The First Trillion-Dollar Holiday. Not One Dollar Given Lightly.

Two Americas went shopping. One celebrated. One calculated.

“Walk on road. Walk right side, safe. Walk left side, safe. Walk middle, sooner or later, get squish just like grape.” — Mr. Miyagi, The Karate Kid (1984)

A friend runs a DTC brand in our portfolio. This past weekend she told me her Black Friday was up 40% year over year. I asked what drove it. She paused. “Honestly? Fear. They’re buying like they think the deals won’t come back.”

She’s not wrong. $11.8b flowed through American eCommerce on Friday. A record. By the time you read this, Cyber Monday will have broken it. We’re on pace for the first trillion-dollar holiday season in history. And underneath the confetti, something feels off.

Foot traffic fell 4%. Unit sales declined. Shoppers bought fewer items but paid more for each one. Two-thirds told researchers they wouldn’t purchase anything unless it was discounted. Buy Now, Pay Later jumped 9% in a single day, $747 million financed before the weekend even started.

The money is there. The joy isn’t.

At Sugar Capital we’ve been investing in consumer brands for years, and I’ve never seen a market this bifurcated. The top 10% of earners now drive nearly half of all spending. They’re buying luxury apparel, premium skincare, the $400 espresso machine without blinking. Everyone else is running an optimization problem. Stacking promo codes. Refreshing browser tabs. Treating Black Friday not as an event but as one data point in a month-long negotiation with their own anxiety.

I know people doing the math at midnight. Which gifts can wait. Which ones can’t. Whether the 15% off email is worth holding out for, or if the item disappears by morning. They’re not browsing. They’re working.

Two Americas shopping in the same stores. One celebrates. One calculates.

This is the hollow boom. Record revenue, record stress.

What interests me is what it reveals about where consumer brands can actually win. The middle shelf is dying. Not slowly. Now. You’re either selling to the affluent, who want taste and will pay for it, or you’re competing on pure value against Amazon and Walmart, two companies with distribution advantages you will never match. Amazon undercut competitors by 14% this weekend. Walmart pushed eCommerce up 22% while quietly rolling out prestige fragrances. Target had to give away tote bags stuffed with free products just to create a line at the door.

Read that again. Target bribed people to show up.

The brands getting squeezed are the ones in between. Good enough quality. Reasonable prices. No real reason to exist. In a growing economy, they survive on convenience and habit. In this market, they’re invisible. Consumers are too busy hunting for the best deal or too wealthy to care about anything less than exceptional.

And here’s where it gets interesting. The discovery layer is shifting beneath everyone’s feet. Adobe found that bot-driven traffic to retail sites jumped 805% year over year. Shoppers arriving through AI assistants converted 38% more often than everyone else. People are asking machines what to buy. Not searching. Asking.

If your brand isn’t legible to a language model, you may already be disappearing.

This changes how brands get built. SEO mattered when people searched. Social mattered when people scrolled. Now they’re asking. And when they ask, the answer has to be you. Not your category. You. The brands that win will be the ones an algorithm can explain in a sentence. Clear positioning. Distinct value. A reason to exist that fits in a prompt. Fuzzy brands built on vibes won’t survive the first clear alternative.

The deeper lesson is simpler. The only defense is desire. Not manufactured. Not influencer-rented. Real want. The kind that pays full price because it can’t imagine the alternative.

A trillion dollars went looking for that this season. Most of it anxious. Much of it borrowed. All of it hoping Christmas still feels like Christmas.

Be worth believing in.