AI, online growth drive 5% rise in Aussie Xmas spend

Australian retail spending in the run-up to Christmas has risen 5% year on year, with strong growth in department and discount stores and a sharp increase in online sales, according to new data from Visa.

The figures, drawn from Visa Consulting & Analytics' Retail Spend Monitor and the company's Global Spending Shift research, indicate that shoppers are spreading purchases over a longer pre-Christmas period. They are also adopting artificial intelligence in the shopping process while expressing heightened concern about payment security.

The Retail Spend Monitor tracks transactions over the seven weeks from the start of November. It recorded a 5% rise in total retail spending compared with the same period a year earlier.

Departmental and discount stores recorded the fastest growth. Spending in this category rose 16.1%. Electronics retailers reported a 10% increase.

David Peacock, Head of Visa Consulting & Analytics for Visa Oceania, linked the shift to earlier buying patterns and broader economic conditions.

"Sales continue to have a material impact on how Australians shop for Christmas, incentivising earlier gift purchases. There has also been a general increase in the growth of retail spend in Australia, with resilient employment supporting higher-than-expected spending," said David Peacock, Head of Visa Consulting & Analytics for Visa Oceania, Visa.

Almost 58% of total spending still took place in stores. Online sales grew 15%, which outpaced the overall market and underlined the continued shift towards digital channels for peak-season purchases.

Wayne Best, chief economist at Visa, said retailers had maintained consistent shopping experiences across channels.

"Whether shoppers were upgrading their tech, refreshing their closets, or stocking up at one‐stop shops, retailers delivered seamless shopping experiences both in stores and online," said Best.

Best said the latest season marked a change in how consumers use technology when browsing and buying.

"This season also marked a turning point, with artificial intelligence shaping how people discover products, compare prices, and interact with offers. This led to a more informed, more intentional consumer, ensuring they could stretch their discretionary spending," said Best.

Digital habits

Visa's survey-based Global Spending Shift research shows AI has begun to feature in mainstream shopping behaviour. Almost half of Australians, 47%, reported using AI tools this year for gift ideas, research or planning.

Consumers are also adopting new payment methods and authentication tools. Four in five shoppers, 80%, expressed a preference for frictionless checkout experiences. Nearly half, 47%, already use biometric authentication such as fingerprints or facial recognition to verify payments.

The data suggests that the typical Australian holiday shopper now uses a blend of in-store visits, online browsing and AI-driven recommendations. Shoppers prioritise speed at checkout and expect consistent payment processes across channels.

Global buyers

Australians remain among the most active cross-border online shoppers worldwide. Visa's research found that 71% of Australian consumers buy from overseas retailers. That compares with a global average of 59%.

Respondents cited value and product choice as key reasons for buying from international platforms. They also shop internationally to maintain connections with family and friends who live abroad.

The combination of strong domestic spending growth and high cross-border participation points to a shopper base that compares offers globally but continues to spend steadily at home.

Security concerns

Alongside the expansion of digital shopping and international purchases, concerns about fraud have intensified. Over three quarters of Australians, 76%, said they worry about more sophisticated scams during peak shopping months.

Shoppers also voiced unease about how their personal information is managed as AI and digital tools become more common in the buying process. Visa reported that 65% of respondents remain concerned about data use.

The findings place trust and transparency at the centre of the holiday shopping experience. Retailers and payment providers face pressure to match demand for fast, low-friction checkouts with visible security measures and clear data practices.

Expectations on trust

Australians' use of tap-and-go and mobile payments has become firmly established in everyday spending. This has raised expectations for consistent security across in-store terminals, apps and international platforms during the busy end-of-year period.

Alan Machet, Visa's Group Country Manager for Oceania, said local shoppers have developed firm views on how payments should work in the festive season.

"Simple, smart and safe - that's what Australians expect from holiday spending. From tapping a phone in store to shopping in global marketplaces, people want confidence that every payment is secure. That trust is what keeps everyday spending moving," said Machet.