The 2024 holiday shopping season is shaping up as a pivotal moment for artificial intelligence in retail, as major retailers and brands embrace AI tools to capture an increasingly digital-savvy consumer base, particularly Gen Z shoppers who are planning to spend more this season.
According to Summer DuBois, director of Operations and Agency Innovation at marketing agency Public Label, retailers are finding powerful new ways to leverage generative AI for personalizing the shopping experience.
“AI-driven product recommendations can now tailor gift suggestions based on real-time browsing patterns, helping brands adapt to changing shopping behaviors,” DuBois says.
This shift comes as retailers face both opportunities and challenges.
Fiverr's September global survey found that 70% of retailers are investing in AI technologies, while 43% of Gen Z consumers plan to increase their holiday spending this year. The research also revealed that over half of Gen Z shoppers are already using AI to assist with their holiday shopping – whether for finding the best prices (17%), discovering new gift ideas (22%), or even creating presents (18%).
Major retailers are taking notice. Amazon's Rufus chatbot has already answered "tens of millions of questions" from shoppers, while Nordstrom recently launched an AI-enhanced mobile app featuring "Style Swipes" that makes personalized product recommendations based on user preferences.
The retailer's refreshed app includes trend reports that blend stylist expertise with generative AI to deliver relevant trends and improved search capabilities that let shoppers describe items in their own words. "It's clear that Amazon sees value in AI-powered shopping assistants," notes DuBois, who points to tools like Vizit.ai and Neurons as examples other retailers can follow for optimizing e-commerce content and analyzing consumer attention.
However, the integration of AI into retail comes with important considerations. Zach Ricchuiti, Associate Vice President of Client Solutions at Kepler Group, warns that brands need strong SEO strategies to ensure visibility in AI recommendation systems. "Brands with poor SEO strategies will likely get featured less prominently in these AI shopper tools, which often use relevancy ranking to recommend products," he notes.
The impact of AI extends beyond just product discovery. According to Boston Consulting's 2024 Holiday Outlook Survey, consumer spending intentions reflect current economic conditions. While 28% plan to increase spending and 27% expect to spend less, just under half (45%) plan to spend the same as last year.
The survey notes that while real consumption has continued to grow post-pandemic and American household incomes remain historically strong, retailers are looking to AI for efficiency and personalization across their operations.
Traditional holiday marketing tools are also getting an AI makeover. "Advent calendars and affiliate gift guides are far from obsolete," DuBois notes. "Publishers are beginning to use AI to personalize content in real-time, while AI-powered chatbots and visual search make gift guides more interactive and user-friendly."
On the advertising front, Ricchuiti highlights how major platforms are embracing AI for creative customization. "Meta, Amazon, and Google have all recently rolled out in-platform tools that allow for customization of assets, giving media buyers more flexibility to customize assets for seasonal relevance," he says.
The transformation extends to physical retail as well. Walmart has reported success with AI-driven chatbots for gift recommendations, with CEO Doug McMillon noting during the retail giant's FY Q2 2025 August earnings call that generative AI is already helping drive digital impulse sales – for instance, suggesting complementary items like shin guards and cleats when someone shops for a soccer ball.
As the holiday season approaches, retailers face the challenge of balancing AI innovation with customer experience. DuBois emphasizes that "brands should ensure their AI is developed to feel intuitive and human-like; poorly executed AI can risk disengaging shoppers."
She also stresses the importance of compliance with data privacy regulations like GDPR and CCPA, as AI tools rely on personal data to enhance the shopping experience.
With Gen Z leading the charge in AI adoption and digital shopping, the 2024 holiday season may well mark a turning point in how retailers use artificial intelligence to connect with customers and drive sales.
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