PayPal has released the 2025 Holiday Shopping Survey, providing insights into US shoppers’ behaviors and offering guidance for merchants.

The study indicates that consumers now frequently switch between different shopping channels, utilize AI to explore products, revisit physical stores, and opt for flexible payment options like BNPL. Businesses that make their products accessible across AI-powered platforms are likely to capture more demand and boost sales this holiday season. Additionally, PayPal is broadening the Pay Monthly program to in-store purchases in the US, allowing customers to receive 5% cashback on all PayPal BNPL transactions both online and in physical stores.

Key Insights

A survey by Talker Research of 1,000 nationally representative US adults has revealed that 40% of Americans have used AI for purchase assistance within the past year. Among younger generations, with 61% of Gen Z and 57% of Millennials utilizing AI, 20% use it regularly as adoption is on the rise. About three-quarters (77%) of potential AI shoppers intend to leverage this technology during the holiday season, particularly for guidance and value addition. Specific aims include finding the best deals (34%), comparing products (30%), and discovering new ideas or recommendations (26%).

Regarding payment options, 50% of shoppers plan on using BNPL at checkout to manage their budget effectively and keep costs affordable this holiday season. For 52%, having the BNPL option available is a factor that encourages them to make purchases. One in four Gen Z members and Millennials use BNPL regularly, while one-third have tried it before.

PayPal suggests making BNPL options visible throughout the shopping journey so that shoppers see their choices early on, even before reaching the checkout page. This strategy can lead to a 91% higher average order value for enterprises and 62% higher sales for small businesses.

A significant finding from the survey relates to omnichannel returns. Shoppers expect seamless and rewarding experiences across all channels, and retailers who integrate their systems will benefit by capturing both sales and long-term customer relationships. Over half (64%) of shoppers plan to return to physical store purchases, with 41% shopping in both online and offline settings. Meanwhile, 28% predominantly shop online. Regardless of the channel, however, both online and in-store experiences are integral parts of the holiday season for many Americans, with rewards playing a crucial role in their purchasing decisions (74%).