7 retail trends to watch this year from NRF 2025: Retail’s Big Show

From AI innovations to the rise of Gen Zalpha as consumer, this year’s NRF Big Show 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’s next. 

1. AI makes retail more human—not less 

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 “workforce” now includes both humans and their AI companions.

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—all 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.  

“Can you repeat that, please?” The MediaMarktSaturn’s MyBuddy voice-navigated in-ear AI agent enables store associates to “shop” 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.

AI Is Already Changing Work—Microsoft Included gets at the heart of the changes brought about by AI. “The 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.”

2. The frontline is first in line with AI 

The frontline is first in line with AI. It’s 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, “The register is slow. What should I do?”  

Curious about the hottest topics store associates are buzzing about? Swedish retailer Lindex designed Lindex Copilot 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 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.

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. 

3. Gen Zalpha defines the post-omnichannel world 

Gen Zalpha defines the post-omnichannel world, where authenticity, discernment, and relatability rule. Zalphas—a portmanteau of Gen Z and Alpha—use social commerce, participate in live commerce, and watch influencers via video storytelling to engage with products, brands, and creators.  

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—in 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—the 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.  

“Do I need winter or all-season tires?” Recognizing that up to 80% of tire purchases start with a visit to a retailer’s website with customers searching for tires, Canadian Tire’s 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).

“What backpack should I get for my kindergartener?” Customers using the voice ordering and text-to-shop features in the Walmart app can now interact with human-like responses as they search for items, place orders, and schedule pickups or deliveries.   

“What kind of pruning shears do I need for my climbing roses?” Gardens Alive 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.

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—also known as “show me the money.” 

4. The physical store is back 

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’s values through new experiences.¹  

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!

In addition, retailers are launching store tech innovations like virtual try-ons, digital shelves, and mobile checkout (25% of one beauty retailer’s 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.  

5. Improving supply chain resilience 

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. Pre-orders and just-in-time production—selling inventory before it physically exists—fundamentally rebalances inventory risk. SPAR Austria Group is using AI-enabled demand forecasting system that achieves 90 percent inventory prediction accuracy. 

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.

Leading Australian retailer Coles is expanding its world-leading edge computing platform to connect and manage IoT devices across Coles’ supply chain and into stores to advance Coles’ sustainability goals, improve customer experiences, reduce stock loss, and boost team member productivity and safety. British fast-fashion retailer ASOS 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.

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.  

6. Sustainability, ethical retailing, and circular economy 

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.  

A consumer goods company aligns sustainability with profitability by tracking environmental impacts across its product lifecycle assessing environmental footprints while streamlining operations.

Can we save more than 250,000 kilos of food from going to waste? Grocer Albert Heijn 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.

7. Customer psychographics drive true personalization 

Customer psychographics drive true personalization, whether it’s translating foot traffic data into a full snapshot of the customer journey or driving conversion in a post-cookies world.  

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’s desire for authenticity and connection.

“What shoes do I want for the holidays?” Saucony 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 Estée Lauder Companies’ 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. 

Brands need to get personal in a meaningful way. Life shouldn’t be about shopping. Shopping should be about life.

Better shopping experiences through human–technology partnerships 

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—both customers and employees—and the tech that makes those connections meaningful. Here’s to a future where technology and humanity work hand in hand to make the shopping experience better than ever.

Learn more

• The AI Advantage: How retailers are shaping customer experiences with data-driven insights
• Microsoft Cloud for Retail

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¹ MIT Sloan School of Management, 2024.

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Source: Microsoft Industry Blog