Electronics Lead Again, With Apparel and Beauty Rebounding
ChatGPT predicts that electronics will be the top holiday category as shoppers upgrade to AI-enabled laptops, tablets, earbuds and home devices. The model expects more households to replace old tech, especially among remote workers and students.
Apparel is bouncing back after two slower years. ChatGPT anticipates increased demand for outerwear, winter basics and athleisure, supported by AI-driven sizing tools that lower return risks. Beauty and self-care also remain strong, with high interest in fragrances, skincare kits, and hair tools driven by gifting trends on TikTok and Instagram.
Home goods continue to sell but lean more towards small appliances and décor instead of large furniture.
Online Shopping Dominates, but Stores Pull Shoppers Back
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ChatGPT expects online channels to maintain the largest share of holiday spending, boosted by AI-powered search, retailer chat assistants, and personalized deals that make discovery easier. Many shoppers will use chat prompts to compare products, check prices, and access curated gift lists.
In-store shopping is picking up again. The model expects more people to visit physical stores for apparel try-ons, electronics demos, same-day pickups, and last-minute gifts. This aligns with PYMNTS’ 2025 findings, which show that consumers browse online but still complete and confirm purchases in stores.
Discount retailers, warehouse clubs, and off-price chains are likely to perform well as shoppers try to stretch their budgets. Direct-to-consumer brands are also regaining ground as AI tools help target returning customers more effectively.
Credit Cards Stay on Top While BNPL Expands Sharply
ChatGPT predicts that credit cards will continue to be the main holiday payment method because of rewards and broad acceptance. PYMNTS reporting backs this up; Despite rising usage of debit cards and mobile wallets, credit cards still dominate larger online purchases.
Installment payments are growing quickly. ChatGPT expects buy now, pay later (BNPL) usage to increase across electronics, apparel and beauty as shoppers divide larger purchases into manageable payments. PYMNTS’ data indicates that over 75% of paycheck-to-paycheck consumers have used BNPL in the past year, with younger shoppers being the most frequent users.
The U.S. BNPL market is set to reach $175 billion in transaction volume by 2025, solidifying its role as a tool for managing budgets. Digital wallets are also expanding, particularly within mobile-focused checkout processes and conversational shopping platforms.
Shoppers Stretch the Season, Then Surge in Late December
ChatGPT anticipates that the 2025 shopping season will be more consistent across November and December rather than peaking around Black Friday and Cyber Monday. Early promotions and AI-driven pricing encourage earlier purchases as retailers compete for consumer spending.
Still, the model predicts a surge in late December, especially between Dec. 15 and Dec. 22, driven by pickup orders, fast shipping deals, and last-minute gifts. Corporate gifting adds to this trend as companies make bulk purchases.
The larger economic context explains why the season may be extended. Americans have $18.6 trillion in household debt, including record credit card balances, according to PYMNTS analysis. Nearly half of consumers say they would struggle to handle a $2,000 emergency. As a result, shoppers may be more careful with their spending.
Returns Rise in January, Favoring Retailers With Frictionless Flows
ChatGPT predicts a slight increase in returns in early January as consumers exchange sizes or replace early-season purchases found later at lower prices. Retailers that make the process easy, such as having box-free returns, instant refunds, and same-day exchanges may boost sales during these visits.
The model suggests that categories with high variability, like apparel and beauty, could see the most significant volume of returns. Electronics returns may also rise, especially when holiday discounts overlap with new-year sales events.
