How AI And BNPL Are Rewriting Holiday Shopping

By the time peak holiday shopping deals land in inboxes this year, a lot of shoppers will already have a digital co-pilot. Some will be asking AI tools to shortlist gifts, while others will be planning Buy Now, Pay Later (BNPL) repayments before they ever hit “buy.”

Christmas 2025 is shaping up to be the most digitally assisted festive season yet, with software influencing how people decide what to buy and how to pay for it.

What’s new isn’t just the technology, but the way people are using it. Convenience, confidence, and control now sit at the center of the holiday journey. Shoppers are happy to let algorithms shoulder some of the work—as long as they keep their hands on the steering wheel.

AI’s Big Moment in Holiday Shopping

That appetite for digital backup isn’t hypothetical; it’s already showing up in the numbers.

Checkout.com’s latest research finds that 46% of UK consumers would be open to using an AI agent to help with their Christmas shopping, and those who are interested would allow an average “trust threshold” of £200 for the AI to spend on their behalf. In fact, 42% of respondents admit to already using tools like ChatGPT for gift ideas.

Jenny Hadlow, chief operating officer at Checkout.com, believes this could mark a real turning point.

“Every year there’s a new trend shaping how we shop for Christmas, and this year, agentic AI could transform how we find, choose and buy our festive essentials,” she says. “The real potential of agentic shopping lies in its ability to navigate the vast landscape of options—comparing deals, scanning holiday sales, and optimising for the best consumer outcomes, from price to personal preference.”

That doesn’t mean the concerns have disappeared though.

Checkout.com’s research highlights fear of losing control, missing the personal touch, and worries about fraud and privacy as the main reasons people hesitate to let AI do more. When asked what would build trust, shoppers point to secure systems, easy returns and refunds, spending limits they can set themselves, and instant purchase alerts.

In other words, they want AI to filter the noise and surface smarter choices—not to make opaque decisions in the background.

Discovery Is Getting Smarter

Beyond fully “agentic” systems, AI is already reshaping how people research products long before they reach the checkout.

Jen Pollard, Senior Analyst at Visualsoft, believes that generative AI shopping, like Shopify-ChatGPT Instant Checkout and Google AI search, “may have an early impact.” However, Pollard is hesitant to label this shopping season as “transformational” and is instead leaning more towards “experimental.”

But Klaviyo takes a different stance, describing Black Friday and Cyber Monday 2025 as the first truly “AI-fueled” holiday shopping season. The company reports that more than half of consumers say they’ll use AI tools to compare deals or plan purchases. Instead of one frantic sales day, Klaviyo sees spending spread across a 16-day window that begins roughly 10 days before Black Friday.

Shopify’s Global Holiday Retail Report points in a similar direction.

The company finds that 64% of shoppers expect to use AI for at least one task in their holiday journey, while 88% of businesses are investing in AI-driven discovery tools. At the same time, 73% of consumers still value human interaction somewhere in the process.

Even as more shoppers rely on AI tools and digital wallets, they still anchor decisions in trust, loyalty, and connection.

Research from LoyaltyLion shows that 71% of Gen Z and Millenials say they feel more emotionally connected to brands through loyalty programs, while Antavo’s data suggests roughly seven in ten shoppers join those programs primarily for rewards, discounts, or cash back, with a meaningful share also motivated by personalized offers and perks like free shipping or early access.

For smaller businesses, that blend of automation, loyalty, and humanity is particularly important.

Andrew Goodacre, CEO of the British Independent Retailers Association, argues that artificial intelligence has moved from buzzword to practical tool.

“AI is no longer a distant concept requiring huge investment or technical expertise,” he says. “It’s readily accessible, often affordable, and increasingly user-friendly. For independent retailers, this is transformative.”

He also stresses that AI should sit alongside human service, not replace it. The strongest model is “AI plus human”: digital tools handle stock management, basic queries, and marketing, while staff focus on personalized service which keeps people coming back.

Buy Now, Pay Later as a Planning Tool

If AI is changing how people decide what to buy, BNPL is quietly changing how they decide when and with what means to pay.

Clearpay’s Festive Insights Wrapped report finds that more than a third of shoppers are planning to use BNPL this season to give them extra flexibility, with adoption strongest among Gen Z and Millennial consumers.

Their motivations are mostly pragmatic.

Clearpay reports that 63% of those who plan to use BNPL cite convenience as a key reason, 58% point to reliability, 52% to flexibility, and 51% to speed. Many shoppers are not trying to expand their overall budget; they are looking to smooth out the impact of big-ticket purchases or spread the cost of multiple family commitments over several paychecks.

Rich Bayer, CEO at Clearpay, sees that as a defining pattern for 2025.

“The festive season is always a special time, but 2025 brings fresh financial challenges for many households,” he says. “What we’re seeing is a pragmatic approach; people are still planning to celebrate, but they’re planning earlier, being practical with their budgets, prioritising self-care, and turning to tools like BNPL to help them manage their spending responsibly.”

However, that pragmatism doesn’t eliminate risk.

Used thoughtlessly, BNPL can still encourage overspending or lead to missed payments and fees. As BNPL becomes standard at checkout, retailers and providers will both be judged on how transparent they are with shoppers.

Technology, Trust, and the Holiday Playbook

This holiday season, AI, BNPL, and one-click checkout are no longer nice-to-haves; they’re must-haves as the modern-day consumer expects smart recommendations, flexible ways to pay, and a checkout that feels instant.

But even still, shoppers gravitate toward brands they recognize, clear terms at checkout, and real humans when something goes wrong. The retailers that will stand out aren’t the ones with the flashiest tech, but the ones that combine digital speed with transparency, loyalty, and a human tone, making holiday shopping feel both effortless and genuinely worth returning to.