Confidence in Australian retail is rising, with nearly eight in ten (78%) businesses feeling more optimistic than last year and 76% expecting higher sales this holiday season, according to Shopify’s Holiday Retail Report. Consumer optimism is also improving, with planned Black Friday Cyber Monday spending up $98 year-on-year, from $226 in 2024 to $324 in 2025.
That optimism is paired with a more intentional approach: 58% of shoppers are setting clear caps on how much they’ll spend, and over a quarter (27%) plan to be stricter with their budgets this year, though 39% say sticking to their budget is a major challenge. Over a quarter (27%) of Australians also plan to start shopping earlier this year, rising to 30% among the country’s highest spenders — those planning to spend over A$1,990.
“Planned holiday spending may be up, but it’s still more focused than freewheeling,” said Shaun Broughton, Managing Director, APAC and Japan at Shopify. “Australian shoppers are entering the season with optimism, clearer budgets, and higher expectations. They’re starting earlier, switching channels seamlessly, and seeking real value in every interaction. Retailers that respond with precision, blending early engagement, frictionless checkouts, and the right mix of AI and human touch, will be best positioned to convert intent into lasting loyalty.”
“For us, preparing for Black Friday Cyber Monday is fundamentally about earning our customers’ trust when it matters most,” said Karim Zuhri, CTO at Koala. “We’ve focused on delivering seamless, high-performance experiences under peak load — from optimising site speed and stability, to investing in SEO and GEO, and building intelligent agentic systems that connect directly with Shopify and help us drive efficiency. This foundation lets us move faster, test more, and serve customers better. Ultimately, the retailers who treat customers with intelligence, delivering fast, factual, conversational experiences, will win their attention and loyalty.”
“Our customers treat Black Friday like a game – building their shopping list early and waiting for the perfect deal, so our promotions have to be compelling from the start,” said Stephanie Moore, Global Brand Director at Princess Polly. “It’s vital for brands to meet customers where they are – which for us means doubling down on live shopping, especially on TikTok, while also investing in smart ad spend and creative content that cuts through the noise.”
AI use rises, but shoppers still want human connection
AI is becoming a trusted sidekick for shoppers and merchants alike. Nearly two-thirds (61%) per cent of Australian consumers say they’d likely use AI for at least one task when doing their holiday shopping, while nearly half (47%) plan to use it to help them save money this year. Half (50%) of shoppers believe AI will make their shopping experiences better, especially when finding deals (31%) and inspiration (19%).
Among retailers, 86% feel positive about the impact of AI-driven features in the year ahead, and 89% are already or planning to invest in it to help customers discover or buy their products through AI shopping assistants. Many are also exploring ways to optimise their operations, focusing on AI-generated content ( 51%) and using AI to forecast inventory or demand needs more effectively (32%).
Yet, trust remains a challenge: 72% of Australians remain wary of the technology, the highest rate globally, and 78% say buying from a person still matters. Retailers that pair AI with transparency, clear opt-ins, and easy access to human support will see the greatest success.
Businesses sharpen strategies to navigate economic conditions
While confidence is up, retailers are still navigating headwinds such as rising costs (50%) and economic uncertainty (46%). Many are responding by sharpening their promotional strategies, with businesses expecting two-fifths (40%) of their sales to come from promotional pricing:
- 66% intend to introduce new types of deals to attract cost-conscious shoppers
- 53% plan to offer bigger or more frequent discounts
- 65% intend to start sales earlier and run them longer
Meanwhile, almost a third (31%) of businesses plan to focus on loyalty programs to build deeper customer loyalty this season, and 33% plan to launch new products or collections to boost results.
However, brands risk missing opportunities if they launch promotions too late. Businesses expect to run promotions for just over 12 days on average, with 36% planning to start promotions from early November, and a further 22% kicking off either the week before or over the Black Friday Cyber Monday weekend. Meanwhile, two-fifths (40%) of Australian shoppers are already writing lists and preparing purchases well before the holiday rush.
Discovery and hybrid shopping define the season
Australians are discovering products across more channels. Nearly half (44%) of shoppers are more likely to make a purchase based on discovering a product from in–store and online browsing respectively, up from 42% in-store and 41% online in 2024. This is followed by:
- Word-of-mouth recommendations: 37%
- Online product reviews or product comparison sites: 35%
- Through friends and brands they already follow on social media: 30%
- Traditional online advertising (Search or website/app banner ads): 26%
- Direct social media ads: 25%
- Social media influencer endorsements or promotions: 21%
- Traditional offline advertising (TV‚ radio‚ billboards etc): 19%
Meanwhile, retailers are increasing their investment in:
- Social media ads: 46%
- Online advertising: 37%
- Digital video campaigns: 31%
- Email marketing: 28%
- Search engine optimisation (SEO): 24%
- Influencer partnerships or creator collaborations: 23%
- In-store promotions or events: 23%
Hybrid shopping also continues to dominate. When it comes to how consumers are planning to do their holiday shopping, more than a third (38%) plan to split it evenly between online and in-store this year, while 31% plan to do a majority in-store and 25% plan to do a majority online. 50% prefer to shop online for smaller items and head in-store for larger purchases.
Checkout friction, however, remains a dealbreaker. More than half (52%) have abandoned a purchase due to complex checkout processes — especially higher spenders. Discounts (54%), free shipping or returns (44%), and excellent service (38%) are the top loyalty drivers.