Retail Media Trends to Watch in 2025

2024 Retail Trends & Holiday Outlook

ai in retail trends

As RAG technology advances, it is poised to transform sectors such as customer service, content creation, and research. AI’s rapid evolution and potential to shape the future are quickly revolutionizing various industries across the globe. Delivering a seamless omnichannel shopping experience online presents many of the same difficulties as delivering one in person. Customers have elevated expectations of the service that retailers provide, and successful companies can meet those expectations with innovative technology. As AI handles routine tasks, retail workers are evolving into experience orchestrators armed with digital tools and data insights.

Predictive analytics, considering factors like weather, local events, and social media trends, allows AI to forecast consumer demand with unprecedented accuracy, reducing waste and out-of-stock. 77% of grocery retail executives expect AI to help with real-time, high-accuracy inventory tracking within five to 10 years. Augmented reality improves the grocery shopping experience in many ways, like guiding shoppers to products using virtual store maps and aisle markers, or displaying nutrition facts and reviews when customers scan a product. When you offer an omnichannel retail experience, grocery buyers enjoy a unified and consistent interaction with your brand across platforms and touchpoints, from social media and apps to physical stores. Still, P&G faces many of the same challenges that other brands (as well as retailers) face, namely around on-shelf availability.

ai in retail trends

The rise of smart shipping and data-driven logistics is optimizing the delivery process, reducing costs and enhancing efficiency. Sustainability is becoming a critical factor for consumers, who are increasingly demanding eco-friendly options and sustainable practices from retailers. Starting with small, impactful use cases allows businesses to manage the scope and complexity of AI projects. These narrow applications provide quick wins that can build momentum and support for further AI initiatives. Focusing on use cases that align with corporate strategy and leverage existing data assets ensures these initiatives are both impactful and achievable.

retail industry predictions for 2024

Retailers have long struggled with accurately predicting demand due to causal and event-driven factors. But Generative AI can augment traditional models, which typically rely on large volumes of historical sales data, by incorporating a variety of other factors, including weather, holidays, and social media trends, into its analysis. The ability of Generative AI to draw patterns from vast amounts of unstructured data could be an asset in not just better predictions but also helping ChatGPT enterprises adopt more dynamic pricing strategies. In short, Generative AI offers a powerful boost to understand and meet consumer demand. According to a Google Cloud survey, around 72 per cent of retail decision-makers are ready to implement GenAI technologies in 2024. With Generative AI, retailers can move beyond traditional data analysis, tapping into vast amounts of unstructured data—from social media interactions and online customer reviews to in-store video analytics.

Around 64% of retail merchants plan on joining an RMN this year, and projections show that grocers could boost their revenues by 13% through retail media activities in 2024. Consumers make decisions about supermarket chains based on price, features, and convenience, with private brands (also called store brands) leading the charge after their record success in 2023. In February 2024, 70% of consumers named food prices a top concern, according to the Food Industry Association. Though lower than its peak, weekly grocery spending in the US remains well above pre-pandemic levels. Tesco uses a combination of traditional stores, dark stores, and automated micro-fulfillment centers to support both online and offline shopping.

As the metaverse remains a virtual universe connecting users beyond physical boundaries, retailers should anticipate a resurgence of interest. Retailers need to capitalise on this trend by improving in-store experiences and educating consumers about circularity. As Generation Alpha takes the reins, retailers must innovate to meet their preferences for tech-focused experiences. The rise of deepfake technology poses a significant threat to retailers, with the potential to damage brand reputations rapidly. AI technologies, particularly generative AI, are becoming integral to the retail sector. Market research company IDC ranks retail as the second-highest industry globally in AI spending.

RAG boosts the performance of AI models by enabling them to access and generate information from extensive external datasets, resulting in more accurate and contextually relevant outputs. Organizations that fail to implement AI in businesses are more vulnerable to cyberthreats and suffer a higher rate of data breaches. By proactively leveraging AI, they can significantly enhance their defense mechanisms against the ever-evolving landscape of cyber threats, ensuring their data remains secure and their operations uninterrupted.

