This holiday season, artificial intelligence is reshaping how people shop, helping consumers find unique gifts and compare prices in ways that were previously time-consuming. Shoppers are increasingly turning to AI tools like Microsoft-owned Copilot, OpenAI’s ChatGPT, and Google’s Gemini to identify presents, with implications for retailers and bargain hunters alike.
Rachael Dunfell, 33, from Manchester, found the perfect Christmas gift for her husband’s 21-year-old cousin using Copilot. By entering his age, his love of specialised racing bikes, and interest in Vikings, the chatbot led her to a niche online store selling Viking-themed metal bike parts. “It’s just something that I really would never have known existed, but it was perfect,” she said.
Industry analysts say this holiday marks the first in which AI is shaping purchasing decisions on a significant scale. While precise data on AI-driven spending is limited, Salesforce estimates that AI could influence 21% of global holiday orders this year, amounting to $263 billion in sales. Surveys support the trend: more than half of U.S. consumers said they would probably or definitely use AI to assist with shopping, while a CI&T survey of 2,000 consumers in the UK and Ireland found that 61% had used AI tools for price comparisons or locating products.
Despite growing adoption, many shoppers remain unimpressed with AI-powered retail experiences. More than two-thirds of respondents in the UK survey could not recall an AI-driven shopping interaction that stood out. Retailers are responding by prioritising AI partnerships to capture consumer attention. “Retailers feel the urgency because AI is already shaping what people buy,” said Melanie Nuce-Hilton, senior vice president at GS1 US, a standards organisation. She noted that inconsistent product information can disadvantage smaller brands, as AI recommendations often prioritise widely documented products.
The technology is evolving beyond product discovery. OpenAI recently introduced Instant Checkout, allowing users to purchase items directly through ChatGPT. Major retailers such as Etsy, Shopify, Walmart, Salesforce, and Target have partnered with OpenAI to list products on the platform. Walmart, for instance, said the partnership enables customers to plan meals, restock essentials, and discover products simply through chat.
However, the adoption of direct AI-driven purchases is still in its early stages. Analysts note that AI companies control which retailers are featured, leaving smaller businesses waiting for approval. “It’s OpenAI’s game. They’re in control of who is listed and how long it takes,” said John Harmon, senior technology analyst at Coresight Research.
For small businesses, AI can still drive traffic. Burlap & Barrel, a U.S.-based spice company, credits AI-generated searches for some of its recent growth, even without formal partnerships with AI firms. Co-founder Ori Zohar said the company focuses on building comprehensive product information that AI tools can access, helping shoppers discover its offerings.
Consumers also see benefits in using AI for niche gifts. Allan Binder, 35, a teacher in Hanoi, uses AI to find presents ranging from artisan scissors in England to pottery in Indonesia. “AI has the potential to connect very targeted products with their audience,” he said, though he cautioned that relying solely on AI without additional research may lead to uninformed purchasing decisions.
As AI continues to influence holiday shopping, it is enhancing discovery for informed consumers while giving retailers both opportunities and challenges in an increasingly competitive market.
