The retail industry’s rapid adoption of generative AI technologies will continue in 2025. Throughout 2024, many retailers moved gen AI projects from pilots into production. In 2025, retailers will scale these AI projects across the enterprise and embed the technology into core operations of their business.
Today, retailers face a complex landscape marked by rising costs, supply chain disruptions, pricing pressures and high employee turnover. At the same time, consumer expectations for personalized, omnichannel shopping experiences continue to rise. Gen AI will help retailers meet these challenges, but its success depends on adopting a strategic approach focused on enterprise-wide transformation rather than isolated, departmental implementations.
In 2025, four key trends will drive the adoption of gen AI in the retail industry:
1. Multimodal AI will unlock new insights and value.
Retailers have access to massive amounts of data, much of which is unstructured — ranging from product descriptions and images to customer reviews and in-store video feeds. However, this unstructured data often remains underutilized by current AI systems. Multimodal AI is capable of analyzing diverse data types in combination and will unlock new insights for retailers.
For example, multimodal AI can help retailers optimize inventory by analyzing sales patterns alongside supplier communications and consumer feedback. It also can enhance marketing by correlating visual trends in product images with purchasing behavior. These capabilities allow retailers to derive actionable insights from their data and drive efficiency that impacts their bottom line.
2. Intuitive search will redefine product discovery and personalization.
In 2025, intuitive search capabilities powered by gen AI will transform how customers discover products, both online and in stores. Conversational search interfaces, which mimic natural human interaction, will make it easier for customers to find exactly what they are looking for, as well as make recommendations for additional products.
For example, an online shopper could describe a product in natural language and receive highly relevant suggestions. In physical stores, AI-driven digitization of the shopping experience will guide customers via interactive kiosks or smartphone apps, seamlessly integrating online and offline channels.
Store employees also will be able to leverage intuitive search to provide customers with detailed product information to help them make informed purchasing decisions. For example, a lawn and garden store employee will be able to quickly provide recommendations for fertilizers based on the specific plants a customer has purchased. This omnichannel approach will ensure a consistent and personalized experience across all touch points.
3. AI agents will drive growth through conversational commerce.
Conversational commerce will see significant advancements in 2025, with AI agents enabling retailers to engage customers in new and meaningful ways. These agents will serve as digital brand ambassadors, capable of assisting with purchases, answering questions and even offering style or product recommendations.
In fast-paced environments like drive-thrus, conversational AI will enhance efficiency and customer satisfaction. For instance, quick service restaurants could deploy AI agents to take orders more accurately and upsell based on customer preferences. These systems not only improve service quality but also create new opportunities for revenue growth.
4. AI will enhance safety and content moderation.
Retailers will increasingly leverage AI to ensure safety and maintain brand integrity. One area of focus will be content moderation. For example, companies like Wayfair already are using AI to review product imagery, detecting inappropriate or non-compliant content before it reaches consumers. This type of proactive quality control ensures compliance and builds trust with customers.
Beyond content moderation, AI will play a crucial role in theft prevention, fraud detection and workplace safety. Retailers will use AI-powered surveillance and analytics to identify suspicious activities in real time, ensuring a safer shopping and working environment.
Data is the Key to AI Success
The adoption of generative AI at scale hinges on a retailer’s ability to harness and utilize data effectively. A robust data platform, underpinned by advanced analytics and business intelligence tools, is essential for unlocking the full potential of AI. Companies that prioritize data integration and accessibility will be better positioned to move quickly, innovate and respond to market demands.
In 2025, the winners in retail will be those that can leverage AI to create value across their entire enterprise. By focusing on scalable solutions, empowering employees with AI tools and addressing core business challenges, retailers can lead the industry into a new era of growth and innovation.