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Featured Post from Louisiana State University
LSU Experts Break Down Artificial Intelligence Boom Behind Holiday Shopping Trends
Dec 12, 2025
6 min
Consumers are increasingly turning to artificial intelligence tools for holiday shopping—especially Gen Z shoppers, who are using platforms like ChatGPT and social media not only for gift inspiration but also to find the best prices.
Andrew Schwarz, professor in the LSU Stephenson Department of Entrepreneurship & Information Systems, and Dan Rice, associate professor and Director of the E. J. Ourso College of Business Behavioral Research Lab, share their insights on this emerging trend.
AI is the new front door for search:
Schwarz: We’re seeing a fundamental change in how consumers find information. Instead of browsing multiple pages of results, users—especially Gen Z—are skipping to conversational AI for curated answers. That dramatically shortens the shopping journey.
For years, companies optimized for SEO to appear on the first page of Google; now they’ll have to think about how their products surface in AI-generated recommendations. This may lead to a new form of “AIO”—AI Information Optimization—where retailers tailor product descriptions, metadata, and partnerships specifically for AI visibility. The companies that adapt early will have a distinct advantage in capturing consumer attention.
Rice: This issue of people being satisfied with the AI results (like a summary at the top of the Google results) and then not clicking on any of the paid or organic links leads to a huge increase in what we call “zero click search” (for obvious reasons).
For some providers, this is leading to significant drops in web traffic from search results, which can be disconcerting due to the potential loss of leads. However, to Andrew’s point of shortening the journey, it means that the consumers who do come through are much more likely to buy (quickly) because they are “better” leads.
This translates to seemingly paradoxical situations for providers: they see drops in click-through rates and visitors/leads, yet revenue increases because the visitors are “better.”
There is a rise in personalized shopping journeys:
Schwarz: AI essentially acts as a personal shopper—one that can instantly analyze preferences, budget, personality traits, or past behavior to produce tailored gift lists. This shifts power toward “delegated decision-making,” in which consumers allow AI to narrow their choices.
Younger consumers are already comfortable outsourcing this cognitive load. However, as ads enter the picture, these personalized journeys could be shaped by incentives that aren’t always transparent. That creates a new responsibility for platforms to disclose when suggestions are sponsored and for users to develop a more critical lens when interacting with AI-driven recommendations.
Rice: This is also a great point. The “tools” marketers use to attract customers are constantly evolving, but this seems in many ways to be the next iteration of the Amazon.com suggestions that you find at the bottom of the product page for something you click on when searching Amazon (“buy all x for $” or “consumers also looked at…,” etc.), based on past histories of search and purchase, etc.
One of the main differences is that you can now create virtually limitless ways to compare products, making comparisons less taxing (reducing cognitive load and stress), which may, in some cases, increase the likelihood of purchase. These idiosyncratic comparisons and prompts lead to the truly unique journeys Andrew is discussing.
You no longer have to be beholden to a retailer-specified price range. You could choose your own, or instead ask an AI to list the products representing the best “value” based on consumer reviews, perhaps by asking to list the top ten products by cost per star rating, etc.
Advertising is becoming more subtle and conversational:
Schwarz: With ads woven directly into AI responses, the traditional boundary between content and advertising blurs. Instead of banner ads, pop-ups, or clearly labeled sponsored posts, recommendations in a conversational thread may feel more like advice than marketing. This has enormous implications for consumer trust.
Retailers will likely see higher engagement through these context-aware ad placements, but regulatory scrutiny may also increase as policymakers evaluate how clearly sponsored content is identified. The risk is that advertising becomes invisible—something both platform designers and regulators will need to monitor carefully.
Rice: This is definitely true. I was recently exploring an AI-based tool for choosing downhill skis, but the tool was subtly provided by a single ski brand. I’m not sure the distribution of ski brands covered was truly delivering the “best overall fit” for a potential buyer, rather than the best possible ski in that brand. At least in that case, it was somewhat disclosed.
It does, however, become an issue if consumers feel misled, but they’d have to notice it first. Still, the advantages are big for retailers, and the numbers don't lie. According to some preliminary Black Friday data, shoppers using an AI assistant were 60% more likely to make a purchase.
Schwarz: This shift is going to reshape multiple layers of the retail ecosystem:
- Retailers will need to rethink how they show up in AI-driven environments. Traditional SEO, ad bids, and social media strategies won’t be enough. Partnerships with AI platforms may become as important as being carried by major retailers today.
- Because AI tools can instantly compare prices across dozens of retailers, consumers will become more price-sensitive. Retailers may face increasing pressure to offer competitive pricing or unique value propositions, as AI reduces friction in comparison shopping.
