The last quarter of any sporting event is when the stakes are the highest. It’s less about making big moves and more about executing the plan, staying focused and adapting to what’s ahead. The same is true for merchants heading into the holiday season: preparation, consistency and adaptability are what make the difference.

But the difference now is that consumers are not just shopping, they’re shopping smarter. They’re comparison shopping, using AI to find the best deals and expecting convenience and flexibility at every step. This constant change in consumer demand can make merchants feel like they are in a mad dash to capture shoppers’ attention and drive conversion. And in my work with small businesses, I see success comes from preparation and insight — understanding your customers, adapting quickly and competing confidently.

At PayPal, we commissioned a survey to understand how U.S. consumers are approaching the 2025 holiday season. The message was clear: They want value, they want choice and they want it to be easy. Backed by data, here are three ways businesses of all sizes can stay in the game this holiday season and set themselves up for long-term growth.

Related: Americans Will Spend $979 Billion This Holiday Season — Here’s How Your Business Can Claim a Bigger Share

Enable AI to be your storefront assistant

Whether it’s chat-based shopping assistance, voice search or personalized product recommendations, consumers are letting AI guide their choices, often before they even land on your site. That’s a major shift in the customer journey, and it’s reshaping how discovery happens. While technology companies race to create standards and trusted experiences for agentic-powered commerce, merchants should remain flexible and ready to adapt.

Our data shows that 40% of Americans have used AI to assist with a purchase in the past year, and 77% of past or potential AI shoppers plan to use it this holiday season. During Cyber Week, we saw this play out in real time: Perplexity users who made holiday purchases with PayPal had an average order value of $151, underscoring that shoppers are comfortable and using AI for both browsing and buying.

There’s no doubt AI is becoming a go-to shopping tool, and to stay competitive, businesses need to ensure they’re discoverable across AI surfaces like Perplexity, OpenAI, Google and Microsoft. That means working with the right partners who take an open, interoperable approach, and keeping product content accurate, structured and optimized for AI-driven experiences. This readiness will help merchants meet consumers where they now begin their shopping journeys and convert them when they’re ready to buy.

Related: How AI-Driven Personalization Is Transforming the Retail Industry and Enhancing Customer Experiences

Drive conversion with flexibility

Affordability and budget are top of mind for holiday shoppers this year. They’re turning to options like Buy Now, Pay Later (BNPL) not only as an expectation at checkout, but as a tool to manage cash flow and help them shop with confidence.

Our research found that half of shoppers say they’ll use BNPL this holiday season. During Cyber Week, PayPal’s internal data revealed double-digit growth in BNPL transactions compared to Thanksgiving through Cyber Monday last year, with fashion and electronics emerging as the top categories. Additionally, more than half of consumers say they’re more likely to complete a purchase if BNPL is available, and the impact for businesses is significant as our data shows that PayPal merchants offering BNPL see a 62% higher average order value than those that don’t.

Flexibility isn’t just a nice-to-have. It’s a proven way to stay competitive. If you’re a small business owner, here’s your play: Make sure your flexible payment options — whether that’s pay now or over time, credit or debit — are visible throughout the shopping journey, not just at checkout. You’re not just offering flexibility, something consumers appreciate. You’re giving customers the confidence to buy what they love and a reason to come back, keeping your business top of mind and driving loyalty.

Be everywhere your customer is

There’s no such thing as a typical way of shopping anymore. Consumers browse and compare on social, buy on mobile, pick up in-store and expect rewards across every channel. This holiday season, 64% plan to shop in-store, with 41% planning to shop both online and in-store. Connection — not just convenience — will define success, and merchants that deliver seamless omnichannel experiences will stay top of mind.

This could mean syncing your in-store promotions with online deals, making your loyalty program work across channels or simply ensuring your branding feels the same whether someone finds you on Instagram or walks through your front door.

Rewards are especially powerful this season as 74% of consumers say they’re more likely to shop with merchants who offer cashback or loyalty perks. If you’re not rewarding shoppers where they are, you’re missing out on both revenue and relationships.

Building a rewards program may not be easy for every small business. Some providers offer loyalty programs that can integrate into your own platforms so that customers can still receive personalized offers when they shop with you.

Related: Don’t Wait For Customers to Find You — Here’s How to Go to Them Instead

Playing for the long game

Yes, every holiday season is critical to most merchants. But here’s the real win: Use what you learn to build a stronger business for the future.

Smart shoppers aren’t going anywhere. Neither is AI. Neither is the need for flexible payment options, personalization or connected experiences. The businesses that thrive will be the ones that adapt — not just for the holidays, but for the AI commerce revolution.

As someone who works with and supports small businesses every day, I know that getting smarter about how you sell builds loyalty, relationships and momentum that last well beyond the holiday rush.

Lean in, stay flexible and make sure you are embracing AI, connected customer journeys and smarter ways to run your business. Because when small businesses win, we all do.