The Rise of AI in Holiday Shopping

Artificial intelligence is set to play a significant role this holiday season, with both consumers and merchants increasingly relying on it for various shopping tasks.

American Express reports that 72% of Gen Z and millennial small business owners are already using AI, compared to 59% among older generations. Among those who recently adopted AI, the trend favors Gen X and Baby Boomers over younger cohorts, although both age groups are catching up.

According to PayPal data, more than three-quarters of consumers plan to use AI as a shopping assistant this holiday season. Currently, 40% of respondents have used AI for purchases in the past year, with half doing so regularly.

The Many Ways Shoppers Use AI

Shoppers utilize AI in diverse ways during holiday shopping, such as finding deals, comparing products, and discovering gift ideas or recommendations. However, none of these activities were cited by more than half of the respondents.

AI as a Vital Tool for Merchants

Small businesses are rapidly integrating AI into their operations, with 72% of Gen Z and millennial owners already leveraging it. Nearly three-quarters of these small business owners report positive returns on investment (ROI) from AI, commonly noting increased employee productivity and reduced errors.

Christopher Miller, Lead Analyst of Emerging Payments at Javelin Strategy & Research, emphasizes the importance for businesses to adapt their technical and business capabilities to meet consumer demands. Failure to do so could result in losing out on potential customers.