The news: As US consumers face both holiday and household budget pressure, they’re turning to BNPL, and stored loyalty program points to bridge the gap, per Blackhawk Network.

• 48% of Gen Zers and millennials and 44% of Gen Xers and boomers will turn to BNPL to finance gifts for other people.
• And half of shoppers plan to liquidate most or all of their loyalty points for holiday shopping.

To look for deals, find the best prices, and get gift recommendations, 84% of Gen Zers and millennials and 51% of Gen Xers and boomers are turning to AI for holiday help.

How we got here: US consumers are stressed about their finances.

• 58% of consumers’ primary economic concerns are grocery and food prices, per BHN.
• 55% are worried about inflation.
• And 46% rate fuel prices as the chief concern, up 18 percentage points YoY.

As consumer sentiment plunges, shoppers across generations and income levels are trying to stay on budget for the holidays.

Recommendations for merchants: Consumer caution will define the 2026 holiday shopping season. Merchants will need to be on the offense to secure the $1.4 billion in holiday sales up for grabs, per our forecast, especially as holiday retail sales growth trails full year sales for the second year in a row. 

To snag spend from younger generations, merchants need to make sure their brands and deals are visible across top chatbots with proper GEO strategies. Forty-one percent plan to use LLMs to find the best prices for gifts, 32% will use it for deal spotting, and 31% will use it for getting product recommendations. 

AI chatbots can more easily read merchant storefronts with simple product descriptions, clearly stated pricing and promotions, and easy-to-follow purchase links.

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