October 23, 2025
Bots, Budgets, and the New Holiday Hustle
The holiday shopping season has always been a little chaotic. This year, it’s just gone more digital. Instead of wandering through malls or scrolling endlessly for deals, millions of shoppers are letting artificial intelligence do the legwork. The bots are browsing, the budgets are stretching, and the line between planning and purchasing has blurred.
According to PayPal’s 2025 Holiday Shopping Survey, 77% of consumers who’ve tried AI for shopping say they’ll use it again this season. Almost 40% of Americans already have, led by 61% of Gen Z and 57% of Millennials. The most popular reasons are finding deals, comparing prices, and generating gift ideas without the mental clutter that usually comes with December shopping lists.
AI Decides Who Makes the Cut
AI isn’t replacing the joy of finding the perfect gift but changing how people get there. It’s the new filter between brands and buyers, deciding which products make it to the top of a chatbot’s suggestion list. Merchants’ visibility now depends as much on AI optimisation as it once did on search engines. If a product doesn’t show up in the bot’s recommendations, it might as well be sitting on an empty shelf.
While algorithms guide the hunt, buy now, pay later (BNPL) is quietly deciding what happens at checkout. Half of U.S. shoppers plan to use BNPL this holiday season, a clear sign that flexibility has become a standard part of the shopping experience. Consumers want to be in control, stretching budgets and managing cash flow.
A quarter of Gen Z and Millennial consumers use BNPL regularly, and another third have tried it at least once. And more than half of all consumers say they’re more likely to buy from a retailer offering it.
Flexible Payment Options and Rewards
Even as digital discovery accelerates, in-store shopping isn’t fading into nostalgia. Sixty-four percent of consumers plan to shop in stores this holiday season, while 41% expect to combine online and offline browsing. Rewards remain a powerful motivator, with 74% of shoppers saying they’re more likely to spend with brands offering cashback or loyalty perks.
Michelle Gill, General Manager of Small Business and Financial Services at PayPal, said: “Shoppers are moving fluidly across channels, discovering products through AI, returning to stores, and choosing flexible payment options like Buy Now, Pay Later (BNPL) to maximise this holiday season. Merchants that enable seamless experiences and deliver value at every touchpoint will not only thrive this holiday season but build stronger, long-term customer loyalty.”