- Retailers who integrate AI into their own websites—chat-based shopping assistants, personalized gift advisors, automated bundling—will gain an edge. Consumers are increasingly expecting conversational interfaces, and companies that delay will quickly feel outdated.
- As AI tools influence purchasing decisions, consumers and regulators alike will demand clarity around how recommendations are generated. Retailers will need to navigate this carefully to maintain
What I think we are going to see accelerate as we move forward:
- AI-powered concierge shopping will become mainstream. Within a couple of years, using AI to generate shopping lists, compare prices, and find deals will be as common as using Amazon today.
- Retailers will create AI-specific marketing strategies. Instead of optimizing for keywords, they’ll optimize for prompts: how consumers might ask for products and how an AI system interprets those requests.
- More platforms will introduce advertising into AI models. ChatGPT is simply the first mover. Once the revenue potential becomes clear, others will follow with their own ad integrations.
- Greater scrutiny from policymakers. As conversational advertising grows, transparency rules and labeling requirements will almost certainly.
- A new era of “conversational commerce.” Buying directly through AI—“ChatGPT, order this for me”—will become increasingly common, merging search, recommendation, and transaction into a single seamless experience.
I can speak to this on a personal level. My college-aged son is interested in college football, and I wanted to get him a streaming subscription to watch the games. However, the football landscape is fragmented across multiple, expensive platforms.
I asked ChatGPT to generate a series of options. Hulu is $100/month for Live TV, but ChatGPT recommended a combination of ESPN+, Peacock, and Paramount+ for $400/year and identified which conferences would not be covered. What would have taken me hours only took me a few minutes!
Rice: On the other hand, AI isn’t infallible, and it can lead to sub-optimal results, hallucinations, and questionable recommendations. From my recent ski shopping experience, I encountered several pitfalls.
First, for very specific questions about a specific model, I sometimes received answers for a different ski model in the same brand, or for a different ski altogether, which was not particularly helpful, or specs I knew were just plain wrong.
Secondly, regarding Andrew’s point about the conversational tone, I asked questions intended to push the limits of what could be considered reliable. For example, I asked the AI to describe the difference in “feel” of the ski for the skier among several models and brands.
While the AI gave very detailed and plausible comparisons that were very much like an in-store discussion with a salesperson or area expert, I’m not sure I fully trust when an AI tells me that you can really feel the power of a ski push you out of a turn, this ski has great edge hold, etc. It sounds great, but where is the AI sourcing this information? I’m not convinced it’s fully accurate.
It also seems we’re starting to see Google shift toward a more AI-centric approach (e.g., AI summaries and full AI Mode). At the same time, we’re also starting to see AI migrate closer to Google as people use it for product-related chats, and companies like Amazon and Walmart have developed their own AI that is specifically focused on the consumer experience.
I can’t imagine it will be long before companies like OpenAI and their competitors start “selling influence” in AI discussions to monetize the influence their engines will have.
Connect with:
Dan Rice
Associate ProfessorDr. Rice utilizes theory to generate impactful insights into consumer response.
Experimental DesignDigital MarketingMarketing ManagementConsumer BehaviorInternational Marketing
Andrew Schwarz
ProfessorDr. Schwarz is an expert in issues related to IT strategy, change management and IT implementation.
Emerging TechnologiesQuantitative MethodsTechnology TrendsIT ManagementIT Governance
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Holiday Shopping 2025: LSU Expert Dan Rice on The Impact of Tariffs, Tech, and Changing Behavior
Dan Rice, LSU marketing associate professor and director of the E. J. Ourso College of Business Behavioral Research Lab, shares insights on what’s changing, what’s driving spending trends, and what to watch for as we head into the end of the year. What do you expect for holiday shopping trends this year? Like most other years in recent history, most of the bodies forecasting holiday spending are predicting increases in total sales. The National Retail Federation (NRF) is predicting a growth rate of 4%, with sales totaling over $1 trillion. Other bodies like Simon Kucher, a pricing consultancy, project increases of over 7%, and Visa was projecting roughly 10% raises in gift spending. While these figures always vary between entities due to different specific formulas, it appears that some of the higher numbers were released earlier in the year, suggesting that later numbers may be reflecting a more up-to-date market forecast. Interestingly, this projected increase is happening despite many bodies, including the NRF, suggesting a decrease in planned per person spending. This suggests that the population growth of consumers might explain the increase in total sales for retailers, even if there’s a true decrease per person. We may also begin to see the impacts of tariffs on pricing in the holiday shopping season. This is supported by the Visa report, which suggests real spending growth of 2.2%, indicating that fewer items are being purchased despite revenue increases. What’s different about this year compared to previous holiday seasons? There have been several fairly unique situations. First, we’ve had the recently ended government shutdown, which impacted a lot of people and created a large degree of financial pain. Whether and when missed paychecks are made may still be unclear, and that has added a lot of