The Future of Holiday Shopping: How AI and Consumer Trends Are Shaping Retail for 2025

Table of Contents

1. Key Highlights:
2. Introduction
3. The Rise of AI in Consumer Journeys
4. The Potential of Agentic AI
5. In-Store Shopping: Still the Preferred Choice
6. The Continued Importance of Value
7. Conclusion: The Future of Retail
8. FAQ

Key Highlights:

• Salesforce projects that AI will significantly influence $260 billion in online sales and $1.6 trillion in in-store sales during the upcoming holiday season.
• The preference for in-store shopping is on the rise, especially among Gen Z consumers, with 65% indicating a preference for in-person purchases during Cyber Week.
• Consumers are increasingly focused on value, with a notable shift towards secondhand goods, driven by economic uncertainties and changing shopping behaviors.

Introduction

As the holiday season approaches, retailers are preparing for another transformative year influenced by evolving technologies and shifting consumer behaviors. Salesforce's latest projections highlight a significant trend: artificial intelligence (AI) is set to play a central role in shaping shopping experiences for 2025. This year, the theme of "discovery" emerges as consumers navigate a landscape where technology and physical shopping converge. With nearly half of consumers expressing trust in AI-generated recommendations, the retail landscape is poised for change, particularly with younger generations driving new expectations for personalized shopping experiences.

The Rise of AI in Consumer Journeys

The integration of AI into shopping experiences is no longer a futuristic concept; it is a reality that is already influencing consumer behavior. Salesforce's data reveals that AI will play a substantial role in holiday shopping, affecting both online and in-store sales dramatically. The company estimates that AI will impact $260 billion in online transactions and $1.6 trillion in traditional retail sales.

A notable aspect of this shift is the increasing reliance on AI chatbots during the shopping journey. Currently, nearly 40% of shoppers report using AI chatbots to assist with their purchasing decisions, and 5% of shoppers initiate their product searches using large language models (LLMs) like ChatGPT. Particularly among Gen Z shoppers, one in ten begins their journey with these AI tools. This indicates a significant move towards a tech-enhanced shopping experience, where AI not only assists but also influences consumer preferences and decisions.

Caila Schwartz, Director of Consumer Strategy & Insights at Salesforce, emphasizes that AI-assisted searches are redefining the way consumers engage with commerce. The effectiveness of LLM-generated traffic referrals to e-commerce sites demonstrates high conversion rates, often outperforming traditional traffic sources. As consumers become more accustomed to the capabilities of LLMs, their expectations will inevitably extend to interactions with brands and retailers.

The Potential of Agentic AI

The concept of agentic AI, which can autonomously complete specific tasks on behalf of consumers, represents the next frontier in e-commerce technology. While agentic AI is not yet widely adopted, its potential is becoming increasingly apparent. Schwartz expects that as consumers grow accustomed to the personalized assistance offered by LLMs, they will demand similar experiences from retail brands.

This could manifest in several ways: consumers might request AI agents to purchase gifts on their behalf or monitor prices for high-ticket items leading up to major shopping events like Cyber Week. The seamlessness of this technology will likely shape future expectations in retail, with consumers anticipating a more integrated and personalized shopping journey.

Salesforce also predicts that 35% of retailers will leverage agentic AI to enhance employees' day-to-day operations during the 2025 holiday season. This includes automating customer service and assisting employees in inventory management, thereby streamlining operations and improving customer experience.

In-Store Shopping: Still the Preferred Choice

Despite the growing influence of AI and online shopping, physical stores remain a strong preference for many consumers, especially during the holiday season. Salesforce’s findings indicate that over half of consumers favor in-store shopping on Black Friday, a notable increase from the previous year. Gen Z, often characterized as digital natives, is leading this trend with 65% expressing a preference for in-store shopping during Cyber Week.

The tactile experience of shopping in person—immediate product availability and the thrill of discovery—are significant factors driving this preference. With the projected spending of Gen Z consumers indicating that for every $1 spent online, they will spend an additional $3 in physical stores, retailers must find innovative ways to integrate online and offline experiences.

Creating a unified commerce strategy that enhances the in-store experience through technology will be vital. Salesforce advocates for unlocking experiences across channels and unifying data to provide a consistent and personalized shopping journey, especially as younger generations gain more purchasing power.

The Continued Importance of Value

In an environment marked by economic uncertainty, consumers are increasingly prioritizing value in their shopping decisions. Salesforce's research indicates that a significant portion of U.S. consumers is feeling the pinch, with nearly 30% reporting a decline in their financial situation over the past six months. This economic backdrop is driving shoppers to seek out value-oriented purchases, and many are taking proactive measures, such as frontloading purchases in anticipation of rising prices.

Salesforce forecasts a slight decline in overall discount rates for holiday 2025 compared to the previous year, suggesting that consumers are becoming more strategic in their spending. With approximately one-quarter of U.S. consumers holding off on major purchases until Cyber Week, the pressure is on retailers to provide attractive offers at critical shopping times.

Additionally, the trend towards resale is gaining momentum, with one in five consumers planning to purchase secondhand goods, driven by economic factors and a growing awareness of sustainability. This shift reflects a broader cultural change where consumers are not only seeking bargains but also making more conscious choices about the products they buy. The projected spending on resale goods for the holiday season is expected to reach $64 billion.

The competitive landscape is also evolving as consumers prioritize free delivery, lower prices, and improved product quality. Unlike the previous year, when discount brands dominated, the focus on product quality is returning to the forefront of consumers’ minds, underscoring the need for brands to adapt to these changing priorities.

Conclusion: The Future of Retail

As the holiday season approaches, the interplay between technology and consumer behavior is becoming increasingly complex. Retailers must navigate a landscape that is rapidly evolving, marked by the emergence of AI, a resurgence of in-store shopping, and a heightened focus on value. Understanding these trends will be crucial for brands and retailers looking to thrive in this changing environment.

The future of retail is not just about selling products; it’s about creating experiences that resonate with consumers on a personal level. As AI continues to influence shopping journeys and consumer preferences shift, the ability to adapt and innovate will determine success in the competitive retail landscape of 2025 and beyond.

FAQ

Q: How will AI influence holiday shopping in 2025?
A: AI is projected to significantly impact both online and in-store sales, with estimates of $260 billion in online transactions and $1.6 trillion in in-store sales. It will enhance personalized shopping experiences and influence purchasing decisions.

Q: Are consumers still interested in in-store shopping?
A: Yes, in-store shopping remains a strong preference, especially among younger consumers like Gen Z, who seek immediate product access and a richer discovery experience.

Q: What role does value play in consumer shopping behavior?
A: Value is increasingly important, with many consumers prioritizing price, quality, and incentives like free delivery, particularly in light of economic uncertainties.

Q: What is agentic AI, and how might it affect retail?
A: Agentic AI refers to technology capable of autonomously completing tasks for consumers. Its adoption could transform the shopping experience by providing personalized assistance and enhancing customer interactions with brands.

Q: How should retailers prepare for the upcoming holiday season?
A: Retailers should focus on creating unified commerce strategies, leveraging AI for personalized experiences, and ensuring they meet consumer demands for value and quality in their offerings.