StartArticlesArtificial intelligence, a major vector for the transformation of modern retail

Artificial intelligence, a major vector for the transformation of modern retail

The NRF 2025 Big Show, held in New York City, reaffirmed its importance as the leading global platform for discussing the trends and innovations shaping the worldwide retail industry. On January 12, 13, and 14, executives, CEOs, and industry leaders shared their strategies, challenges, and visions that are redefining the market. From the perspective of leadership in retail and franchising, I will explore, next, lessons and cases that stood out at the global event and lessons that can impact retail in the long term.

Artificial intelligence (AI) continues to be the driving force behind transformation in retail. Companies like Amazon and Walmart have demonstrated how AI is being used to revolutionize processes, improve customer experience, and optimize operations.

At Amazon, AI is integrated across various fronts, from the conversational shopping assistant Rufus, which responds to consumers' complex questions, to logistics enhanced by mobile robots and analysis systems that highlight the main pros and cons of products. At Walmart, partnerships with technology companies like NVIDIA are enabling the use of digital twins to forecast demand, optimize inventories, and even simulate store layouts. Efficiency is not only operational but also strategic, creating smarter and more connected stores.

This widespread use of AI positions the technology as essential to meeting growing demands for personalization, agility, and efficiency.

The NRF 2025 also made it clear that omnichannel is no longer an option, but a requirement for retailers who wish to remain competitive. Practical examples that reinforce this idea highlight the importance of integrated strategies focused on traffic to the physical store, which plays an increasingly central role in the customer experience with the product and in the relationship with the brand.

Two key insights into this are: hybrid stores,iIntegrating the physical and digital, where retailers offer a seamless experience that combines convenience and personalization; and social commerce, where platforms like TikTok and Instagram are increasingly relevant for driving sales and engagement, as demonstrated by Pacsun, which reported 10% of its digital sales originating from these platforms. This integration allows companies not only to meet customer expectations but also to surprise them with innovative and meaningful experiences.

Sustainability has emerged as one of the central topics of the event in recent years. This theme reflects a definitive change in consumer mindset. The new generations, especially Z and Alpha, prioritize brands that share their values, and this requires a complete restructuring of retail operations, such as waste reduction, where sustainable packaging, recycling initiatives, and reuse programs are at the core of brand strategies; and eco-friendly products, as the demand for local, organic items andplant-basedIt continuously grows, expanding the concept of conscious consumption beyond the food sector to include personal care and household items. In this sense, those who manage to combine sustainable practices with operational efficiency will be ahead of the market and can serve a niche that is only growing in retail.

Despite the growth of e-commerce, brick-and-mortar retail is reinventing itself as a space for connection and experimentation. Even with AI and new technologies, direct contact with the customer, with personalized and humanized service, continues to be a competitive and relevant differentiator in the relationship between brand and consumer.

I bring two cases that stood out in this regard. At American Girl (Mattel), doll customization not only increases customer engagement but also raises the average ticket per visit. The brand invests heavily in the construction ofstorytellingon social media, attracting the younger generation and also awakening a sense of nostalgia in adult customers. At Foot Locker, investments in interactive technology and personalization for the female audience demonstrate how understanding the evolution of customer expectations can transform a business.

Physical stores now transcend the simple act of selling products, becoming points of contact that create unique and memorable experiences.

The NRF 2025 also addressed the economic and technological challenges faced by the sector, while highlighting promising opportunities. The challenges are a iinflation, technological disruption, and growing consumer expectations that increase pressure on retailers. Regarding opportunities, advanced personalization driven by data and AI, and social commerce offer new ways to engage and retain consumers.

The vision for the future

The retail of the future will be defined by the ability to balance technological innovation with meaningful human experiences. Personalization will be one of the main competitive differentiators, but it must be accompanied by an ethical and transparent approach to data use. Sustainability, innovation, and an unwavering focus on the customer will be at the center of successful strategies.

The importance of leadership within companies was also a highlight at the fair. Creating and maintaining a strong culture has become an industry imperative, focusing on developing this culture through people, communicating and disseminating clear purposes and values both inside and outside the companies.

Again, we realize how the greatplayersRetail stakeholders are aligned regarding the protagonism of people in the business strategy. In this sense, service, customer experience, training, and behavior are words that are repeated in different contexts.

NRF 2025 demonstrated that the retail industry is constantly evolving, and only those who embrace change with creativity, resilience and purpose will thrive in an increasingly dynamic industry.

Adir Ribeiro
Adir Ribeiro
Adir Ribeiro, CEO and founder of Praxis Business consulting. He is a specialist in franchising, retail, and sales channels, with over 30 years of experience in these segments. He has spoken at over 500 franchisee conventions and is a member of the Board of Directors and Advisory Board of Franchisors.
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