The holiday shopping wars have sparked an AI arms race — the retail industry's biggest technology experiment since the dawn of e-commerce.
Why it matters: Retailers and tech giants — from Target and Walmart to Amazon, Google and Meta — are rushing to deploy smart shopping assistants that promise to help consumers find gifts faster, spend smarter and even complete purchases.
The big picture: The same generative tech that powers chatbots is now shaping everything from product discovery to in-store navigation — testing whether consumers are ready to let algorithms do the gifting.
- It's turning 2025 into the first true AI holiday season, experts tell Axios.
- Traffic from AI-powered chat tools is projected to surge 520% year over year, and could spike to more than 1,000% on peak shopping days like Thanksgiving, Vivek Pandya, a director at Adobe Digital Insights, told Axios.
State of play: This holiday shopping season marks a turning point for artificial intelligence in retail.
- For the first time, AI isn't just behind the scenes powering recommendations — it's front and center in how people shop.
Zoom in: New AI features mark the biggest coordinated retail-tech rollout in decades — an effort to make shopping feel less like searching and more like prompting.
- OpenAI introduced a new shopping research tool inside ChatGPT that scans prices, reviews and product availability to generate personalized buyer guides — and says direct purchasing is coming through its upcoming Instant Checkout program. Target and Walmart are among the first major retailers to integrate ChatGPT as a shopping platform.
- Amazon launched Help Me Decide, an AI feature that analyzes browsing and purchase history to recommend "the right" product with one tap — and explains why it fits.
- Target rolled out new AI tools like Gift Finder, List-to-Cart Scanning and an upgraded Store Mode with in-aisle navigation and a "Find Bullseye" game.
- Walmart rolled out a suite of new AI-powered tools designed to help shoppers find deals, locate products and navigate stores more easily — part of its push to make shopping smarter both in stores and online.
- Google is infusing Search and Shopping with new AI tools like virtual try-ons and automated price tracking.
- Meta is embedding its AI assistant into Instagram and Facebook ads to match users with products in real time.
What we're watching: Retail analyst Bruce Winder notes the technology is still finding its footing.
- "Next year will be interesting to see if consumers use AI agents differently, who they trust, which partnerships are formed with retailers and how many retail dollars are sold through this new channel," Winder tells Axios.
The bottom line: Every corner of commerce — from gift search to checkout — is being rewritten by AI, and payments players are adapting too.
- Visa and Mastercard are preparing for a surge in "agentic commerce" — when AI assistants make purchases — with new security protocols designed to protect both consumers and merchants.
