On October 22, 2025, PayPal Holdings Inc. released its highly anticipated 2025 Holiday Shopping Survey, providing valuable insights into consumer behavior as the holiday season approaches. The survey reveals trends that merchants must understand to capture sales and foster customer loyalty during this critical shopping period.

1. Key Findings from the Survey

The Rise of AI in Holiday Shopping

A major takeaway from the survey is the increasing reliance on artificial intelligence (AI) among consumers. A striking 77% of respondents indicated that they plan to use AI tools for their holiday shopping this year. This trend highlights the imperative for merchants to enhance their online visibility across AI-driven platforms where consumers are actively searching.

Demographic Insights: Among those using AI, 61% of Gen Z and 57% of Millennials have leveraged AI for shopping assistance within the past year, with 20% doing so regularly.

Purpose of AI Use: Consumers primarily seek AI for value-oriented tasks, such as finding the best deals (34%), comparing products (30%), and discovering gift ideas (26%).

Buy Now, Pay Later (BNPL) Becomes Mainstream

The survey also underscores the mainstream acceptance of the Buy Now, Pay Later (BNPL) payment model. Half of the consumers surveyed plan to utilize BNPL options during the holiday season, seeing it as a means to manage their cash flow effectively.

Impact on Purchasing Decisions: A notable 52% of shoppers reported being more inclined to complete purchases when BNPL is available, showcasing its influence on consumer behavior.

Demographic Leaders: BNPL adoption is particularly strong among younger generations, with one in four Gen Z and Millennials using it regularly, and a further third having tried it at least once.

"As shoppers increasingly opt for flexible payment solutions, it’s essential for merchants to integrate options like BNPL throughout the shopping journey, which can significantly boost sales," stated Michelle Gill, General Manager of Small Business and Financial Services at PayPal.

Omnichannel Shopping Experiences

This year, consumers display a clear preference for omnichannel shopping, indicating a return to in-store shopping alongside online purchases.

In-Store and Online Trends: The survey reveals that 64% of shoppers intend to visit physical stores for holiday shopping, with 41% planning to shop across both online and in-store platforms. Despite the resurgence of in-store shopping, 28% still prefer to shop primarily online, illustrating the need for merchants to cater to both channels.

Rewards Influence: A significant 74% of respondents indicated that they are more likely to shop with merchants offering cash back or rewards, emphasizing the importance of integrating loyalty programs into the shopping experience.

PayPal's Initiatives to Support Merchants

In response to these evolving consumer preferences, PayPal is enhancing its offerings. The company is expanding its Pay Monthly program to cover in-store purchases across the U.S. Additionally, shoppers can earn 5% cash back on all BNPL purchases, both online and in-store, throughout the holiday season.

2. Conclusion: Embracing Change for Success

As the holiday shopping season approaches, the insights from PayPal's 2025 Holiday Shopping Survey serve as a critical guide for merchants aiming to optimize their strategies. The integration of AI, the adoption of flexible payment methods like BNPL, and the focus on creating seamless omnichannel experiences will be pivotal in capturing sales and fostering long-term customer loyalty.

Merchants that adapt to these trends and prioritize customer experience will not only thrive during the holiday season but also position themselves for sustained growth in the future.

Original press release