Generative AI for Retail: Key trends to watch in 2025

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It’s that time of year when the pundits opine on what next year will bring for retailers. Rather than listing the top technology trends in retail as I did last year, I’m going to focus on generative AI and highlight some key trends to watch. If 2023 was the year when generative AI exploded on the scene, and 2024 was the year of experimentation, then 2025 will likely be the year the technology matures even further. We’re getting closer to Gartner’s “slope of enlightenment” but we’re not quite there yet.

If you’re tired of hearing about generative AI, I can commiserate. Generative AI reminds me of the band Nirvana. There were many grunge bands that paved the way, yet Nirvana got all the attention at the expense of many other great bands. But no one can deny that Nirvana, and generative AI, have had a major impact on our world.

So, here are three retail-specific use cases and three technologies to watch in 2025:

Virtual Shopping Assistants (use case)
Hyper-personalization (use case)
Virtual Try-on (use case)
AI Agents (technology)
Domain-specific Foundation Models (technology)
Computer Use (technology)

Virtual Shopping Assistants

The concept is simple. When a shopper is unsure of what to purchase, they can ask in-store associates for expert advice—at least in theory. But what if you’re shopping online? Enter the AI-powered virtual shopping assistant, versed in such diverse topics as plumbing, digital networks, and cold-weather fashion. What tools do I need to repair an in-ground sprinkler system? Which Wi-Fi router works best outdoors? And what should I look for in stylish ski gloves? Getting answers to these questions was the idea behind Rufus, the virtual shopping assistant launched by Amazon.

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