{"id":3248,"date":"2025-03-12T12:00:00","date_gmt":"2025-03-12T19:00:00","guid":{"rendered":""},"modified":"2026-04-09T08:59:55","modified_gmt":"2026-04-09T15:59:55","slug":"7-retail-trends-to-watch-this-year-from-nrf-2025-retails-big-show","status":"publish","type":"ms-industry","link":"https:\/\/cm-edgetun.pages.dev\/en-us\/microsoft-cloud\/blog\/retail-and-consumer-goods\/2025\/03\/12\/7-retail-trends-to-watch-this-year-from-nrf-2025-retails-big-show\/","title":{"rendered":"7 retail trends to watch this year from NRF 2025: Retail’s Big Show"},"content":{"rendered":"\n

From AI innovations to the rise of Gen Zalpha as consumer, this year\u2019s NRF Big Show<\/a> brought forward fresh perspectives on how technology and human interaction are coming together to redefine the industry. Whether you’re following trends or just interested in how the retail landscape is shifting, these highlights will give you a glimpse into what\u2019s next. <\/p>\n\n\n\n

\n
View agents in Copilot Studio<\/a><\/div>\n<\/div>\n\n\n\n

1. AI makes retail more human\u2014not less <\/h2>\n\n\n\n

AI makes retail more human not less, creating engagement that delights consumers and empowers employees to solve problems, and deliver memorable customer experiences. At NRF, it truly hit home that \u201cworkforce\u201d now includes both humans and their AI companions.<\/p>\n\n\n\n

We learned how a beauty and wellness consumer goods brand uses digital twin assets to spin up a targeted lipstick Instagram campaign in minutes, then test and launch it\u2014all of which would have taken days previously. In another presentation, we saw how a fashion retailer connects physical with digital, using ambient intelligence, in-store RFID signals, and AI to help associates locate garments and make recommendations for customers.  <\/p>\n\n\n\n

\u201cCan you repeat that, please?\u201d The MediaMarktSaturn\u2019s MyBuddy<\/a> voice-navigated in-ear AI agent enables store associates to \u201cshop\u201d the store catalog for the best products and services while in the middle of customer conversation. This solution not only boosts customer satisfaction, it also helps associates make the most of conversion opportunities at the point of sale while delighting consumers. Do you want the expertise of a seasoned employee in minutes? Associates at Nordic retailer Kappahl can now use Store Operations Agent to gain access to product information, store policies, and procedures in mere seconds.<\/p>\n\n\n\n

AI Is Already Changing Work\u2014Microsoft Included<\/a> gets at the heart of the changes brought about by AI. \u201cThe key to getting a real return on your AI investment is a human-centered approach, enabling individuals to leverage these tools in service to their work.\u201d<\/p>\n\n\n\n

2. The frontline is first in line with AI <\/h2>\n\n\n\n
\n\t
\n\t\t

\n\t\t\tRetail Ready: Microsoft announcements from NRF\t\t<\/h2>\n\t\t

\n\t\t\t\t\t\t\t\n\t\t\t\t\t\tLearn more\t\t\t\t\t\t\t\u2197<\/a>\n\t\t\t\t\t<\/p>\n\t<\/div>\n<\/div>\n\n\n\n

The frontline is first in line with AI. It\u2019s very exciting to see how technology empowers people on the frontlines of retail, allowing them to thrive, grow, and be the best brand ambassadors to customers. At NRF 2025, we heard how a grocer employs generative AI to aid in training its 275,000 frontline associates while another automates responses to common customer inquiries and translates training materials to make its top employees available for more complex customer inquiries. A fashion retailer provides their employees with their app, which addresses queries like, \u201cThe register is slow. What should I do?\u201d  <\/p>\n\n\n\n

Curious about the hottest topics store associates are buzzing about? Swedish retailer Lindex designed Lindex Copilot<\/a> to not only provide tailored guidance and support to store associates but also to learn and understand better what stores need. Generative AI is great for creating a bidirectional learning highway. Got a sweet tooth? Store associates at gourmet chocolatier Venchi<\/a> are empowered by both hyper detail about the product and customer insights to meet the varied chocolate needs of shoppers, achieving customer satisfaction of 4.9 out of 5.<\/p>\n\n\n\n

The best part is that savings achieved using AI can be reinvested to create a better employee experience, fostering a work environment where employees are enthusiastic ambassadors of the brand, bringing life to the store and to the customers who walk in every single day. <\/p>\n\n\n\n

