November 17, 2025
AI Can Help Customers Shop but Flexible Payments Help Them Stay
Holiday shopping always reflects the mood of the moment, and this year that mood is split between curiosity and caution.
Shoppers are leaning into technology in ways that would have seemed unlikely only a few seasons ago — asking AI for help, letting algorithms guide their decisions, and expecting digital tools to pick up more of the work. At the same time, they’re far less forgiving when it comes to the basics, like payments not working the way they expect. If the checkout stumbles for even a second, they simply move on.
Applause’s new Holiday Shopping & Payments Survey captures that tension accurately. Consumers want the speed, shortcuts and convenience that AI can bring. Still, they want reassurance that the foundations, such as payment choice, reliability, and smooth journeys, won’t crumble underneath it. It creates a holiday period where innovation and fundamentals carry equal weight. Retailers can’t focus on one without risking the other, and shoppers are paying closer attention to both.
According to the report, 60% of shoppers say they’ll use AI to find deals. Just over half want help choosing gifts. Once considered experimental, visual search has become a routine part of browsing. There is growing curiosity about automation, with up to 94% of shoppers saying they would try a fully fledged shopping agent.
Retailers Lag Behind Consumer AI Expectations
The enthusiasm from shoppers isn’t mirrored on the development side. Recent research shows that many brands overpromise but fail to deliver, leaving customers frustrated and ultimately damaging trust.
Only half of software professionals say their organisation is working on a purchasing agent. The rest are still weighing the idea, lack resources, or haven’t begun planning. Those who are building these tools fall into two groups: companies developing in-house and those partnering with major AI providers such as OpenAI or Microsoft. Either way, progress is slow compared with the pace at which consumers are adopting AI-friendly habits.
Shoppers Plan to Spend and Return More
Online shopping remains dominant, with 92% planning to buy digitally. Yet, the good old in-store experience is the first choice for 90% of consumers. Many shoppers expect to spend more this year than last, but they’re also prepared to return more. Around 30% expect to send back gifts or purchases, continuing a trend that has turned returns into a normal step in the shopping cycle. This adds more pressure on already massive return costs, which reached roughly $890 billion in 2024.
When it comes to social media, consumers mostly use Instagram, Facebook and TikTok for shopping. Their AI-driven recommendation systems shape what shoppers discover long before they visit a retailer’s website. Last year’s pattern is repeating, but the reliance on AI-powered feeds has only deepened.
Payment Flexibility Becomes a Make-or-Break Factor
If shoppers can’t use their preferred method, 78% will abandon the purchase. Digital wallets continue to rise, and buy-now-pay-later (BNPL) is becoming entrenched in holiday spending habits. Seventy-eight percent of those who have used BNPL plan to use it again this season, yet only 15% of developers say their app supports it.
Luke Damian, Chief Growth Officer, Applause, said: “Good news for retailers — consumers are planning a healthy mix of in-person and online shopping over the Black Friday/Cyber Monday weekend and throughout the holiday season. But it’s clear the industry needs to adapt to a world where AI is more and more involved in the customer journey. Despite continuing concerns around AI accuracy and bias, people are more than willing to let an AI agent help with their holiday shopping. This reflects the explosive growth potential of AI across markets and increasing quality that is enabling agentic AI to enter the consumer equation. It is crucial for these agents to be rigorously tested to alleviate the risks — that means human-led fine-tuning, red teaming and more.”
Despite years of conversation around frictionless commerce, technical issues at checkout are still very common. Thirty percent of shoppers will abandon a purchase if they encounter a bug at checkout, and the same percentage will leave if a glitch appears anywhere in the process. Almost 40% experienced a payment-blocking issue in the past three months alone, showing that reliability problems still undermine conversion.
