As we enter a brand new yr, the retail business continues to evolve on the velocity of AI. Walmart Chief Government Officer Doug McMillon not too long ago noticed that generative AI’s comparatively brief cycle instances are serving to his firm study and innovate quicker to raised anticipate buyer wants.1 I’m energized to see the optimistic affect that the tempo of AI innovation is bringing to the retail world.
This time final yr, I used to be having conversations with retailers all over the world who couldn’t wait to faucet the seemingly limitless potential of AI. For a lot of of them, although, translating that promise into bottom-line affect took time. Whereas many retailers have been already deploying AI instruments to drive elevated income and reimagine cumbersome enterprise processes, most have been nonetheless determining the place to start and the way particularly AI might assist them acquire an edge out there. At present, the conversations I’ve are extra sharply targeted on figuring out AI use circumstances that may assist retailers develop income and enhance profitability throughout the worth chain. To attain these targets, retailers are starting to develop a wealthy agentic world marked by a vivid tapestry of AI brokers. Along with brokers for app improvement, compliance, info safety, and different broad, cross-organizational enterprise course of wants, retailers are already deploying customized agentic options to enhance core retail situations, like procuring and retailer operations. A brand new period of AI is right here.
Microsoft Cloud for Retail
Join your clients, your individuals, and your information
This yr at NRF 2025, we’re excited and proud to show how our information options, Copilots, and customizable retail brokers are serving to to guide this shift throughout each retail phase. We’re simply as desperate to showcase how simple we’ve made it for retailers to maximise the success of their AI investments on the Microsoft Copilot and AI stack—probably the most superior platform for creating AI options that drive retail progress and profitability. Utilized by over 100,000 organizations worldwide, Microsoft Copilot Studio affords over 1,400 prebuilt plugins and connectors to combine all your information, APIs, and different third-party companies. And with the revealing of Microsoft Azure AI Foundry, organizations can simplify and scale their AI workloads with confidence. The identical AI platform that we construct our Microsoft Copilots on is now out there to retailers. With probably the most versatile stack of AI improvement instruments, we’re dedicated to serving to our clients push the frontiers of what’s attainable with agentic retail and be prepared for regardless of the future might maintain.
In brief, our mission is to assist our clients grow to be Retail Prepared.
What does it imply to be Retail Prepared?
In at the moment’s quickly evolving retail panorama, being “Retail Prepared” means extra than simply maintaining with tendencies. It’s about being forward-thinking and making sensible know-how investments with the ability to develop the topline whereas bettering the underside line. Along with our companions, Microsoft Cloud for Retail supplies AI that’s constructed for the longer term, prepared now. With our deep buyer relationships and complete companion community, we’re uniquely positioned to assist retailers throughout all segments discover new worth with AI. Our options allow retailers to remodel the consumer journey, empower the retail workforce of the longer term, create agile, sustainable provide chains, and unlock the potential of their information.
Customized Buying Agent improves the procuring expertise for customers with a context-aware conversational assistant to assist them discover the right merchandise for his or her wants. Retailer Operations Agent places secure, company-governed generative AI within the fingers of retailer associates to allow them to spend much less time trying to find product info or solutions to retailer insurance policies and procedures and extra time serving to clients. And retail information options in Microsoft Material give retailers the ability to unify and enrich a variety of retail information sources, enabling real-time, actionable insights.
To study extra about how Microsoft’s retail brokers and AI options are serving to buyer grow to be Retail Prepared, learn AI-powered retail: Elevating buyer expertise and operational effectivity.
Rework the consumer journey
In at the moment’s extremely aggressive retail panorama, personalization has grow to be the usual. Bain Consulting Group estimates that retailers can enhance income by 5% to 10% by means of AI personalization instruments.3 However the stakes could be excessive. Because the know-how turns into extra widespread, clients are starting to anticipate tailor-made experiences and reacting extra strongly to ineffective personalization. To ship the optimum buyer journey, retailers are more and more turning to generative AI-powered options that assist them reply shopper inquiries, handle digital procuring carts, tailor advertising and product suggestions, ship enhanced search capabilities, elevate customer support interactions, and extra. By participating with clients early of their procuring journey, conversational commerce brokers and different AI personalization instruments are boosting buyer satisfaction and driving top-line progress.