3. Gen Zalpha defines the post-omnichannel world <\/h2>\n\n\n\n

Gen Zalpha defines the post-omnichannel world, where authenticity, discernment, and relatability rule. Zalphas\u2014a portmanteau of Gen Z and Alpha\u2014use social commerce, participate in live commerce, and watch influencers via video storytelling to engage with products, brands, and creators.  <\/p>\n\n\n\n

Gamified experiences and blended digital and physical worlds are critical for these consumers. Virtual shopping through gaming platforms blends digital and physical realms. You can find Zalphas creating avatars for themselves and taking their avatars shopping, buying virtual t-shirts for $13, and acquiring virtual manicured nails\u2014in the way that everyday gamers make in-store purchases of speedier cars or accessories intended for game play. One retailer launched its real-life apparel line based on the popularity of the digital apparel collection they had created for avatar shoppers\u2014the clothes were virtual-first. The opportunities for collaboration with technology companies, influencers, and communities are endless, as is the opportunity between virtual and real worlds.  <\/p>\n\n\n\n

\u201cDo I need winter or all-season tires?\u201d Recognizing that up to 80% of tire purchases start with a visit to a retailer\u2019s website with customers searching for tires, Canadian Tire<\/a>\u2019s conversational commerce helps them identify the right tires early on, growing conversion and brand loyalty. A beauty retailer shared at NRF how customers that order online and pick up in store drive the highest average order value (AOV).<\/p>\n\n\n\n

\u201cWhat backpack should I get for my kindergartener?\u201d Customers using the voice ordering and text-to-shop features in the Walmart<\/a> app can now interact with human-like responses as they search for items, place orders, and schedule pickups or deliveries.   <\/p>\n\n\n\n

\u201cWhat kind of pruning shears do I need for my climbing roses?\u201d Gardens Alive<\/a><\/a><\/a> is transforming customer service, enabling unique customer experiences by answering inquiries, tailoring recommendations, and creating seamless self- and assisted-service experiences that win customer loyalty while simplifying operations.<\/p>\n\n\n\n

Retailers are working to improve how they track and connect online and offline sales to identify insights, find directly profitable use cases for AI, and reestablish attribution metrics to fully capture this interconnected online and offline relationship\u2014also known as \u201cshow me the money.\u201d <\/p>\n\n\n\n

\n\t
\n\t\t

\n\t\t\tOptimize Shopper Experiences with a stong data estate\t\t<\/h2>\n\t\t

\n\t\t\t\t\t\t\t\n\t\t\t\t\t\tGet the e-book\t\t\t\t\t\t\t\u2197<\/a>\n\t\t\t\t\t<\/p>\n\t<\/div>\n<\/div>\n\n\n\n

4. The physical store is back <\/h2>\n\n\n\n

The physical store is back, enchanting customers with memorable experiences aligned with their purpose. With stores still driving over 80% of sales, retailers are finding new ways to ensure the store expresses their brand\u2019s values through new experiences.1<\/sup>  <\/p>\n\n\n\n

An outdoor retailer offers jacket repairs to emphasize the timelessness and durability of their products, a jeans shop creates the perfect fit with an in-store tailor, a toy store hosts in-store magic shows, a sports retailer debuts a community-style trying area to capitalize on the community built around sneaker culture, and a pet retailer offers self-service dog wash stations. Each of these experiences require, you know it, humans! <\/p>\n\n\n\n

In addition, retailers are launching store tech innovations like virtual try-ons, digital shelves, and mobile checkout (25% of one beauty retailer\u2019s sales). A big box retailer has built 1,700 digital twin models of store layouts. Why? To track in-store customer experiences, buying patterns, and preferences. All to optimize conversion. Do the hammers belong on the top shelf or middle shelf? Do we need eight colors of swimsuits or 12? This year at NRF, we saw an AI digital display interface that sits on top of a real-world shopping cart, displaying promotions and recommendations based on what the customer places in their basket.  <\/p>\n\n\n\n

\n\t\n
\n\t
\n\t\t
\n\t\t\t
\n\t\t\t\t

The AI Advantage<\/h2>

Retail thought leadership study<\/p>

Get the report<\/a><\/div><\/div>\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t
\n\t\t\t\t
\n\t\t\t\t\t\t\t\t\t\t\t\"\"\n\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t\t<\/div>\n<\/div>\n<\/div>\n\n\n\n

