5 key retail trends to look out for in 2025

As we look ahead to retail trends in 2025, technological advancements, shifting consumer expectations, and innovative strategies are redefining how retailers and consumer goods companies operate. To uncover the latest trends and insights, we attended the National Retail Federation’s Big Show (NRF 2025), where industry leaders, technologists, and innovators shared their vision for the future of retail.

From the transformative power of AI to the reinvention of physical stores, the changing food retail landscape, and the rise of circularity in sustainability efforts, the trends discussed at NRF reveal a clear path forward for businesses ready to embrace change. In this blog, we’ll explore the five key retail trends that will shape of the industry in 2025.

1. AI takes the main stage

AI, GenAI in particular, continues to be a major transformative driving force for retail and consumer goods companies in 2025. Among the most impactful applications of generative AI are AI assistants and digital twins.

AI assistants, whether designed for customers or employees, are intelligent virtual tools that leverage AI to enhance the shopping experience by delivering personalized support and streamlining operations. These assistants can be deployed in physical stores, online platforms, or a combination of both, making them versatile solutions for modern retail challenges. Meanwhile, digital twins—virtual replicas of stores and warehouses—are enabling businesses to remotely design, update and manage physical assets to optimize operations, streamline workflows, and simulate real-world scenarios in a risk-free way.

Over the past few years, many retailers have tested the waters with AI, exploring proofs of concept and running pilot programs. In 2025, the focus will shift from experimentation to execution. Organizations will decide whether to scale these initiatives across their entire enterrpise, a move that hinges on robust foundational capabilities.

Success in AI adoption requires mature data management, AI/ML operations, and stringent security protocols, alongside compliance frameworks and a commitment to responsible AI practices. These pillars are essential for ensuring AI’s transformative potential is both effective and sustainable.

2. Store investments show no signs of slowing down

While the last decade saw explosive growth in digital channels, recent years have brought renewed attention to brick-and-mortar stores. Consumers continue to visit retail stores for their unique advantages: human connection, instant gratification, and convenience. However, the role of these physical locations has evolved.

In 2025, retail trends point to stores becoming multi-purpose,  no longer just places to shop but serving as showrooms, fulfillment centers, and pick-up points. This shift demonstrates heightened consumer expectations for a variety of services and experiences, pushing retailers to invest in modernizing their stores.

Key areas of investment include upgrading Wi-Fi and networks infrastructure, enhancing point-of-sale (POS) systems, and upgrading handheld devices and scanners. Technologies like electronic shelf labels, RFID tags, IoT sensors, cameras, and even robotics are becoming commonplace as stores futureproof their operations. These investments are designed to streamline processes, improve customer satisfaction, and stay competitive in the ever-changing retail landscape.

However, this influx of new technology creates a significant challenge: data fragmentation. IoT devices and store systems generate vast amounts of data, but much of it remains siloed and underutilized. To truly capitalize on the store investments, retailers need strategies to consolidate and analyze store data. By doing so, they can unlock valuable insights that lead to better operations, more personalized shopping experiences, and greater employee productivity. One example of this is the Neudesic Retail Control Tower that consolidates store and inventory data into a single platform, enabling better decision-making and communication.

3. North American grocery trends are evolving: convenience and value drive change

Another fundamental shift in retail is the North American grocery landscape. Traditional supermarkets are losing ground as consumer spending moves toward online delivery, warehouse clubs like Costco and Sam’s, and discount chains such as dollar stores. This evolution reflects consumers’ growing preference for convenience, value, and flexibility.

Convenience is a major driver for the change in grocery shopping behaviors with channels such as e-commerce, click-and-collect, and drive-throughs gaining traction. In fact, according to a research conducted by Euromonitor, online grocery is projected to grow by 5% in 2025, outpacing the overall grocery sector’s 1% growth.

Another key factor influencing grocery retail trends is the intersection of price sensitivity and personal values. While finding a bargain remains the top motivation for shoppers, its dominance is declining. Instead, consumers are increasingly prioritizing brands that align with their personal beliefs. According to Euromonitor, 30% of digital consumers prefer to buy from brands they view as authentic and values-driven, while 27% avoid brands that don’t align with their social or political beliefs.

As the shopping journey becomes more complex, grocery retailers must adapt to more sophisticated distribution strategies. Stores are no longer just places to browse but also serve as discovery centers and distribution hubs. Technology plays a vital role in supporting this dual purpose, enabling retailers to meet consumers wherever they are, whether online, on their phones, or in their neighborhoods.

The path forward for grocery retailers will require balancing convenience, value, and authenticity while embracing the digital tools and innovative strategies needed to stay competitive.

4. Social media overtakes eCommerce platforms

Social media is now a critical sales and engagement channel, with platforms like TikTok transforming how consumers discover and shop. With hundreds of millions of users dedicating hours each day to these platforms, social media has transformed from an engagement tool into a thriving marketplace. TikTok Shop, launched in September 2023, has quickly established itself as a key shopping and discovery platform, merging entertainment with e-commerce.

The platform’s success lies in its short-form video format, which is ideal for product demonstrations and storytelling. Influencers play a critical role by sharing authentic, personal experiences that resonate with viewers, creating a sense of trust and connection. This dynamic has proven especially effective for categories like beauty, fashion, and other products that require consideration before purchase. TikTok’s ability to showcase how products work or fit into a consumer’s lifestyle has turned it into an experiential retail powerhouse, making it an indispensable channel for brands targeting younger, tech-savvy audiences.

This shift underscores the rise of experiential retailing, where authentic, visually compelling content drives brand discovery and loyalty.

5. Focus on circularity: sustainability that works for business and consumers

Sustainability remains a priority for retailers, with circularity leading the way. Sustainability in retail is a long-term commitment, often described as a marathon rather than a sprint. Retailers are increasingly adopting strategies that balance environmental responsibility with business growth, ensuring sustainability initiatives drive value for both the planet and business. Circular retailing—focused on repurpose, reuse, and recycle—has emerged as a key area of new retail trends.

Examples of circularity

At NRF, we saw examples of successful circular initiatives that highlight how retailers are making meaningful strides. Target’s car seat trade-in program has recycled over 3 million car seats, offering consumers an easy way to participate in sustainability. Walmart’s Resold marketplace features more than 5 million secondhand products, making affordable, sustainable shopping accessible to a broader audience.

These initiatives demonstrate that circularity can drive significant consumer and retailer benefits. As Agata Ramallo Garcia, Vice President of Enterprise Sustainability at Target, noted at NRF 2025, the key to success lies in aligning sustainability with what consumers care about most: affordability, convenience, and quality.

Rretailers embracing circularity are finding that it’s not only an ethical imperative but also a competitive advantage in today’s retail landscape.

The future of retail tech: AI and beyond

AI remains at the forefront of retail trends in 2025 and onwards. However, adjacent technologies like computer vision, robotics, and biometrics are also gaining traction. These complementary advancements are driving new investment opportunities and reshaping how retailers operate.

Regardless of where retailers and consumer goods companies choose to invest, one constant remains: success depends on partnership and collaboration. In today’s complex technology ecosystem, no single company, whether a retailer or a technology provider—can achieve lasting success in isolation. Partnerships with vendors, consultants, and motivated internal teams are essential to navigating the challenges of implementing and scaling these innovations.

Ultimately, retail is a human-centered business. Technology exists to serve people—shoppers, employees, suppliers, and the broader retail community. As retailers adopt and refine advanced technologies, keeping human experience at the core will be critical to driving meaningful progress and building long-term value.