- A first-rate instance of the success of gen AI-powered conversational commerce is Walmart’s integration of OpenAI’s GPT-4 into its voice order and Textual content to Store options. This innovation permits clients to seek for gadgets, place orders, and schedule pickups or deliveries with human-like, interactive responses all through the complete shopping for journey.
- Bathtub & Physique Works not too long ago launched Gingham Genius, a generative AI-powered conversational commerce resolution that helps clients uncover the best perfume custom-made to their distinctive preferences. This progressive resolution guides new clients of their perfume exploration, introduces present clients to new scents and merchandise, proposes options for discontinued fragrances, and affords personalised present suggestions primarily based on particular person tastes.
- Recognizing that as much as 80% of tire purchases begin with a go to to a retailer’s web site, Canadian Tire Company constructed a conversational commerce app utilizing OpenAI Service and OpenAI’s GPT-4. Named CeeTee, the app helps clients establish the proper tires for his or her wants early within the procuring journey, growing alternatives for conversion and boosting model loyalty.
- Retailers like Natuzzi and Gardens Alive are leveraging Dynamics 365 Contact Heart and Dynamics 365 Buyer Service to remodel customer support with generative AI. These options allow personalised buyer journeys by answering inquiries, tailoring suggestions, and streamlining operations, creating seamless self- and assisted-service experiences that win buyer loyalty.
- The Dynamics 365 platform is enabling connoisseur chocolatier Venchi to ship a personalised omnichannel procuring expertise to clients and enhance clienteling on the level of sale.
Be a part of Kathleen Mitford, Microsoft Company Vice President of International Business Advertising on Monday, January 13, 2025 on the Huge Concepts stage at NRF 2025 for Rework the consumer journey to study extra from Thilina Gunasinghe, Chief Digital and Expertise Officer at Bathtub and Physique Works, Fabio Tormen, Chief Info Officer at Venchi, and Kathie Johnson, Chief Advertising Officer at Sitecore.
Empower the retail workforce of the longer term
At Microsoft, we’re devoted to creating AI instruments that enrich the worker expertise with the entry and insights they should ship distinctive buyer interactions. Whether or not by means of using our Retailer Operations Agent or by means of a customized partner-developed implementation, retailers now have the ability to raise their retail workforce, making them extra agile and conscious of buyer wants, and staff are prepared for AI. The 2024 Work Developments Index discovered that 84% say AI helps them be extra inventive and give attention to crucial work.2
I’m actually excited concerning the distinctive and progressive methods our clients are deploying AI to empower their retail workforces. Listed here are a couple of notable examples:
- Swedish retailer Lindex customized its Lindex Copilot to grasp retailer affiliate roles and tasks and supply tailor-made steering that helps staff ship contextually related and personalised help.
- With their customized ChatCTC worker digital assistant, Canadian Tire Company is saving its 3,000+ company staff 30 to 60 minutes a day, releasing them from mundane duties to give attention to higher-value buyer experiences.
- Utilizing Retailer Operations Agent, staff at main Nordic retailer Kappahl can now use generative AI to securely floor product info and retailer insurance policies and procedures in seconds, growing retailer affiliate productiveness and upleveling the procuring expertise for purchasers.
- MediaMarktSaturn’s MyBuddy voice-navigated in-ear AI agent—developed in partnership with Accenture/Avanade and leveraging Customized Buying Agent—permits retailer associates to “store” the shop catalog for the most effective merchandise for the shoppers. This resolution boosts buyer confidence and enhances staff’ product data to take advantage of conversion alternatives on the level of sale.
Be a part of me on Sunday, January 12, 2025 on the Huge Concepts stage at NRF 2025 for Retail prepared: AI constructed for the longer term, prepared now, to listen to from Walmart and Aaron Berg, Vice President, Digital Transformation at Walmart, and Cari Covent, Head of AI and Rising Expertise at Canadian Tire concerning the alternatives and challenges for organizations bringing generative AI to their workforces.
Create an agile, sustainable provide chain
Lowering out-of-stocks isn’t the one approach retailers can get forward. Many retailers are discovering the advantages of a extra sustainable provide chain, from elevated buyer satisfaction to rising provide chain resilience. Not surprisingly, Gartner finds high provide chain organizations are utilizing AI to optimize processes at greater than twice the speed of low performing friends.4
Let’s take a look at a few the highest provide chain targeted retailers utilizing AI.