5. Improving supply chain resilience <\/h2>\n\n\n\n

Improving supply chain resilience continues to be in the spotlight. Supply chain discussions centered on using technology to optimize inventory, grow resilience, and decrease the risk and cost of disruptions<\/a>. Pre-orders and just-in-time production\u2014selling inventory before it physically exists\u2014fundamentally rebalances inventory risk. SPAR Austria Group<\/a> is using AI-enabled demand forecasting system that achieves 90 percent inventory prediction accuracy. <\/p>\n\n\n\n

Direct-to-consumer models reduce the risk of over-production, mis-forecasting, and physical risks to in-warehouse inventory (fire, flood, theft). By creating digital twins of a distribution center with different layouts and different behavior tracking, brands can pick, pack and ship products smarter and faster. One big box store uses digital twins of their warehouses to model efficiency changes to routing inside the warehouse. If an incident occurs, this approach allows automatic rerouting of warehouse robots to maintain flow and operations.<\/p>\n\n\n\n

Leading Australian retailer Coles<\/a> is expanding its world-leading edge computing platform to connect and manage IoT devices across Coles\u2019 supply chain and into stores to advance Coles\u2019 sustainability goals, improve customer experiences, reduce stock loss, and boost team member productivity and safety. British fast-fashion retailer ASOS<\/a> uses AI to pull and embed knowledge of trends as they surface, enabling them to pick, curate, and share the right items at the right time with shoppers.<\/p>\n\n\n\n

Geopolitical discussions are centered on onshoring manufacturing and sourcing for strategic categories. Producers have been making things wherever it was more efficient, and rebalancing supply chains and manufacturing takes time.  <\/p>\n\n\n\n

6. Sustainability, ethical retailing, and circular economy <\/h2>\n\n\n\n

Sustainability, ethical retailing, and circular economy remain top of mind as retailers are under pressure to meet 2030 sustainability targets and respond to rising consumer demand for responsible practices. For example, recycling expired products into biofuel and livestock feed. Brands are placing more emphasis on eliminating food waste, traceability, eco-friendly products and packaging, circular supply chain, overall waste reduction, renewable resources, and take-back or resale programs.  <\/p>\n\n\n\n

A consumer goods company aligns sustainability with profitability by tracking environmental impacts across its product lifecycle assessing environmental footprints while streamlining operations.<\/p>\n\n\n\n

Can we save more than 250,000 kilos of food from going to waste? Grocer Albert Heijn<\/a> is using generative AI tools to help food arrive with maximum freshness, dynamically discounting prices to encourage shoppers to buy before that food is no longer fresh.<\/p>\n\n\n\n

7. Customer psychographics drive true personalization <\/h2>\n\n\n\n

Customer psychographics drive true personalization, whether it\u2019s translating foot traffic data into a full snapshot of the customer journey or driving conversion in a post-cookies world.  <\/p>\n\n\n\n

One of the biggest opportunities brands have is to use technology to understand their customers at their core: what makes them tick, what makes them buy, what causes them not to buy. The customer is smart, and authenticity is key to personalization. I love how a sports retail startup designs running clothes for runners, by runners, tapping into the community and speaking directly to Gen Zalpha\u2019s desire for authenticity and connection.<\/p>\n\n\n\n

\u201cWhat shoes do I want for the holidays?\u201d Saucony<\/a> optimized customer acquisition during Black Friday and Cyber Monday via a custom AI model developed in partnership with Yobi, leading to a strong surge in new customers in just a matter of weeks. Are active women looking for waterproof mascara or color-correcting powder? The Est\u00e9e Lauder Companies\u2019<\/a> AI-powered custom agent connects and streamlines information for marketers, helping turn insights into action based on data that spans its 25 brands and hundreds of regions. <\/p>\n\n\n\n

Brands need to get personal in a meaningful way. Life shouldn\u2019t be about shopping. Shopping should be about life.<\/a><\/p>\n\n\n\n

\n
Microsoft at NRF 2025: The value customers are receiving from AI<\/a><\/div>\n<\/div>\n\n\n\n

Better shopping experiences through human\u2013technology partnerships <\/h2>\n\n\n\n

From AI to sustainability, NRF 2025 was a whirlwind of innovation and insight. As we move forward, the key takeaway is clear: retail is about people\u2014both customers and employees\u2014and the tech that makes those connections meaningful. Here\u2019s to a future where technology and humanity work hand in hand to make the shopping experience better than ever.<\/p>\n\n\n\n

Learn more<\/h2>\n\n\n\n