The Deloitte Consumer Tracker

Virtual try-on technology allows customers to visualize how clothing items will look on them before making a purchase, and AI-powered inventory tools can help retailers predict future fashion trends. Generative AI prominently emerged in several of the top AI use cases for retail. As such, it’s crucial to stay ahead of the curve by anticipating potential trends that aim to change the retail game. Forward-thinking retailers are using AI-powered solutions to enable profitable growth.

The company demonstrates the value of its products and provides experiential shopping moments by offering “Cold Rooms” in its stores, which provide a cold environment for shoppers to properly test coats before purchasing. Building on the strength of its coats, Canada Goods is now branching into other categories, such as footwear and knitwear, and offering lower-priced, entry-point items, such as belt bags. Various speakers at Shoptalk 2024 discussed how physical stores remain the essential center of gravity in the retail space, anchoring the shopping experience.

The study predicted a similar performance for 2024 with a 2.4x growth in sales and 2.6x growth in profits compared to retailers that are not using AI/ML. Check out NRF’s Center for Digital Risk & Innovation to learn more about issues related to cybersecurity, fraud prevention and artificial intelligence in the retail industry. The more companies invest in educating shoppers about circularity, the likelihood of them embracing it will increase exponentially. Members of this generation lean hard into experiences, preferring to frequent shops where they can tinker with tech or be hands-on with a new gadget. But they’re less inclined to crave physical ownership; downloading something digitally — a book, a game, a movie — meshes with both their digital proficiency and proclivity for a more sustainable culture. They are quick to call out higher grocery bills and loftier rents; buying a car or a house are pieces of the American dream that remain out of reach for many.

AI In Retail: Three Trends To Watch

It’s already being used for demand forecasting and customer sentiment analysis. This annual predictions process — collecting tons of information from various sources to arrive at projections for how the retail industry is likely to fare in the year ahead — could be upended if artificial intelligence keeps improving. But content marketers, SEO professionals, and publishers should stay vigilant over what happens to traffic as AI summarization becomes more popular and consumers have less need to click through to websites. All in all, to succeed in 2022 and beyond, businesses need to carefully follow the latest retail trends and cultural evolutions, learn which technologies to apply and how to do it the right way. Consumers will expect contactless payments and a frictionless shopping experience, which will be followed by a rising number of companies using technologies such as grab-and-go.

ai in retail trends

Instead of looking for correlations and patterns, when causal AI analyzes data, it looks for clear evidence of causality. Using the example above, the retailer could uncover exactly which customers buy their shoes because they are dedicated runners, not because they are general fitness enthusiasts. Understanding the correlation allowed them to adjust their strategy to focus on the running community only. By drilling down to individual motivations within that group, the retailer could build targeted ads identifying marathon runners versus sprinters and treadmill runners versus trail.

AI enables organizations to have 24/7 surveillance support on their infrastructure. A prominent use case of AI-powered surveillance can be seen in the Japanese machine learning algorithm, AI Guardman, which detects suspicious behavior of shoppers and alerts the store owner instantly, even in crowded places. Enterprises can capitalize on multi-modal AI to build intelligent systems that analyze diverse data streams, improving natural language understanding, visual perception, and voice recognition for enhanced user experiences. For instance, Google DeepMind is in the news with Gato, a multi-modal AI system that performs language, visual, and robotic movement tasks. The low-code & no-code AI trend in website and app development allows businesses to customize these intelligent systems via drag-and-drop methods and pre-built templates. By leveraging this trend, organizations can automate repetitive and rule-based tasks.

ai in retail trends

As the number of channels and technologies continues to evolve, Shoptalk plans to evolve alongside them; for instance, it plans to offer an entire track focused on RMNs during Shoptalk Spring 2025. This allows retailers to create eye-catching images or videos for a brand’s marketing and advertising campaign using only a few lines of text prompts. Or they can be used to deliver  personalized shopping experiences with in-situ and try-on product image results. Yet another use case is in product description generation, where generative AI can intelligently generate detailed e-commerce product descriptions that include product attributes, using meta-tags to greatly improve SEO.

