Unwrapping the trends: how consumers are shopping this holiday season

We’re moving into the biggest shopping season of the year, and according to the National Retail Federation, consumers are slated to spend 2.5%–3.5% more than they did last year. This means that retailers must clearly understand consumer sentiment going into this busy season, and be ready for what’s to come.

How are consumers shopping this season, and how do they want to integrate AI into their ecommerce experiences? We polled 1,000 U.S.-based adults to get a deeper understanding.  

The findings are telling, but ultimately prove that consumers do want to integrate AI into their shopping experiences – with 36% interested in using GenAI-powered reviews summarizing product pros and cons during the holidays and 40% year-round. Yet, they’re still having a hard time fully trusting the technology. For example, 59% of shoppers would rather get advice directly from their family and friends – not AI – when deciding what to gift them. 

Luckily, retailers have an opportunity to change this sentiment by being transparent with when and how AI is used, detailing how their AI is developed with security and privacy in mind, and, perhaps most importantly, explaining how the tech solves consumers' most pressing challenges. Additionally, retailers should plan to leverage smarter and more powerful AI more regularly to provide the online experiences shoppers are looking for. 

Interested to learn more about how consumers feel going into this holiday season? Read on to see the top findings from the survey. 

Consumers are searching for deals

According to 61% of respondents, inflation is a large concern going into the holiday season – so when talking about deal days, it only makes sense that consumers are actively taking advantage. When asked how they’re approaching upcoming deal days, consumers noted they’re shopping the following: 

• Amazon’s October Prime Day: 48%

• Walmart’s Holiday Deals: 26%  

• Target’s Circle Week: 24% 

• Kohl’s 3 Days of Deals: 13%

• Waiting for Black Friday/Cyber Monday: 19% 

• Not shopping any deal days: 22%

AI – your gift-giving sidekick 

It can be hard trying to find the perfect gift during the holidays with 48% of consumers noting the search stresses them out – this number jumping to 57% for Millennials and 66% for Gen Z. Enter: AI! When asked if they would be interested in using generative AI product comparisons, which summarize and present the differences between various products while shopping, 39% of consumers would be interested in utilizing this feature year round and 36% want this specifically for holiday gift shopping. As noted earlier, people are cost-conscious this holiday season – these product comparisons may help identify the less-expensive product that still boasts quality – or “dupe” as the kids on TikTok say. 

What’s on consumers’ wish lists? 

This holiday season is gearing up to be greener than usual, but not how you may think. When asked what type of gift consumers would rather receive this year, the majority of respondents said money, or gift cards, at 67%. This isn’t surprising, as the majority of consumers listed inflation as a top concern for them. 

Additionally, while 40% want a gift directly from their wish list, 35% are looking to be surprised – they want a product that wasn't on their radar. 

Millennials want AI for holiday shopping relief 

The holidays  stress Millennials the most, with 66% saying gift shopping is a source of anxiety. Additionally, while on average just 22% of consumers are worried about the shorter window between Thanksgiving and Christmas – this number increases to 33% for Millennials. This may be why just 18% of them are waiting for Black Friday deals, most started their shopping early. In fact, 60% shopped Amazon’s October Prime Days. 

When it comes to leveraging AI for shopping assistance, Millennials want the help. For example, 56% note they would prefer AI’s recommendation for gift ideas over their friend or family member – and 55% say they’re not ashamed to have AI help choose their gift. They say as long as it’s a great gift, who cares if AI helped? 

Opportunities for retailers

Who would you trust to pick out the perfect gift for yourself during the holidays? While it’s clear that some consumers trust AI enough to help pick out the perfect gift – they’re still not totally sold on the technology knowing them better than their loved ones, even when trained on their retail preferences and past purchases. According to our survey, the majority (54%) say they would not trust AI more than those in their life to pick out their gift – but some respondents still think AI is the ultimate Santa: 

• AI vs. Friends: 24% say AI wins 

• AI vs. Coworkers: 19% say AI wins 

• AI vs. Siblings: 17% say AI wins 

• AI vs. Romantic partner: 14% say AI wins 

• AI vs. Parents: 13% say AI wins 

However, some consumers are on the fence. When asked if they think AI could know their loved ones’ gift preferences better than they do, results were mixed:

• 43% said that it’s possible, but they’d still trust their own instincts more

• 36% said no

• 21% said yes

With trust in AI-supported shopping lacking, – this presents itself as a major opportunity for retailers. Now is the time to implement smarter technology, solutions that truly know and understand the customers, and show them that: “hey, maybe I can trust AI to pick a better gift than my sister!” 

On the hunt for a solution?

The survey shows that it’s gearing up to be a stressful holiday season – but nothing retailers can’t handle with a bit of AI and the right partner. 

Leveraging powerful tools, like Algolia’s end-to-end AI search, retailers can have ChatGPT-like intelligence right in their search bars. This technology deeply understands the consumers and what they’re looking for, so they can search as they think without being met with the dreaded “no results” page.