What you need to know:

• Retailers are increasingly focusing on generative AI for data analysis and operational efficiency, but many are struggling to identify where they can extract the best value early

• Digital screens are being sweated for more utility and experiences, though scaling across multiple locations remains a challenge.

• Systems that improve inventory management, make use of digital shelf labels, and offer personalised customer service to join back and front ends are gaining traction.

• In-store journey mapping capability on the up via 'ambient intelligence' and RFID technology.

• Signs social commerce taking off as Amazon signs in-app deals with Meta, TikTok, Snap and others.

• Retailers recognising that stock availability directly impacts consumer trust and loyalty – with inventory management being reframed as experience cornerstone.

• Retail media – off-site extensions expected to outpace on-site by 3x over next 12 months.

There was no escaping the influence and potential of generative AI  in retail at this year's "The Big Show" in New York in January. 

But it wasn't the only headline trend to emerge from the event. While US-centric, the event is run by the National Retail Federation in providing important markers along the ever-evolving roadmap for technological innovation in the sector.

Teresa Sperti, founder of Arktic Fox, came back with seven key takeouts and incoming trends: 

• Generative AI
• Empowering in-store staff
• Digital screens
• Instore intelligence,
• Social commerce
• Inventory management
• Retail media

Sperti debriefed Mi3 on her return.

First up, Nvidia's global retail practice lead, Azita Martin pinpointed where retailers should concentrate AI firepower – and how to get moving faster.

"I would really recommend that the AI initiatives be top-driven.  You need executive sponsorship. You need to have the top executives in your company believing in it. The second thing I would look at is what are some of your biggest business challenges. And certainly, the supply chain is really an important area that could benefit a lot from AI."

She flagged advances in computer vision and simulation technology and ecommerce.

"If I had to pick three, I would be looking at those three areas and picking a specific challenge that you want to address. Assign teams that are responsible for those AI projects, determine the metrics to  measure the success of those projects, then get started and continuously provide updates, measuring those metrics to make sure that you're really adding value."

Starbucks EVP & CTO, Deb Hall Lefevre, said the multinational has cold filtered its technology approach to three words: "tech just works" and its purpose to two: "empowering partners".

"When you have 40,000 sites all around the world, making sure that technology is reliable is super important. If our partners are being distracted by tech disruptions, they're not able to do what they do best, which is serve our customers and craft amazing beverages. So that's what we're focused on... it's the foundation of our tech strategy."

A simple enough mission statement. But making sure "tech just works" is the cornerstone of all seven trends coming out of New York – and pretty much every business.

#1 Generative AI

The underlying vibe was that most retailers are still working out where they will generate the best returns from AI deployment, with early applications centred on data analysis, employee empowerment, and operational efficiency. But there was a sense that 2025 is the year when experimentation starts to evolve into production at scale.

Two examples stood out;

Tapestry – Tell Rexy: Tapestry is the parent firm of luxury brands Coach, Kate Spade New York and Stuart Weitzman. Its Tell Rexy program – part of its Coach brand – gathers insights from circa 15,000 in-store sales associates and then uses AI to analyse the data to identify themes and trends, basically turning fragmented insights into scaled intelligence across product performance, in-store experience and the like. It now claims AI product development is 10x faster, hence the business expanding Tell Rexy to its Kate Spade brand. Generative AI is also creative efficiencies in code with code development time reduced by as much as 40 per cent for other digital products. Recoding benefits are lower, but still impressive at 15 per cent cheaper. 

Guess – Big Data: Clothing brand Guess also uses Gen AI to allow its team across the board to be able to derive insights from data. This is built on a Big Data infrastructure that enables team members to verbally feed Guess's software and likewise extract insights from the data.

H&M: Chief digital information officer Ellen Svanström said the fast fashion giant remains in testing mode. She sees "enormous potential" but for now where the best value will be found is an open question.

#2 - Empowering in-store staff

While US retail dynamics don't always apply Australia, there were some applicable staff empowerment elements on show.

Home Depot showcased its inventory management system that uses camera technology to automatically detect out-of-stock items on shelves and alert team members for replenishment.

Sephora is improving the sales associate’s ability to deliver personalised service by using technology to analyse customers' skin types and make tailored product recommendations.

Within grocery innovations in digital shelf labels, for instance guiding pick-and-pack staff to locate items swiftly, are enhancing both efficiency and productivity.

There’s a clear move towards using technology to directly support sales associates and improve operational efficiency, but that is not a perspective not widely adopted in Australia, according to Sperti. “In Australia, the focus is on customer experience through digital channels and less so in store.”

#3 - Digital screens

Digital screens deployment is on the rise – as are use cases as retailers bid to blend physical and digital experiences. "The store is your stage," per one exec.

