AI agents and tighter budgets are reshaping holiday retail media
Welcome to the “Main Event”: the frantic stretch in December just before Christmas, when shoppers are desperately looking for gifts and brands are fighting for attention.
This holiday season isn’t just crowded — it’s recalibrated. AI-powered shopping agents are changing how consumers discover and choose products, while tighter wallets are forcing brands to prove value fast. The result: Retail media has become the most critical channel in the marketing mix, rewarding precision and punishing waste.
Retail media is already surging. Global retail media ad spend is set to reach $196.7 billion in 2026, overtaking combined linear and connected TV spend next year, according to WARC. While retail media accounted for just a quarter of TV spend in 2019, agentic commerce has boosted interest, thanks to a combination of AI agents and real-time data rewriting the marketing playbook.
“Many consumers expect higher prices and are planning to pull back on spending in favor of shared experiences,” said Sean Reed, Saylor’s head of accounts. “That shift is pushing brands to focus their campaigns on emotional value with smarter promotions and clearer messaging, while leaning on AI-driven personalization.”
At the same time, economic uncertainty has driven people — and brands — to search for better value.
“Budgets are largely holding steady, though every dollar is being examined more closely than in prior years,” said Austin Brown, New Engen’s director of media services. “Clients are pushing for measurable outcomes and expecting more from every impression.”
AI is making shopping a conversation
While Black Friday brought a bump in U.S. in-store traffic this year, online shopping still dominates. Around 2.77 billion people worldwide are expected to make an online purchase in 2025 — and more than 10% of those are Americans, according to Capital One Shopping. Online sales will account for 18.4% of retail revenue in the U.S. this year.
And with online commerce comes the inevitable rise of the AI shopping assistant.
“The best ‘place’ to target is less a single platform and more a connected journey, with AI-backed support and recommendations following the naughty or nice shopper across channels,” Reed said.
Adobe predicts that traffic to retail sites driven by generative AI-powered searches will jump 4,700% this year. More shoppers, especially Gen Z and younger millennials, are starting their gift hunt with ChatGPT, Gemini or another AI-powered LLM.
“That number jumps even higher for Gen Zers, who are treating them like a hybrid best friend, personal shopper or head elf,” he explained. “These AI channels are simplifying the buying journey even further.”
That said, some research suggests that consumers have mixed feelings about AI agents buying products on their behalf or accessing too much personal data. Many shoppers are perhaps more comfortable with AI shopping assistants recommending products and improving customer service.
Across agencies, AI is becoming a core workhorse. From automating audience targeting and creative testing to surfacing insights and optimizing bids, it’s doing the heavy lifting — but it’s not replacing humans. Saylor launched Elevado earlier this year, a creative studio built at the intersection of AI, VFX and production to free human teams to focus on creative direction.
“We’ve seen firsthand how the attitude towards AI has changed drastically over the last six-plus months since launch too,” Reed said. “AI basically went from a scary concept people were afraid to embrace to everyone’s best friend overnight. It’s being integrated into everyday life, whether people realize it or not.”
Jellyfish’s Agent Shopper illustrates how deeply this runs. The tool tracks how AI agents recommend products, the queries they use, the content they consult and the reviews and third-party signals shaping those recommendations. For better or worse, shoppers trust social proof, reviews and consensus over brand messaging, Natasha Wallace, Jellyfish’s global chief strategy officer, pointed out.
“[Agent Shopper] also gives us a very long and exhaustive list of sources, which is absolute gold for when we want to be able to increase our visibility in areas that aren’t within the brand’s control,” she said. “So influence for agents and for AI is driven by consumer consensus.”
Economic anxiety is driving a search for value
Despite the promise of AI-driven discovery and authentic social content, the economic reality is setting the tone. Consumers are more price-sensitive this year, and many believe this may be the new normal. As a result, ads are finding more success promoting built-to-last makes over a one-time bargain.
“From a media standpoint, that’s translating into advertisers leaning harder on performance accountability and flexibility,” New Engen’s Brown said. “E-commerce brands, in particular, are planning more dynamically, reacting to consumer behaviors and media efficiencies to capitalize on performance trends as they develop.”
Brands are reallocating dollars away from broad, upper-funnel splashy campaigns, instead doubling down on lower-funnel tactics like search, shopping and performance-driven retargeting. With volatility high, brands are not locking in budgets months ahead anymore. There’s an emphasis on real-time buying, optimizing every few days and letting performance decide where the money goes.
“The days of locking in a static Q4 plan months in advance are gone. Our clients expect ongoing optimization and quick adjustments,” Brown said.
Despite the changes, that doesn’t mean there can’t be winners.
“Overall, it’s a year where thoughtfulness and agility are winning out over broad, universal-message approaches,” Brown said. “Advertisers that can respond fastest to market conditions, and communicate relevance and value clearly, are the ones best positioned to capture share as the season unfolds.”