By the time NRF 2025: Retail’s Big Show Europe comes to Paris, the industry should know just how far the retail world has progressed – from the increasing use of agentic AI for customer relationships and communication through to AI as a supply chain optimizer, as retailers and brands look to build resilient and flexible supply chains to cope with rapidly changing environments.

This is a critical year in the blending of physical, digital and new technology. The retailers that thrive will be those who embrace everything from in-store customer service to new AI delivery and make it all feel part of one brand experience. Seamless integration of AI tools into both digital platforms and physical stores will be the defining feature of successful retailers in the near future.

Agentic AI has become a major topic for retailers this year, as brands look to evaluate how technology can be used to engage with consumers and to answer questions and solve issues in real time. However, retailers must also balance the effectiveness of embracing technology with the ongoing need and desire for human contact and interaction—something that remains a key differentiator for many shoppers.

AI and consumer attitudes

Firstly, it is worth noting that not all consumers are completely convinced of the benefits of AI and a recent report by London-based communications specialist Brunswick revealed an ongoing preference for human over AI interaction.

The report revealed the findings of a survey of over 5,000 consumers across five international markets and found that emotions have played a major part in shaping how consumers view AI. Asked about how they felt about AI, about half said that they felt nervous and the other half felt excited. This emotional split highlights a fundamental tension as retailers explore how to deploy AI: consumers are intrigued by its possibilities but wary of its implications.

When it came to the use of AI as part of the retail experience, there are also clearly tensions between rational considerations and a more emotional response. While many consumers appreciate AI’s ability to speed up service and improve product discovery, others feel uneasy about the loss of personal touch and potential privacy concerns.

The study also showed that concerns about AI are not generational, as might have been assumed. Consumers of different ages have mixed feelings about AI, which suggests that retailers need to consider attitudes across a broad demographic spectrum rather than assuming younger consumers will automatically embrace AI-driven solutions.

Though consumers see the benefits of AI in terms of speed, efficiency and the increasing ease in finding products that meet their needs, there remains an expectation that AI tools should complement, rather than replace, human interaction.

Harnessing AI in retail applications

Retail leaders face a career-defining challenge in harnessing AI. The speed of development within AI has been incredible over the past 18 months, and now is the time to get beyond the hype and discover practical ways the retail industry can take advantage of AI.

In a very dynamic marketplace there are opportunities around accelerating product design, creating content and serving customers better. This is called ‘agentic AI’, where AI agents will not only serve consumers but will also become AI customers themselves, capable of making autonomous decisions to optimize retail operations and customer journeys.

It will be a blend of art and science for retail. AI will allow a multi-dimensional view of online products, for example, allowing consumers to make quicker and more accurate decisions which will improve the customer experience, satisfaction, and also reduce returns.

AI-powered tools, live streaming and virtual tours of showrooms will all help remove hassles and make things easier for shoppers. Virtual try-ons and AI-driven personalization engines will allow shoppers to experience products digitally in highly realistic ways, which will boost confidence in their purchases.

Moreover, AI’s predictive capabilities will enable retailers to anticipate trends, stock the right products at the right times, and personalize marketing campaigns to individual preferences—all contributing to better business outcomes and more satisfied customers.

Introducing virtual influencers

Much of the interaction between shoppers and AI has been screen-led and focused on improving efficiency and reducing costs for retailers, as AI can typically handle most basic functions and queries. Chatbots, automated customer service, and AI recommendation engines have been widely adopted to streamline operations.

However, the past 12 months has seen the rise of AI with a more personal feel to help improve engagement as well as to service functional requirements.

This shows both the opportunities and challenges facing retailers and brands as they evaluate how best to tackle AI and incorporate a new generation of technology at a time when the implementation of AI has moved from the testbed to live execution.

Virtual influencers, AI avatars, and AI personalities have emerged as a new way to connect with consumers. These AI-driven figures engage audiences on social media, create marketing content, and embody brand values in a highly controlled and consistent way.

Unlike human influencers, virtual influencers can operate continuously, are perfectly aligned with brand strategy, and can reach niche demographics with precision. They appeal especially to younger, digitally savvy consumers who expect authentic and immersive experiences online.

At the same time, brands must carefully consider issues of authenticity, transparency, and consumer trust when using virtual influencers. The ethical dimension of AI in marketing is becoming increasingly important, and successful brands will be those that use AI responsibly and openly.

The road ahead for AI in retail

The next few years will be crucial as retailers determine how best to integrate AI in ways that enhance rather than detract from the shopping experience.

The physical and digital worlds of retail are converging faster than ever before. AI will be a key enabler in this transformation, helping retailers build smarter supply chains, more personalized marketing, and more engaging customer service.

Yet successful adoption requires a balanced approach—one that respects consumer concerns while harnessing AI’s undeniable advantages.

The retailers who come out ahead will be those that combine technological innovation with a human-centric approach, delivering experiences that are not only efficient but also warm, authentic, and memorable.

For consumers, this means more personalized service, faster access to relevant products, and new ways to interact with brands they love. For retailers and brands, AI represents a powerful tool to build loyalty, increase operational resilience, and unlock new opportunities in a rapidly evolving marketplace.

The future of retail is intelligent, interactive, and integrated—and AI will be at its heart.

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