Yael Kochman
February 25, 2025
In 2025, artificial intelligence (AI) is not just an emerging trend in retail – it’s a driving force behind the industry’s transformation.
A significant 80% of retailers are projected to utilize AI to enhance their operations by 2026. The financial implications are substantial. Generative AI has the potential to boost retail profitability by 20% within this year. Reflecting this trend, giants like Amazon plan to invest $100 billion in AI initiatives in 2025, underscoring the critical role of AI in maintaining a competitive edge.
As AI continues to evolve, its applications in retail are expanding, offering innovative solutions that redefine customer experiences and streamline operations. The brands that harness AI effectively will gain a significant competitive edge, while those that hesitate risk being left behind.
I asked some friends from the retail industry how they see AI in retail shaping the future this year. This is what they had to say.
AI enables retailers to analyze vast amounts of customer data, facilitating highly personalized shopping experiences. By 2026, it’s projected that 80% of retailers will utilize AI in retail to enhance business operations, with a significant focus on personalization, discussed in our Re:Tech Disrupt AI Track, too.
Nicolas Kröger, Chief Digital Officer at Manor, emphasizes the potential of AI in retail in 2025, specifically in personalization: “It’s getting easier and easier to create tonality-optimized copy and imagery, and soon, customers will expect that as the new standard.”
The adoption of robotics in retail is accelerating, aiming to streamline operations and reduce costs. Amazon, for instance, has deployed over 750,000 robots across its fulfillment centers, assisting in tasks such as storage, inventory management, and package transportation. Analysts predict that this move could save the company $10 billion annually by 2030.
Mirko Saul, Senior Vice President of Innovation at Schwarz Digital GmbH & Co, notes, “You will see much more automation, like robotics, in the stores but make sure you build it on secure and sovereign technology.”
Forward-thinking retailers are embracing MACH-based technologies (Microservices, API-first, Cloud-native SaaS, and Headless architecture) to transform monolithic legacy systems into more mobile, seamless and modular services. This shift allows for rapid innovation and adaptability in a fast-paced market. Andrew Laudato, COO at The Vitamin Shoppe, observes, “The days of the high-cost, high-risk re-platform are over for those who adopt these principles.”
In response to global uncertainties, companies are investing in AI in retail to enhance supply chain resilience. AI-driven analytics provide real-time insights, enabling proactive management of potential disruptions and optimization of logistics.
Amy Bolles, Former Head of Global Digital Strategy at Levi’s, highlights, “Supply chain resiliency will become a mission-critical investment for retail, and the most successful retailers will find ways to leverage technology and AI in retail to minimize the impact on operating margins.”
Retailers leveraging AI-powered predictive analytics can anticipate demand fluctuations, mitigate disruptions, and make real-time adjustments to sourcing and logistics, ensuring consistent product availability and optimized costs.”
In 2025, AI in retail is already bridging the gap between online convenience and in-store engagement. Technologies such as AI-powered exit gateways and scan-and-go systems are reducing wait times and streamlining the shopping process, enhancing overall customer satisfaction.
Sarah Rogowsky, VP Digital Strategy & User Experience at Lululemon, notes, “I think we’ll see the next evolution of malls and in-person shopping, with people spending more time there in a wider variety of ways.”
And then both in-store and online, AI is also transforming loyalty programs from generic reward systems to dynamic, personalized experiences. By analyzing customer behavior and preferences, retailers can offer tailored incentives that foster deeper engagement and brand loyalty.
Beyond traditional applications, AI is evolving into “agentic” systems capable of performing tasks independently, such as automating purchasing decisions for both consumers and retailers. This advancement is set to redefine retail operations and customer interactions.
Chatbots and virtual assistants, powered by advanced language models, are providing personalized assistance, product recommendations, and support, enhancing the shopping experience. These tie into the community building aspect that makes many brands and retailers successful, as we discussed in our DTC Track at Re:Tech Disrupt.
By integrating AI-driven chatbots and voice assistants across websites, apps, and social media, retailers can create a seamless, low-friction shopping experience, increasing both conversion rates and customer satisfaction.
For retailers looking to stay ahead, investing in AI isn’t optional – it’s essential.
Prioritizing AI-driven personalization, predictive supply chain management, and seamless automation will be the key to thriving in an increasingly digital and customer-centric market. Start by assessing which AI-driven tools can provide the fastest impact – whether it’s chatbots to enhance customer engagement, analytics to optimize inventory, or robotics to streamline operations.
