Full Breakdown
The Rise of AI in Holiday Shopping: Transforming Consumer Behavior
12/9/2025, 10:52:19 AM
AI-Powered Shopping Experience
The integration of artificial intelligence (AI) into the holiday shopping experience is becoming increasingly prevalent, with consumers turning to AI tools such as Microsoft’s Copilot, OpenAI’s ChatGPT, and Google’s Gemini for assistance in finding gifts and comparing prices. Rachael Dunfell, a Manchester resident, utilized ChatGPT to discover a niche Viking-themed gift for her husband's cousin, highlighting how AI can uncover unique products that shoppers might otherwise overlook. According to a Coresight Research survey, over half of U.S. consumers are likely to use AI for shopping this holiday season, with AI expected to drive 21% of all holiday orders globally, amounting to approximately $263 billion in sales.
Retailers Adapting to AI Trends
Retailers are responding to this shift by forming partnerships with AI companies to enhance their visibility and sales. OpenAI recently introduced an Instant Checkout feature, allowing consumers to purchase items directly through ChatGPT. Major retailers like Etsy, Shopify, and Walmart have begun listing products on the platform, aiming to streamline the shopping process. However, analysts caution that this capability is still in its infancy, with many smaller retailers lacking the necessary infrastructure to participate fully. John Harmon, a senior technology analyst, noted that the control lies with OpenAI, which determines which retailers can be featured.
Opportunities and Challenges for Small Businesses
While some small businesses, like Burlap & Barrel, are not pursuing direct partnerships with AI companies, they are focusing on enhancing their own product databases to improve visibility in AI searches. Ori Zohar, co-founder of Burlap & Barrel, emphasized the importance of having robust online content to attract AI-driven traffic. This approach allows smaller brands to leverage AI without relying solely on partnerships with larger platforms.
Broader Implications for E-Commerce
The emergence of AI-powered shopping is expected to have significant implications for the broader e-commerce landscape. Nathan Feather from Morgan Stanley Research predicts that the digitization of consumer wallets will reshape the e-commerce funnel, impacting both retailers and digital advertising. However, widespread adoption of AI shopping assistants is still in development, with current usage rates remaining relatively low compared to general AI platforms. A Morgan Stanley survey indicated that while nearly 50% of users engage with large language models, only about 23% of Americans have made purchases through AI in the past month.
Criticism and Consumer Sentiment
Despite the growing interest in AI shopping, many consumers remain skeptical about the effectiveness of AI in retail. A significant portion of respondents in a CI&T survey reported not having encountered an impressive AI-powered retail experience. This sentiment underscores the need for retailers to ensure that the product information utilized by AI models is accurate and up-to-date to avoid losing visibility, particularly for smaller brands.
Verbatim Quotes
- “It's just something that I really would never have known existed,” — Rachael Dunfell, Consumer
- “Retailers feel the urgency because AI is already shaping what people buy,” — Melanie Nuce-Hilton, GS1 US
- “Agentic will be a paradigm shift for e-commerce,” — Nathan Feather, Morgan Stanley Research
As AI continues to evolve, its impact on holiday shopping and consumer behavior is likely to grow, presenting both opportunities and challenges for retailers and consumers alike.
