Ahead of The Curve:
2025 Innovation Imperatives for Retail

Many industries are at an inflection point with AI, but retailers and consumer brands are uniquely positioned to make the most of this transformative GenAI era. It’s not just about more efficiently replicating consumer experiences of the past but also about doing entirely new things: GenAI-driven virtual shopping assistants, for example, or GenAI “marketer’s buddies” that generate intelligent marketing content at the push of a button. GenAI can also empower store associates and customer service reps with conversational assistance and even be an ally of IT departments as they automate software development lifecycles.

Today, GenAI is not simply a trend among other trends but a strategic imperative through which retailers and brands should view the entire opportunity landscape. To make the most of the coming year and this GenAI moment, retailers and brands must pay close attention to the following industry dynamics.

1. New digital tools to accelerate the “inspiration to discovery to checkout” journey

Retail marketing strategies built around influencers and shoppable social content are nothing new. What’s changed are the digital enablers. Generative AI, in particular, is rapidly altering the world of social commerce. Brands and retailers can now tap into innovative tools offered by social media companies like TikTok and Instagram to reach new heights of personalized curation. These GenAI tools will allow companies to blend product content with UGC and influencer content more seamlessly, efficiently, and effectively. This context-aware, social, shoppable content will, in turn, contribute to experiences that follow consumers across digital touchpoints (online commerce, email, etc.). Given the ubiquity of shoppable social content, brands and retailers must think outside the box, creating experiences that are more subtle and indirect — inspiration rather than immediate product discovery.

2. A shift from product information management to product experience management

This shift is enabling new approaches to customer engagement, as retailers and brands strive to deliver a consistent product discovery experience across all touchpoints. Many are investing in creating a more comprehensive single source of truth for all product content across the enterprise. This single view of the product experience goes beyond 'product information,' linking a unique product ID to all product master attributes, marketing content, and UGC collected from social media. With a mature product data ecosystem, enterprises can automate and enrich product attributes from images, curate and personalize product marketing content for different audiences, and deliver consistent and contextual product experiences across all touchpoints.

3. Transformations in loyalty and personalization

Retailers have invested heavily in synthesizing customer data from various touchpoints and siloed systems to achieve unified customer views. They want to improve their understanding of customer preferences, predict customer behavior, and drive personalized shopping experiences across the omnichannel landscape. More brands and big box retailers are building AI into their innovation roadmaps to take advantage of customer data, and this trajectory is also impacting customer loyalty programs, which are evolving from static, rewards-based “earn-and-burn” models to more experiential loyalty programs. To impress customers, these evolved loyalty programs must offer a customizable and diverse world of perks, benefits, and tiered offerings (early stock access, exclusive access to merchandise, etc.). 

4. Retail stores are multi-dimensional hubs

Omnichannel strategies should recognize the impact of a positive in-store experience while also seeking to evolve that experience. Stores are becoming multi-dimensional centers for branding, engagement, transactions, and fulfillment. We expect retailers to invest in technologies like AI, IoT, and edge processing to realize critical business objectives like revenue generation, frictionless in-store customer experiences, cost reduction, and operational efficiencies. On the revenue side, we expect more retailers to monetize store real estate with retail media networks that run on digital signage. To deliver frictionless customer experiences, retailers will focus on enabling omnichannel convenience at stores across product discovery, product information accessibility, self-service checkout, and in-store pickup and returns. On the cost side, more retailers will be looking to equip store associates with productivity tools, AI, and automation to unlock operational efficiencies.

5. A focus on frontline associate empowerment

While customers appreciate convenience, they also value the human touch. Retailers need to view emerging retail technologies as opportunities to empower rather than displace frontline associates. They can do this by providing intelligent tools that leverage AI, automation, and GenAI-powered conversational assistants to improve productivity and elevate the in-store experience. For example, video analytics can now provide queuing alerts and out-of-stock alerts. GenAI-powered assistants can help associates address customer queries, streamline returns processing, and make the most of personalized up-sell/cross-sell opportunities. This approach ensures that employees benefit from working at stores defined by efficient inventory management, consistent planogram compliance, streamlined checkout, and reliable theft detection and loss prevention.