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U.S. holiday retail spending climbed 4.2% year-over-year, according to Visa, but the nominal growth was driven by a surge in e-commerce and AI-powered shopping rather than a massive increase in volume.
A hybrid holiday: Physical stores are far from dead, capturing 73% of all holiday transaction volume. However, the real momentum is online, where sales grew 7.8% as shoppers cashed in on early deals and the promise of doorstep convenience.
The AI shopping cart: Shoppers flocked to upgrade their gadgets, making electronics the season's top category with sales rising 5.8%. Visa credits this to demand for "high-performance devices in the AI era" and notes that AI played a larger role than ever. "This season also marked a turning point, with artificial intelligence shaping how people discover products, compare prices, and interact with offers,” said Wayne Best, Visa's chief economist.
While spending is up, the growth is heavily influenced by inflation and a strategic shift to online, AI-assisted shopping. Retailers are no longer just competing on price, but on digital convenience and smarter discovery.