Among the formats being harnessed:

• Digital shelf talkers – small digital displays that provide information about nearby products. Increasingly prominent along with use of digital shelf labels that provide product information, benefits, and personalised recommendations. However, many of the labels on display in real-world environments were rudimentary, with only a few examples of personalisation loose in the wild.
• Digital pricing and information labels – increasingly able to offer additional product details. The downside: they can be expensive to scale across multiple locations.
• Lift-and-learn technology – changes the information displayed on a screen when a customer picks up a product. The goal is to make the experience more interactive and informative. 

Overall the trend appears to be that screens are increasingly used to tell product stories, providing contextual and personalised experiences for customers. 

But Sperti said the show suggests retailers are finding it hard – and costly – to scale beyond easy, early pilots across national store footprints.

#4 - In-store intelligence

Brands are increasingly sophisticated in understanding ecom journeys. Understanding physical journeys at scale is much harder. But the tide may be turning: With ambient intelligence—those sensors and systems that make stores feel alive—retailers are able to track dwell times and engagement.

Retail media – and the high double digit margins it promises – is a key driver due to the need to quantify supplier returns on in-store investments. Meanwhile engagement data helps brands optimise decisions on inventory movement, product placement, and overall customer experience.

RFID technology is also becoming more precise and therefore more valuable as measurement from carton-level to item-level tracking. This in turn provides better insights into inventory management, supporting ambient intelligence and enabling optimised product availability for increased sales. Uptake is also helped by the fact that costs for tags are dropping,  making it viable to track lower-cost products.

Finally, the 2D barcode standard, set to become the industry norm by 2027, is emerging as a change driver. Unlike traditional barcodes that carry limited information, 2D barcodes can hold rich, detailed data. For marketers, that creates the opportunity to engage with customers at the point of purchase. That's because when scanned, a 2D barcode can provide much richer information, such as product origin, sustainability credentials, usage tips, and personalised offers.

The shift to 2D barcodes also increases the importance of Product Information Management (PIM) software since each scan will become an opportunity to strengthen brand loyalty, and to drive upsells or cross-sells.

#5 - Social commerce

In China social commerce accounts for 32 per cent of all e-commerce sales. In the U.S. it's just 6.6 per cent. The contrast is as much about cultural readiness as it is about infrastructure with American retailers and consumers still grappling with hurdles that their Chinese counterparts have long cleared.

For U.S. retailers integration challenges remain, exacerbated by a patchwork of data sources making it harder to seamlessly weave social commerce into existing e-commerce frameworks – a situation that will be familiar to many Australian merchants.

Consumer trust and habits remain a sticking point, though there was evidence at The Big Show that the tide is turning. Amazon's strategic in-app shopping partnerships with TikTok and Meta are already creating ripples, promising to accelerate adoption.  

Retail giants like Walmart are also increasing investment into influencers and content creators – and heavily in programs to drive engagement.

Live-streaming is likewise seeing cautious experimentation. While brands like H&M have struggled to capture U.S. consumer interest, Zara’s selective success – rolling out globally after success in China via Douyin – suggests that live streaming has hard commercial potential. 

#6 - Inventory management

Once seen as a supply chain chore, inventory is being reframed as a cornerstone of the customer experience. In an era where seamless digital commerce and in-store convenience have become table stakes, the way retailers react to the reality that what’s in stock – or what isn’t – can make or break a customer’s journey.

The message from NRF 2025 reinforced inventory management's role in customer experience and brand loyalty.

Many retailers recognise they have poured resources into demand generation through social campaigns, influencer tie-ins, and marketing blitzes, only to stumble when shelves fail to deliver. Bridging this demand-versus-supply gap isn’t just a logistical challenge; it’s now also considered one of the industry’s biggest growth opportunities.

#7 - Retail media

Retail media in the US is dominated by Amazon with a 77 per cent market share.  Walmart comes next with seven per cent. That leaves everyone else, 60-plus retail media networks, fighting over the remaining 16 per cent, underscoring the steep climb for any would-be disruptors.

But the real buzz at the show was about where retail media is heading, not just who controls it. Off-site retail media – ads placed outside of a retailer’s owned platforms, e.g. on social, BVOD and CTV and out of home formats – is projected to grow three times faster than on-site over the next five years. For retailers and brands alike, this shift represents both a seismic opportunity – and an equally large stitching and measurement challenge.

Sperti predicts second tier retail media networks will struggle if they cannot make it easy for brands to execute at scale: "Consolidation and partnering to deliver something unique is paramount for the retailers who don’t have the scale or can’t build the capability that brands demand."

In Australia, retail media’s gross merchandise value was expected to hit $6.5 billion by the end of 2024 – and with more retailers now moving into launch phase, 2025 appears set to be significantly larger.