Aussie shoppers embrace AI assistants to manage festive budgets

Australian shoppers are remaining committed to gift-giving traditions this holiday season, despite heightened concerns over budgets and the challenge of finding suitable presents. Research conducted amongst 1,800 consumers in Australia shows that many are looking to generative AI tools as a way to navigate cost constraints and streamline their shopping experience.

Holiday budgets

More than 80% of Australian shoppers report feeling the pressure of holiday shopping, particularly around financial limitations and the search for the right gift. However, almost three quarters (73%) say they intend to maintain or increase the number of presents they buy compared to last year. Many respondents indicated they plan to compensate for this by reducing their spending in other areas such as eating out, travel, and entertainment.

The data also indicates generational differences in how these pressures are felt. Nearly four in five Generation Z respondents and almost three quarters of Millennials report cutting back on discretionary spending, whereas less than half of Baby Boomers say the same.

AI-powered shopping

Generative AI is emerging as a shopping tool of interest among Australians. The survey found over three in five shoppers (61%) are curious to try an AI-driven shopping assistant, and 23% have already used AI for product comparisons and recommendations this year. The uptake is notably higher among younger generations, with 83% of Gen Z and 78% of Millennials expressing a willingness to use such technologies.

Alexander Mahr, Director of Coveo ANZ, highlighted the significance of trust during financially challenging periods.

"When under financial pressure, trust will become the key currency for customers. Shoppers will adopt AI faster when it can be a personal shopper, surfacing price‐honest choices, clearer trade‐offs, and real value in the moment," said Alexander Mahr, Director, Coveo ANZ.

The report shows AI is principally being used by early adopters for functions like comparing products (42%) and providing recommendations (36%). Among those who have tried it, 95% report an interest in using AI for shopping again, suggesting that practical benefits are being recognised by users.

Mahr said, "The Australian retail market has seen some early experimentation, but retailers have been hesitant to fully embrace GenAI-powered shopping tools. This report clearly signals a significant missed opportunity for retailers to truly differentiate themselves, reduce shopper stress, and drive sales this holiday season."

Online shift

A notable trend highlighted in the research is the move towards online shopping, particularly for groceries during the holiday period. Three quarters of respondents say they are likely to shop online, with 45% specifically mentioning groceries. Only 21% now begin their shopping journey in-store, underlining the increasing potential for digital tools such as generative AI to play a role in the shopping process.

Search engines and retailer websites continue to be prominent starting points for shopping, with 38% of respondents saying they begin their search with these platforms. Retailer websites account for 13%. AI assistants, though still in early stages of adoption, were cited by 2%.

Personal touch

Personalised or customised gifts have emerged as the most sought-after category this year, with 36% of shoppers placing these at the top of their holiday wishlists. This aligns with findings that many shoppers are looking for more meaningful and thoughtful presents amidst economic uncertainty.

Brand perception

Cost remains a critical factor in shaping consumer views of brands, according to the research. Some 69% of respondents say budget is the main driver for how they assess and choose brands during the holiday season. With consumers maintaining or increasing gift-giving despite wider cutbacks, the importance of budgeting is particularly pronounced.

Openness to new tools is particularly marked among younger shoppers. Those who have already engaged with AI-powered shopping assistants express a strong willingness to continue using them as part of future shopping journeys.