Retail Stocks to Watch: Holiday Spending Trends and AI's Impact on Shopping Experience

Holiday spending is expected to rise, with total card spending per household up 2.4% YoY in October and holiday-specific spending up 5.7%. However, retail transaction volumes have declined since January. Consumers are shelling out more cash due to inflation rather than rising demand. Lower-income households are trading down, while higher-income households continue to spend freely on discretionary goods. AI agents are becoming mainstream shopping tools, guiding purchases, suggesting gifts, and completing transactions. Retailers like Home Depot and Etsy are seeing AI referrals comprise 25% of referral traffic.