As Australian shoppers prepare for Black Friday, Cyber Monday and Christmas, confidence is quietly returning to retail. However, consumers are more deliberate in their spending, more demanding of value, and more discerning when it comes to which brands they trust.
New findings from Shopify’s 2025 Holiday Retail Report show Australians plan to spend 43 per cent more during Black Friday–Cyber Monday than last year. Yet 58 per cent are setting clear caps on how much they will spend, and more than a quarter will be stricter with their budgets this year. For retailers, that combination of optimism and restraint shows that Australians are becoming more intentional with their spending, so retailers need to be more strategic than ever to win the battle for wallet share in the months ahead.
“Shoppers are entering the season with clearer budgets, higher expectations, and less patience for friction,” says Shaun Broughton, MD for Apac and Japan at Shopify. “They’re starting earlier, moving seamlessly between channels, and looking for brands that can meet them with precision – the right product, at the right moment, with the right level of human connection.”
This peak season, AI is set to drive that connection, he says.
From curiosity to capability: How shoppers are using AI
Once seen as experimental, AI is now embedded in everyday shopping behaviour. Nearly two-thirds (61 per cent) of Australian consumers say they’ll use AI for at least one task when doing their holiday shopping, and almost half (47 per cent) expect it to help them save money.
For many, AI isn’t a novelty; it’s a shortcut to efficiency. Half of Australian shoppers believe AI will enhance their shopping experience, particularly when it comes to finding deals (31 per cent) or gift inspiration (19 per cent). The sentiment skews even higher among big spenders, with 70 per cent of those planning to spend over $1990 believing AI will enhance their experience.
But Australians remain cautious innovators. The same report found 72 per cent are wary of AI – the highest rate globally – and 78 per cent say buying from a person still matters.
According to Broughton, this duality is shaping a distinctly Australian path to AI adoption.
“Navigating this balance and building trust with shoppers at scale is a tough task,” he says. “Retailers need the right tools that convert wariness into curiosity, and curiosity into comfort. It’s clear that AI is already shaping how people shop, so brands that fail to deploy AI-powered discovery and personalisation will lose market share to those that do, especially from younger and high-spending shoppers.”
Retailers respond with intelligence and intent
On the other side of the counter, retailers are equally committed to using AI to sharpen performance. Eighty-six per cent feel positive about its impact in the year ahead, and 89 per cent are already investing in AI tools to help customers discover or buy their products.
However, they are shunning hype in favour of chasing results. Around half (51 per cent) are using AI-generated content to streamline creative workflows, while a third (32 per cent) are using predictive models to forecast demand and manage inventory more effectively. Nearly half (42 per cent) are prioritising AI-driven personalised recommendations – especially critical during high-traffic shopping events when milliseconds and messages make the difference between conversion and abandonment.
“AI is no longer about automation for automation’s sake,” says Broughton. “It’s about amplification – empowering teams to make better decisions, faster. The smartest retailers are using AI to complement their people, not replace them.”
That philosophy is already evident among some of Australia’s most innovative Shopify merchants.
Koala: Building an AI nervous system
At furniture and lifestyle brand Koala, AI is being embedded across the organisation. The company has been developing an in-house AI concierge, trained on product data and directly connected to Shopify, which provides real-time answers about stock and delivery.
Behind the scenes, Koala’s AI “nervous system” is aiming at powering everything from cart recovery to operational forecasting. When a customer abandons a purchase, an AI agent would instantly generate a personalised recovery offer, balancing customer appeal with product margin and available inventory.
According to Koala CTO Karim Zuhri, this intelligence is what allows businesses to scale fast without losing its distinctive tone. “For us, preparing for Black Friday Cyber Monday is about earning our customers’ trust when it matters most,” Zuhri says. “That means delivering seamless, high-performance experiences under pressure, and AI plays a critical role in helping us do that.”
Broughton says Koala’s approach exemplifies how AI can enhance the customer experience without compromising authenticity. “They’ve created an intelligent loop between data and service,” he notes. “When AI is trained on accurate information and used with intention, it helps retailers serve customers faster and more meaningfully.”
Showpo: Faster campaigns, smarter connections
For online fashion retailer Showpo, AI is the creative tool that keeps its fast-moving brand in sync with customer demand. During major sales, the company uses AI to power personalised product recommendations, helping shoppers cut through thousands of SKUs to find what suits their style and budget.
The same technology supports its digital marketing team, optimising campaigns in real time, testing creative variations, and scaling spend automatically based on conversion potential. Showpo has even experimented with AI voiceovers for video ads, enabling the team to produce content at scale without sacrificing freshness.
“The pace of digital retail means you can’t wait weeks to see what works,” says Broughton. “Showpo’s marketing team is using AI to get answers in hours – then applying human judgement to interpret those insights. That’s the ideal balance.”
Boody: Delivering data-led value
Sustainable essentials brand Boody is also using AI – not to replace human decision-making, but to make it sharper. Through Sidekick, Shopify’s AI-powered commerce assistant, the Boody team can quickly surface insights about shopper behaviour, such as how returning customers respond to bundles or promotions compared with new visitors.
During BFCM, Boody plans to use those insights to identify which product combinations deliver the highest average order value, and then adjust promotions and emails in near real-time.
“AI gives Boody a more responsive lens on what customers value in the moment,” says Broughton. “It helps them act on the data faster – which is what modern retail is really about.”
The trust equation: AI meets empathy
Broughton believes the future of retail innovation will depend as much on trust as on technology. “The brands that win this season will be those that combine intelligence with integrity,” he says. “That means being transparent about how AI is used, giving customers clear choices and opt-ins, and ensuring there’s always a human touchpoint available when it matters.”
Shopify’s data supports this. While 86 per cent of retailers are optimistic about AI’s role, human connection is not being forgotten – from live shopping and social engagement to in-store experiences that merge digital convenience with tactile reassurance.
Hybrid shopping continues to dominate: 38 per cent of Australians plan to split their holiday spending evenly between online and in-store, and more than half say complex checkouts remain a dealbreaker. In other words, technology and human-centred design go hand in hand, and both are essential to capturing attention and loyalty.
Intelligent retail, human connection
If last year’s retail narrative was one of resilience, this year’s is one of readiness. Brands are preparing earlier, personalising deeper, and blending technology with empathy to meet rising expectations.
“AI is becoming the great equaliser,” says Broughton. “It gives every retailer – from startups to global brands – the ability to compete on insight and responsiveness. From automated tasks to AI assistants, with the right tools, retailers can navigate complex consumer shopping behaviour and drive greater efficiencies and accelerate growth.
“At the heart of it all, customers want to feel understood. With the right balance of AI and human touch, Aussie retailers will be best positioned to convert intent into lasting loyalty this holiday season.”
That may be the secret to retail success, concludes Broughton: Smarter service that feels human.
