PayPal has published the 2025 Holiday Shopping Survey, predicting US shoppers’ behaviours for this holiday season and offering insights for merchants.
The study reveals that shoppers now switch between channels, use AI to discover products, revisit physical stores, and prefer flexible payment options such as BNPL. Retailers that make their products visible across AI-powered platforms will be best placed to capture demand and boost sales this shopping season. Additionally, to support merchants and shoppers, PayPal is expanding Pay Monthly to in-store purchases in the US, enabling customers to gain 5% cashback on all PayPal BNPL purchases in physical stores and online.
Key insights
PayPal commissioned Talker Research to survey 1,000 nationally representative US adults. According to the data, 40% of Americans, with 61% of Gen Z and 57% of Millennials, used AI to assist with a purchase in the last year. One in five uses AI for this purpose regularly, as adoption is accelerating. 77% of past or potential AI shoppers plan to utilise it as a shopping assistant this holiday season, citing the use for guidance and value. 34% of shoppers hope to find the best deals using AI, 30% will use it to compare products, and 26% leverage the technology to discover lift ideas or recommendations.
Regarding payment options, most consumers turn to BNPL at checkout. 50% of the shoppers surveyed plan to use BNPL this holiday season for budget control and affordability, while 52% mentioned that they’re more likely to make a purchase when the BNPL option is available. Among the generations, one in four Gen Z and Millennials use it regularly, and one-third have tried it at least once before.
PayPal recommends that merchants make BNPL visible throughout the shopping journey, so shoppers notice they have the ability to choose it even before they reach the checkout page. Data shows offering BNPL leads to a 91% higher average order value for enterprises and 62% higher for small businesses.
Another key takeaway from the survey regards omnichannel returns. Consumers expect convenient experiences and meaningful rewards, and merchants that connect every channel will capture both sales and long-term customer relationships. 64% of shoppers plan to return to in-store purchasing, with 41% planning to shop both online and in physical stores, reflecting an increase in in-store shopping. Yet, online shopping is prevalent, with 28% saying they shop primarily online. Ultimately, both channels dominate the holiday experience, and rewards drive decision-making for Americans, as 74% are more likely to return to the same merchants if they get cashback, loyalty programmes, or perks. Merchants that unify rewards, online, and in-store experiences will deepen loyalty and fuel long-term growth.