concern for consumers. Additionally, the extensive but confusing levying of various tariffs has put the U.S. at an overall effective tariff rate of nearly 18%, the highest since 1934, according to the Budget Lab at Yale University. That adds substantial amounts to consumer costs and concerns, with 74% expecting tariffs to impact their shopping, according to Nerdwallet. We’re also seeing decreased enthusiasm for the holiday sales, particularly within certain demographic groups. How might the current economic climate affect consumer spending this holiday season? This is where we start to see the effects of what some might call a “two-tier economy.” The higher spending might be driven by the more affluent consumers who are more financially sound, while other data suggest that as many as 1 in 4 households are living paycheck to paycheck, making increased spending for them unlikely. We’re also seeing projections for certain demographic groups at much lower spend projections. Nearly 20% of the population intends to spend less, according to Visa. PWC is projecting spending declines of 5%, and GenZ responses indicate a 23% drop in planned spending. But there are many ways you split segments. People who are concerned about tariffs are planning to spend 10% less, according to PWC. People with kids will tend to spend more than last year, while people without kids will spend less than last year, according to NRF projections. So, it really does come down to individual-level financial and other factors. This may very much be a situation where the affluent drive the average numbers. Are any new shopping trends emerging for 2025 based on recent NRF or Deloitte data? One that has been picked up on by Deloitte, among others, is the tendency of certain (generally younger demographics like Gen Z in particular) to start using AI-based tools and social media not only for gift ideas, but also to find the best prices. Internet searches for “discount” and “coupon” codes are up 11% according to PWC, suggesting many consumers are concerned about saving money. Link to full story here.
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Dan Rice, LSU marketing associate professor and director of the E. J. Ourso College of Business Behavioral Research Lab, shares insights on what’s changing, what’s driving spending trends, and what to watch for as we head into the end of the year. What do you expect for holiday shopping trends this year? Like most other years in recent history, most of the bodies forecasting holiday spending are predicting increases in total sales. The National Retail Federation (NRF) is predicting a growth rate of 4%, with sales totaling over $1 trillion. Other bodies like Simon Kucher, a pricing consultancy, project increases of over 7%, and Visa was projecting roughly 10% raises in gift spending. While these figures always vary between entities due to different specific formulas, it appears that some of the higher numbers were released earlier in the year, suggesting that later numbers may be reflecting a more up-to-date market forecast. Interestingly, this projected increase is happening despite many bodies, including the NRF, suggesting a decrease in planned per person spending. This suggests that the population growth of consumers might explain the increase in total sales for retailers, even if there’s a true decrease per person. We may also begin to see the impacts of tariffs on pricing in the holiday shopping season. This is supported by the Visa report, which suggests real spending growth of 2.2%, indicating that fewer items are being purchased despite revenue increases. What’s different about this year compared to previous holiday seasons? There have been several fairly unique situations. First, we’ve had the recently ended government shutdown, which impacted a lot of people and created a large degree of financial pain. Whether and when missed paychecks are made may still be unclear, and that has added a lot of concern for consumers. Additionally, the extensive but confusing levying of various tariffs has put the U.S. at an overall effective tariff rate of nearly 18%, the highest since 1934, according to the Budget Lab at Yale University. That adds substantial amounts to consumer costs and concerns, with 74% expecting tariffs to impact their shopping, according to Nerdwallet. We’re also seeing decreased enthusiasm for the holiday sales, particularly within certain demographic groups. How might the current economic climate affect consumer spending this holiday season? This is where we start to see the effects of what some might call a “two-tier economy.” The higher spending might be driven by the more affluent consumers who are more financially sound, while other data suggest that as many as 1 in 4 households are living paycheck to paycheck, making increased spending for them unlikely. We’re also seeing projections for certain demographic groups at much lower spend projections. Nearly 20% of the population intends to spend less, according to Visa. PWC is projecting spending declines of 5%, and GenZ responses indicate a 23% drop in planned spending. But there are many ways you split segments. People who are concerned about tariffs are planning to spend 10% less, according to PWC. People with kids will tend to spend more than last year, while people without kids will spend less than last year, according to NRF projections. So, it really does come down to individual-level financial and other factors. This may very much be a situation where the affluent drive the average numbers. Are any new shopping trends emerging for 2025 based on recent NRF or Deloitte data? One that has been picked up on by Deloitte, among others, is the tendency of certain (generally younger demographics like Gen Z in particular) to start using AI-based tools and social media not only for gift ideas, but also to find the best prices. Internet searches for “discount” and “coupon” codes are up 11% according to PWC, suggesting many consumers are concerned about saving money. Link to full story here.