- The Netherlands’ largest grocer, Albert Heijn, got down to cut back meals waste by (amongst different issues) bettering the effectivity and precision of its provide chain. Utilizing generative AI instruments that assist meals arrive to the purpose of sale at most freshness and dynamically discounting costs to encourage customers to purchase earlier than that meals is now not contemporary, Albert Heijn helps save greater than 250,000 kilos of meals from going to waste.
- SPAR ICS, the unbiased IT unit of SPAR Austria Group, created an award-winning, AI-enabled demand forecasting system. With the brand new system, SPAR Austria Group is optimizing its provide chain and reaching 90 p.c stock prediction accuracy.
- Main Australian retailer Coles has launched a five-year strategic partnership with Microsoft to develop Coles’ world-leading edge computing platform, Clever Edge Spine (IEB). Coles and Microsoft will co-innovate to discover how the IEB can join and handle IoT units throughout Coles’ provide chain and into shops to advance Coles’ sustainability targets, enhance buyer experiences, cut back inventory loss, and increase group member productiveness and security.
Be a part of Gina Claxton, Microsoft CVP, US Retail and Client Items, Avanade, and 1-800-Flowers.com on Monday, January thirteenth on the Huge Concepts stage for Promoting roses: Avanade presents – the 1-800-Flowers story to learn the way the enterprise has flourished by staying agile and progressive, transferring early to thrive within the .com period, and now doing the identical within the AI age with the assistance of Microsoft and Avanade.
Unlock the potential of your information
For retailers searching for to grasp their clients, it’s laborious to overstate the worth of an information platform that allows them to leverage all of their information whereas minimizing danger by means of sturdy safety and governance. Gartner forecasts that by means of 2025, 80% of organizations searching for to scale digital enterprise will fail as a result of they don’t take a contemporary method to information governance.5 Conversely, the AI alternatives are seemingly limitless for the retailers who’re capable of unify and safe their retail information and switch it into buyer worth.
Right here’s how a few of our clients are utilizing Microsoft’s information platform and AI options to unlock the potential of their information:
- The ASOS group is utilizing Azure AI Foundry to develop customized AI options that pull and embed data of tendencies as they floor, enabling them to curate and share gadgets with customers primarily based on a deep data of the most recent tendencies.
- Saucony optimized buyer acquisition throughout Black Friday and Cyber Monday through a customized AI mannequin developed in partnership with Yobi, resulting in a powerful surge in new clients in simply weeks.
- With the assistance of the Microsoft Material information platform, Chanel is deploying generative AI securely for essential duties like content material creation, personalization, high quality monitoring, provide chain administration, real-time translations, and gross sales aftercare.
- Microsoft Azure’s suite of instruments helped Brazilian retail chain Quick Store put together their information property for AI transformation through improved information reliability, quicker information supply, enhanced information governance, safety, and self-service entry for its traces of enterprise.
Be a part of Keith Mercier, Microsoft Vice President, WW Retail and CG Business on Tuesday, January 14, 2025 on the Huge Concepts stage at NRF 2025 for The way forward for AI in retail to listen to how Microsoft, Lenovo, and Intel are equipping clients and companions with the options they should implement AI on the edge.
Desperate to study how one can grow to be Retail Prepared? Go to the Microsoft sales space at NRF 2025 to see our AI demos in motion, together with hands-on experiences within the Copilot Agent Zone. And obtain Microsoft’s 2025 retail report The AI Benefit: How retailers are shaping buyer experiences with data-driven insights, produced along with Cascade Insights.
Be taught extra
1 Yahoo Finance, Walmart is the 2024 Yahoo Finance Firm of the 12 months, December 2024.
2 Microsoft, 2024 Work Development Index Annual Report, Might 2024.
3 Bain & Firm, Retail and Gen AI: Now Scale These Terrific Early Returns, Might 2024.
Shelley Bransten, Company Vice President, International Retail, Client Items & Gaming industries, grew up in retail. She’s a passionate advocate for purchasers and works tirelessly to make sure they’re arrange for fulfillment. Throughout her time at Microsoft, she has overseen groundbreaking partnerships with main manufacturers and retailers throughout the globe. Shelley additionally sits on a number of boards together with NRF, RILA, and Trove.