Holiday 2025: AI Considerations for Retail
How can AI help your retail business succeed this holiday season?
With forecasts on consumer spending generally showing low YoY growth for holiday spending, this holiday season will again test how retailers appeal to evolving consumer behavior. With explosive growth in 2025, AI continues to strongly influence consumers:
- AI usage is forecasted to increase by 520% this holiday season (Adobe)
- 21% of holiday commerce will be driven by AI (SalesForce)
- eCommerce is forecasted to grow at twice the pace of total holiday sales (Deloitte)
This creates an incredibly complex dynamic – millennial buyers seeing an increase in disposable income, significant growth in social media commerce, and tariffs emphasizing values and discounting, how can retailers use AI to succeed this holiday season?
It is important to note that the term "AI" is used broadly in this paper, and includes tools such as visual search, machine learning, and generative AI.
AI Shoppers Have Higher Intent
The hype cycle for large language model (LLMs) AI agents is a fever pitch not seen since the .com hype of the late 90s. For retailers, this technology presents the opportunity to engage these shoppers in more meaningful way and beyond the SEO strategy of the last 20 years and into the age of "GEO", or generative engine optimization, to provide content that AI can interpret and present to shoppers.
Those who are using AI for shopping are demonstrating more meaningful intent to purchase. Rather than a search for a topic like "red sweater", AI searches are more akin to "where can I get a good deal on a cozy red sweater that I can wear to my company holiday party?". This ability to AI to empower shoppers to express their intent and the identifies a response that best satisfies the question.
For retailers, this creates a new challenge on managing and providing information that can be consumed by these AI tools. While AI may know that you are a fashion retailer, it may not know what you have on sale nor the inventory of cozy red sweaters. Fortunately, unlike SEO these tools do not rely on traffic or clicks to prioritize ratings, but rather the quality of the content and how it satisfies the needs of the user. With a focused marketing strategy and quality, authentic content retailers can connect to users through these tools while still maintaining their brand identity.
60% of Search Traffic is by Mobile Device
Google Lens, a leader in the visual search space, reportedly processes 12 billion visual searches each month. These mobile searches by high-intent users require retailers to provide quality and authentic photos, descriptions, and social content to match these inputs. Coupled with the increased utilization of mobile apps like Gemini, ChatGPT, and Perplexity, shoppers have far more access to information that previous agents like Google Assistant and Siri.
Incorporating a "mobile first" approach into the above AI recommendations will enable retailers to be present their brand. Fortunately, AI-powered search consumes data far more quickly than SEO, and progress on these efforts can be completed in advance of the upcoming holiday crunch.
15% Efficiency Gains Through AI Tools
The use of AI does require specific skills to make these tools effective, but fortunately the ability to use these tools in both work and personal life provide abundant opportunities to build these skills and understand how they can benefit your business. When combined with automation (tools like n8n or zapier), retailers can find and automate tasks to free up time to fun on customer engagement and content creation. Use cases can include:
- Improved understanding on cross-sell opportunities using Microsoft Excel + Copilot
- Customer service agents for frequently asked questions such as inventory, store hours, and upcoming sales
- Drafting social media content or brainstorming new ideas
- Deep research to assess your business strategy or understand emerging trends
Your Pre-Holiday AI Action Plan
The biggest hurdle to adopting AI is getting comfortable and familiar with how to use the technology. Fortunately, getting started is more accessible than ever and most of us have more access to AI than we are aware. Finding opportunities to practice these skills in our own lives – low stakes things like planning a party or researching a weekend getaway – are your opportunity to get comfortable and determine how to leverage these tools in your business.
In advance of the holiday crunch, here's your action plan to prepare and make the most of this season's AI opportunity:
Maximize what you have: Review what is available to you from your current providers, such as Shopify, Weebly, or Stripe. Many of these vendors already have AI-tooling available and include 30-day trials. Determine if you can reliably implement these tools prior to the holiday crunch, and don't forget to cancel if you decide to try them out.
Prioritize mobile experience: Ensure your website loads quickly and features a frictionless, one-click checkout experience on smartphones. As phones use our historical data, don't rely on your own device(s) as the history of these can be biased toward your store. You can use the tools in your laptop's browser to simulate different layouts & use "private browser" mode.
Start drafting content: Using AI is a skill, and one that requires practice to succeed. If you're not already doing so, leverage free or low-cost tools to draft emails or social media posts, and then adjust them to reflect the tone of your business. These models learn more about you and your preferences as they are used, so the more frequently you engage, the better they adjust to your style.
Create a simple agent: Implement that basic rules-based chatbot with an emphasis on holiday-specific information such as hours, return policies, and Small Business Saturday specials. Some of the above services include these pre-built agents already or you can engage third party services to create your own with minimal technical skills.