This holiday season, artificial intelligence (AI) is changing the way people shop for gifts. Rachael Dunfell from Manchester used AI to find a unique Christmas present for her husband’s cousin, a 21-year-old interested in racing bikes and Vikings. By entering his age, hobbies, and interests into Microsoft’s Copilot, she discovered a niche retailer selling Viking-themed metal bike parts—a gift she never would have found on her own.
AI Shapes Holiday Shopping Trends
AI tools, such as Microsoft Copilot, OpenAI’s ChatGPT, and Google Gemini, are increasingly helping shoppers with gift ideas and price comparisons. Analysts believe this is the first holiday season significantly influenced by AI. Salesforce predicts AI could account for 21% of all holiday orders globally, generating $263 billion (£197bn) in sales.
Surveys support this shift: over half of U.S. consumers say they are likely to use AI for shopping, while a UK and Ireland survey of 2,000 shoppers found that 61% had already used AI tools, mainly to locate items or find the best deals. However, most respondents struggled to identify an AI-powered retail experience that truly impressed them.
Retailers Adapt to AI Shopping
Businesses are rapidly adopting AI to promote products. Melanie Nuce-Hilton of GS1 US explained that outdated or inconsistent product information can reduce the accuracy of AI recommendations, often impacting smaller brands’ visibility.
AI is now moving beyond suggestions. OpenAI recently launched an Instant Checkout feature, allowing shoppers to purchase items directly through ChatGPT. Partnerships with retailers like Etsy, Shopify, Walmart, Salesforce, and Target aim to integrate products seamlessly into AI platforms. Walmart highlights that customers can now plan meals, restock essentials, or discover new products simply by chatting.
Opportunities and Challenges for Retailers
Not all retailers can sell directly through AI chats yet. OpenAI controls which companies are approved and listed, putting smaller businesses at a temporary disadvantage. Experts suggest retailers may benefit from prioritizing AI partnerships to attract younger, tech-savvy audiences and enhance brand perception.
Burlap & Barrel, a U.S.-based spice company, has seen AI-driven traffic to its website boost sales. Co-founder Ori Zohar credits the company’s detailed online content for making its products more discoverable via AI searches, though the company currently avoids direct AI partnerships, focusing instead on maintaining a robust database for AI tools to access.
Benefits and Risks of AI Shopping
AI offers personalized and targeted shopping experiences. Allan Binder, a 35-year-old teacher and sound engineer, uses AI to find niche gifts worldwide—from artisan scissors in England to pottery in Indonesia. He says chatbots connect unique products with interested buyers, making informed shoppers even more effective.
However, relying solely on AI carries risks. Consumers who do not supplement AI recommendations with independent research may make less thoughtful purchases. Binder emphasizes that while AI can enhance shopping for informed users, it could also encourage less considered spending for others.
