Artificial intelligence is rapidly reshaping how consumers discover and buy products during the holiday season, with new data pointing to a material impact on global retail sales. AI-powered shopping tools are expected to drive $263bn in online holiday spending this year, accounting for more than a fifth of total digital orders, as retailers and technology platforms race to position themselves where consumers are increasingly starting their searches.
Shoppers are turning to conversational AI platforms such as ChatGPT, Google’s Gemini and Perplexity to generate gift ideas, compare prices and narrow choices more quickly than through traditional search. These tools allow users to describe recipients, budgets and preferences in natural language, producing curated suggestions that replicate aspects of in-store assistance. Retailers report that this shift is shortening decision times and increasing purchase intent, particularly during peak holiday periods marked by time pressure and choice overload.
Data cited in the report show that traffic arriving at retail websites from generative AI platforms is significantly more valuable than other digital sources. Visitors coming via AI are more likely to complete purchases, spend more time browsing and generate higher revenue per session. This has encouraged major retailers including Walmart, Target and Etsy to integrate directly with AI platforms, enabling product discovery and, in some cases, checkout without requiring customers to leave the chatbot environment.
The rise of AI-driven shopping is also forcing a rethink of digital marketing strategies. Brands are reallocating budgets away from traditional search engine optimisation towards formats designed to improve visibility within AI-generated answers. Product listings are being rewritten with richer descriptions, use cases and contextual detail to better align with how AI systems rank and recommend items, while some companies are hiring specialist firms to help navigate this emerging “answer engine” economy.
Not all retailers are taking the same approach. Amazon has sought to limit access by external AI tools to its product data, instead prioritising its own in-house shopping assistant. The divergence highlights strategic uncertainty over how much control platforms should cede to third-party AI intermediaries as discovery patterns evolve.
While consumer reactions remain mixed, the scale of projected spending suggests AI is moving beyond novelty into a meaningful commercial channel. How transparently recommendations are ranked, how costs are shared between retailers and platforms, and whether smaller brands can remain visible will shape how this new layer of digital commerce matures beyond the current holiday surge.