Machine learning algorithms analyze customer data to offer tailored product suggestions, anticipate needs, and provide personalized promotions. His areas of focus include cybersecurity, IT issues, privacy, e-commerce, social media, artificial intelligence, big data and consumer electronics. He has written and edited for numerous publications, including the Boston Business Journal, the Boston Phoenix, Megapixel.Net and Government Security News. Kassi Socha, a consumer and culture analyst with Gartner, a research and advisory company based in Stamford, Conn., also warned brands against deploying gimmicky AI-powered tools.

With brand loyalty in a free-fall, shoppers are quickly turning to competitors when brands can’t reliably provide the inventory they crave. Dell Technologies is building a catalog of select partners who deliver the individual functions discussed here in an easy-to-install fashion on our NativeEdge platform. Additionally, our catalog also includes partners such as EPIC iO that specialize in stitching together data from multiple sources for AI and analysis using their EPIC iO DeepInsights platform. Running DeepInsights on the Dell NativeEdge devices allows you to seamlessly integrate, process, and analyze data from an expansive variety of assets and systems on a single platform for enhanced control and oversight.

Nearly 65% of consumers have purchased a private label product within the past six months. Facebook’s 2024 social commerce revenue is predicted to hit $56.8 billion and Instagram’s social commerce revenue could top $37 billion. And the amount these individuals are spending on social media continues to increase. Company officials said they delivered for just a few dozen retailers three years ago, but they’ve now become a delivery provider for hundreds of retailers. More than 70% of retailers that have adopted AI already say they’ve seen a decrease in operating costs. These AI-powered recommendation engines analyze a consumer’s previous behaviors, purchases, and search queries in order to specifically highlight products the consumer is most likely to buy.

Another one includes introducing new business models such as the circular economy. As a growing number of consumers buy into the idea of recycling, reusing, repairing, renting, and reducing, companies will need to match their new habits to stay relevant. Due to a (mis)belief that zero interface retail is a channel strategy instead of an experience enabler, retailers have been a little apprehensive about introducing this approach. Nevertheless, the need for conversational user interfaces (CUIs) will continue to grow, as will the market demands. Another major retail trend for 2022 is a broader introduction of zero interface design. While the pandemic has accelerated the digital transformation in retail, the need for changes was there much earlier.

“Automation could reduce the best-positioned retailers’ unit costs by as much as 20% over time, translating into margin expansion of 50 to 100 basis points,” says Gutman. In a bid to cut operational costs and boost profitability, retailers could use automation to bring efficiency to up to 70% of routine tasks by 2025. Onsite advertising places the advertiser’s products prominently on the retailer’s website or search results page, while offsite advertising displays ads across the wider internet.

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On the other hand, together, two technologies, RFID—which offers item identification and inventory visibility—and computer vision, can create frictionless, checkout-free stores, enhancing the shopping experience. Coresight Research is a research partner of Shoptalk 2024, which took place March 17–20 in Las Vegas, Nevada, US. Shoptalk is an annual retail conference focusing on the trends, business models, and technologies shaping the future of retail.

By staying ahead of these trends and implementing best practices, businesses can create exceptional shopping experiences, drive growth and maintain a competitive edge. The retail landscape in the second half of 2024 will be shaped by technological advancements and changing consumer expectations. Retailers that embrace these trends and invest in the necessary technologies will be well-positioned to thrive. From omnichannel experiences and AI-driven personalization to social commerce and sustainability, the future of retail promises to be exciting and full of opportunities.

For years companies and users have been looking for ways to make human-machine interaction more personal, and now the time to make it happen has come. Still one of the most significant pain points of the retail-customer experience, payment systems will have to incorporate the ability to pay from anywhere, with the customer in control of the payment channel. Machine customers are AI-driven entities that autonomously make transactions for consumers. For example, a smart refrigerator can order groceries, a home assistant can stock up on house supplies, and a smart printer can reorder ink when toner is low—all without any human consumer intervention.

