Retail may not be the fastest industry to adopt artificial intelligence, but 2025 quietly became a turning point. Beneath the steady drumbeat of AI announcements, the sector crossed an important threshold: AI moved from experimentation to visible influence on how consumers shop — and how retailers compete for relevance.
The year revealed a paradox. Retail lags industries like telecom and finance in AI adoption, yet consumer behavior is changing faster than many retailers’ internal systems can keep up. That gap is now one of the industry’s biggest strategic risks.
Retail Is Behind — and That’s Exactly the Problem
According to a 2025 AI adoption study by the Wharton School, retail trails sectors such as telecommunications and financial services in AI deployment. That finding surprised even the researchers, given retail’s abundance of obvious use cases — from pricing and promotions to labor scheduling and supply chain forecasting.
The explanation is structural. Retail’s physical operations — stores, inventory, fulfillment — slow down ROI compared with software-heavy industries. But slower returns don’t mean lower stakes.
In fact, 2025 showed that consumer-facing AI is advancing faster than retailer-controlled AI, a dynamic that could reshape discovery, loyalty and margin control.
AI Is Already Changing How Shoppers Find Products
One of the most consequential signals came from Adobe’s holiday shopping data. Between Nov. 1 and Dec. 1, AI-driven traffic to U.S. e-commerce sites surged 758% year over year. On Cyber Monday alone, AI-referred traffic jumped 670%.
The absolute numbers are still small compared with total e-commerce traffic — but that’s beside the point. As retail strategist Nikki Baird of Aptos warned, AI intermediaries strip retailers of visibility into how customers arrive at product pages.
In plain terms: if AI assistants become the new search engine, retailers lose control over the top of the funnel.
“If You Can’t Beat Them, Join Them”
That fear explains why many large retailers spent 2025 building their own AI agents while also partnering with external platforms like ChatGPT. The goal is simple: stay present wherever shopping decisions begin.
What follows is not hype, but a snapshot of how deeply AI penetrated retail operations in 2025.
The Retailers That Defined AI Adoption in 2025
Walmart
Walmart introduced Wally, a generative AI assistant for merchants, alongside Sparky, a consumer-facing agent for planning purchases and summarizing reviews. The retailer also enabled ChatGPT Instant Checkout, signaling its belief that AI-driven commerce is inevitable — and better embraced than resisted.
Target
Target leaned into AI as part of its broader turnaround strategy, using it for merchandise ideation and marketplace seller reviews. Its in-platform ChatGPT shopping app and AI-powered holiday gift finder show a retailer actively adapting to new discovery behaviors.
Ashley
Ashley allowed customers to shop directly through Perplexity’s AI search experience, integrating PayPal checkout — a clear acknowledgment that shopping may increasingly start outside traditional retail sites.
Amazon
Amazon expanded agentic AI for sellers, enabling automated inventory monitoring, demand analysis and shipment optimization. On the consumer side, its AI-powered “Interests” feature hints at a future where browsing is prompt-driven rather than category-based.
Levi Strauss & Co.
Levi’s partnered with Microsoft to deploy an agentic AI framework across operations, with a company-wide “super-agent” planned for 2026 — a sign that AI governance is becoming as important as AI capability.
Etsy
Etsy adopted ChatGPT Instant Checkout early and rolled out AI tools for sellers, customer messaging and personalized homepages — blending machine intelligence with human curation.
Wayfair
Wayfair’s Muse tool uses AI-generated interior images to inspire shoppers, bridging the gap between visualization and transaction — a critical challenge in home retail.
Stitch Fix
Stitch Fix Vision lets customers see AI-generated images of themselves wearing curated outfits, signaling how personalization and visualization may converge.
David’s Bridal
The retailer launched Pearl Planner, an AI-powered wedding assistant that blends task management, vendor recommendations and registries — expanding AI beyond shopping into life-event planning.
Saks Fifth Avenue
Saks deployed AI-powered customer service tools with Amazon Web Services and NLX, reducing call volume while improving order-status visibility.
Best Buy
Best Buy confirmed AI use across customer support, email marketing and product search, with leadership signaling broader agentic deployments ahead.
Guitar Center
Guitar Center’s in-store AI assistant, Rig Advisor, uses QR codes to deliver location-specific gear recommendations — blending physical retail with AI guidance.
eBay
eBay rolled out AI listing tools that generate product details from photos, along with AI-assisted buyer messaging in the U.S. and U.K.
Lowe’s
Lowe’s launched Mylow, an AI adviser developed with OpenAI, available to loyalty members and designed to answer complex project questions.
Home Depot
Home Depot introduced Magic Apron, a suite of AI tools embedded across millions of product pages to improve search and Q&A experiences.
What 2025 Really Revealed About Retail AI
Three clear patterns emerged:
•Discovery is shifting outside retailer-owned channels
•Agentic AI is replacing static search and filters
•AI is becoming infrastructure, not a feature
Retail may still trail other industries on paper, but 2025 proved something more important: AI is now shaping how consumers think about shopping, not just how retailers optimize it.
The retailers that survive the next decade won’t just adopt AI faster — they’ll design experiences that keep them relevant in an AI-first shopping world.
Source: Based on reporting from Retail Dive