said Wednesday that the deal will generate custom short- and long-form content for Beyond, develop customer acquisition and retention strategies, and highlight the retailer’s brands on events and holidays.

A positive sign for Nike’s innovation pipeline?

According to a Wedbush analyst note, Nike’s promise to return to its product innovation roots could be off to a good start. The analysts, led by Tom Nikic, noted that Nike’s Air Max DN debuted in multiple colorways on Tuesday and sold out on the retailer’s website.

That comes after a somewhat somber earnings call last week in which Nike CEO John Donahoe said the business was “not performing at our potential” and announced a series of strategy pivots to get the brand back on track. Among them was a plan to accelerate product innovation, including investing more in design, product creation, and other departments and pulling forward some product innovations by more than a year.

A solid innovation pipeline is doubly important for Nike right now since the company is facing headwinds around some of its older styles, Nikic said. The sellout of the Air Max DN could be a good omen since Nike “has been off their game” for a while and “desperately needs a hot new product,” according to Nikic. The analyst noted that product innovation also got Nike out of its last rut around 2016.

“Thus, we see the successful initial launch as a positive data point for the brand,” Nikic said. “We’d note, however, that for a company of [Nike]’s size (over $50 billion of revenue annually), one sneaker won’t move the needle all that much, so they will need to continue bringing innovative new products to the market.”

Miniso opens second Times Square location

Miniso’s pop-up shop collaborates with Snoopy, Winnie the Pooh and Minions.

Miniso opened a pop-up shop in New York City’s Times Square next to the Disney store on Saturday, according to a press release. This is the brand’s second location in the shopping district after opening its first Times Square global flagship in May last year.

“We’re thrilled to be opening this new pop-up in Times Square,” Miniso U.S. general manager Tyrone Li said in a statement. “Our flagship store here has been a massive hit, breaking numerous brand records and proving a popular addition for Miniso joy-seekers. This new pop-up is a playful and innovative reimagining of our ‘Joy Philosophy’ that highlights our outstanding range of IP products and is sure to add even more energy to this buzzing location.”

The new location features plushies from collaborations like Sanrio, Snoopy, Winnie the Pooh, and Minions. According to the company, the pop-up has reached record sales figures in the three weeks since its initial soft opening in early March.

The second Times Square location achieved the highest sales per-square-foot record among all U.S. stores, ranking its sales performance in the top three. In December, Miniso opened its 100th store in the U.S. The company now operates 120 stores in over 20 states.

Retail Therapy

Lilly Pulitzer adds three collections at Pottery Barn

Pottery Barn plans to introduce three new collections in collaboration with Lilly Pulitzer. The collection will include outdoor accessories, towels, bedding, decor, and furniture, the company said on Tuesday. All items will be available exclusively at Pottery Barn, Pottery Barn Kids, and Pottery Barn Teen.

The new collections feature Lilly Pulitzer’s signature playful colors and patterns, produced with sustainably made materials. The collection also includes outdoor towels, pillows, and pool loungers. The collections are available now in Pottery Barn brands’ online stores.

“We’re thrilled to expand upon our partnership with the iconic Lilly Pulitzer brand for all ages of Pottery Barn brand customers,” Pottery Barn Brands CEO Marta Benson said in a statement. “Building on the success of our debut collaboration in 2018, our teams have come together to deliver new collections that celebrate the resort-style luxury and fun spirit of the beloved Lilly Pulitzer lifestyle.”

Last week, Lilly Pulitzer and Badgley Mischka announced a collab on a seven-piece capsule collection of dresses ranging from $485 to $715 that was set to debut this week through both brands’ online stores, along with some Lilly Pulitzer stores and Badgley Mischka’s two boutiques.

Liquid Death and E.l.f. Cosmetics release coffin makeup collection

The set includes a setting spray, lipstick, eyeshadow, waterproof eyeliner pen, and putty applicator.

E.l.f. Cosmetics’ newest makeup collaboration is what some might say is to die for. According to a press release, E.l.f. and beverage brand Liquid Death launched a limited-edition, black-metal-inspired makeup collection on Tuesday. The Corpse Paint Vault is valued at $34 and includes five items in a keepsake coffin.

“When you set out to create a different kind of company, aligning yourself with like-minded kindred spirits is important. We are both challenger brands on a one-way path to disruption,” E.l.f. Beauty’s Chief Marketing Officer Kory Marchisotto said in a statement. “E.l.f. and Liquid Death share a passion for self-expression and unexpected creativity. We’ve had a lot of fun — and a lot of laughter — bringing Corpse Paint to life. Pun intended.”

To create the corpse paint look, E.l.f’s set includes its matte setting spray, its satin lipstick in the shade All Night, the no-budge cream eyeshadow in Wispy Cloud, its waterproof eyeliner pen and a putty applicator.

Also Read: Contact Centers Should Focus on Upskilling Agents for Tier 2 Roles

What we’re still thinking about

$73B

That’s what ThredUp predicts the secondhand market in the U.S. will reach by 2028. That figure is notably less than the resale platform’s prediction last year of the market reaching $82 billion by 2026. According to its latest resale report, ThredUp predicts that the global secondhand apparel market will reach $350 billion by 2028.

In 2023, the used clothing market in the U.S. reached $43 billion. That compares to about $23 billion in 2018.

$18.25B

That’s how much The Home Depot intends to pay to acquire building product supplier SRS Distribution. The deal is expected to close at the end of this fiscal year.

Home Depot said the acquisition will boost business with its pro customers. SRS Distribution currently serves professional roofing, landscaping, and pool contractors.

The acquisition will also grow Home Depot’s total addressable market by $50 billion to reach about $1 trillion, the home improvement retailer said Thursday.

What we’re watching

Off-pricers get another boost, this time from Macy’s

Off-price retailers had a good holiday. Quarterly net sales at TJX, which runs T.J. Maxx, Marshalls, HomeGoods, and others, rose 13% yearly to $16.4 billion, with comps up 5% for both the quarter and the year. At Burlington, Q4 net sales rose 13.9% to $3.1 billion, with comps up 2%. And at Ross, net sales rose 15.5% to $6 billion, with comps up 7%.

These companies benefited from an extra week during the holidays, which will disappear this year. But they’ll be getting another boost in 2024 and over the next three years, as Macy’s closes 150 underperforming stores, according to Jeffries and Earnest Analytics analysts. Both see TJX, especially its T.J. Maxx and Marshalls businesses, benefiting the most. Jeffries research found significant geographic overlap between TJX and Macy’s stores, and analysts see “a few billions of dollars of share gain opportunity” for the off-price leader.

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