Imagine attempting to allocate inventory across a region of stores without adequate sales or customer data, or only having data through 2022. Now, imagine a similar dilemma when trying to devise an updated clearance pricing strategy. ai in retail trends Envision receiving insightful analysis from a colleague, but when questioning the specifics, the underlying reasoning can’t be revealed. AI technology is also a win in terms of boosting shopper and customer engagement.

Leading retailers are bringing their media networks into physical stores, transforming them into touchpoints for digital engagement. Using technologies like digital shelf displays, interactive kiosks, and smart shopping carts, retailers are extending the capabilities of their media networks to reach consumers at every stage of their shopping journey. It could provide data for advertising, a main driver of growth in take-up rates and profitability for online grocery platforms. Analysts estimate that every percentage-point increase in advertising as a proportion of online grocery spending in 2025 would add an incremental $2.8 billion to revenue. All told, the best exposed retailers could save between 5% and 10% of corporate costs with AI, yielding up to 25 basis points of margin expansion over time. Retail media is a type of advertising that uses retailers’ unique customer data sets to create targeted ad campaigns.

ai in retail trends

It leverages machine learning trained on multiple modalities, such as speech, images, video, audio, text, and traditional numerical data sets. As we step into 2025, artificial intelligence and digital innovation are revolutionizing the retail … [+] landscape in unprecedented ways, from hyper-personalized shopping experiences to sustainable second-hand luxury. Despite the rise in digital shopping, 30% of respondents say physical stores have the biggest revenue growth opportunity (ranked second behind ecommerce) and remain the channel with the most AI use cases for retailers. Given the emphasis on intelligent stores and their central role in the omnichannel experience, use cases such as store analytics and loss prevention will continue to be critical investments.

Why Edge Computing Is Reemerging Around AI Capabilities

Artificial intelligence and machine learning capabilities will help brands achieve this with excellence and consistency. One common shoplifting tactic, referred to as the ‘Switcheroo,’ is to place an expensive item, such as steak or seafood, on the scale but enter the price look-up (PLU) code for a banana instead. Computer vision AI can visually match the code with the item on the scale and prompt the user to re-enter the code or notify staff to assist. Even better still, AI can simply detect and automatically select the item at the point of sale (POS), eliminating the opportunity all altogether, while also speeding up the checkout flow. Additionally, Digital Twins are gaining prominence for simulating real-world objects digitally, reflecting the diverse applications transforming industries globally.

Now, advances in retail media, artificial intelligence and automation are bringing further disruption to the retail sector, helping the largest players consolidate their positions through higher profitability, faster growth or both. The fall is here, and along with football-themed promotions and the insertion of pumpkin spice flavor and aroma into virtually every product, it marks the arrival of retail technology trends worth keeping an eye on. These insights provide a roadmap for retailers aiming to lead the future of retail through innovative AI solutions. The notable aspect of this trend is that you need both high-quality data and an integrated ecosystem. If the AI can only access limited information, and not perform any actions, it will be far less useful to customers, and they will do everything they can to bypass it. Instead, make sure the bot has access to order information, case details, customer preferences, and more so it can understand the customer.

By feeding real-time RFID data into GenAI models, retailers can finally implement smart changing rooms that simultaneously increase conversion ratios and improve customers’ shopping experience. GenAI-powered recommendation engines can suggest accessories and coordinating pieces in real time. When it comes to leveraging the top artificial intelligence trends, businesses often rely on predictive analytics to make informed decisions. It is one of the most impactful and emerging trends in artificial intelligence, helping businesses optimize inventory, improve delivery times, reduce operation costs, and ultimately increase sales and revenues.

  • Learn the multifaceted ways AI is poised to reshape the retail supply chain through insights into its transformative potential with actual use cases that apply to U.S. retailers.
  • As we look to the future, the continuous evolution of AI technologies promises even greater innovations and opportunities.
  • Choosing the right AI partner with relevant expertise and a proven track record can accelerate innovation and provide a competitive advantage.
  • We can expect to see a true e-commerce revolution unfold on Western social media in 2021 and beyond.
  • Over four dynamic days, the show revealed the cutting-edge trends redefining marketing’s future, from the unstoppable rise of AI and retail media to the creative strategies driving success in an evolving, social-first landscape.
  • Social commerce is the clear leader in China, making up more than 46% of all ecommerce in the country.

Discover the most impactful artificial intelligence (AI) statistics that highlight the growth and influence of artificial intelligence, such as chatbots on various industries, the economy and the workforce. Whether it’s market-size projections or productivity enhancements, these statistics provide a comprehensive understanding of AI’s rapid evolution and potential to shape the future. Learn about the AI trends that will determine the state of technology, business and society in the upcoming years. Based on my experience, I recommend starting with a clear strategy for integrating new technologies, ensuring robust data security measures and seeking customer feedback to refine and enhance the shopping experience.

Even global cosmetics conglomerate Estee Lauder is getting in on the action via a recently launched initiative with Microsoft to create an AI Innovation Lab to develop solutions for Estee Lauder’s more than 20 beauty brands. Notably, Apple recently unveiled a proprietary AI system called Apple Intelligence that the company is positioning as focused on the needs of individual users. Apple said the new platform combines generative AI with “personal context” to deliver “useful and relevant” capabilities, using on-device processing. Retailers can use AI to offer customers the level of service they’re looking for. Lastly, with the ready-to-use AR kits from Google and iOS, the technology is more accessible than ever.

However, Keri McGhee, CMO of Attentive, a global customer relations management company, pointed out that over the last few years holiday shopping has started earlier and earlier. You can foun additiona information about ai customer service and artificial intelligence and NLP. If you’re looking for a platform that can help you build your grocery retail store with all the necessary features and apps needed to succeed in today’s times, Shopify is an ChatGPT App excellent option. Staying ahead of the curve is possible when you keep up with the grocery retail trends we discussed. Social media transparency is also driving consumer awareness of ingredient quality, sparking a trend toward products with high-quality ingredients like whole milk dairy products, natural sweeteners, and responsibly sourced meats.

7 retail industry predictions for 2024 – NRF News

7 retail industry predictions for 2024.

Posted: Wed, 03 Jan 2024 08:00:00 GMT [source]

When customers feel they are being treated as individuals, they may feel a sense of loyalty to a brand. Over four dynamic days, the show revealed the cutting-edge trends redefining marketing’s future, from the unstoppable rise of AI and retail media to the creative strategies driving success in an evolving, social-first landscape. In the end, regardless of whether consumers decide to shop in-store or online, one thing remains unchanged – retailers need to provide the absolute best shopping experience.

WGSN Launches AI-Driven Platform for Buyers – The Business of Fashion

WGSN Launches AI-Driven Platform for Buyers.

Posted: Mon, 05 Aug 2024 07:00:00 GMT [source]

IDC forecasts the AR/VR market to rebound in 2024, growing 46.8% year over year thanks to all the new hardware. There has been a massive rise in the use of deepfake fraud over the last year and the next 12 months are shaping up to be even more alarming. Thanks to advances in AI, deepfake videos and voice dupes have become alarmingly simple to produce and thus have the potential to unravel decades of brand reputational excellence overnight. Integrating ethical analysis into design and deployment phases, mitigating biases, promoting transparency and ensuring organizational readiness are vital for responsible AI adoption. If you can lay the foundation and establish the proper controls, AI can revolutionize your business.

This shift will also facilitate real-time optimization, as brands can adjust campaigns on the fly based on performance insights. The automation of retail media buying will further enable smaller brands to compete, giving them access to tools that can help level the playing field. As programmatic becomes more prevalent, retail media networks will be able to scale their offerings, increasing the number of available ad placements and targeting capabilities, thereby driving more competitive auction dynamics. Programmatic advertising has long been a staple in digital marketing, but its application within retail media services is rapidly evolving.

For this reason, over the coming years, we can expect to see it adopted by smaller retail players on the market. The concept of a circular economy is gaining traction among shoppers, reflected in the growing acceptance of used and refurbished products. This shift towards experiential shopping is evident, with flagship stores such as Crate & Barrel embracing innovative designs.

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