25 for ’25: NRF’s Retail-Industry Trends Forecast

Have you heard about this technology called artificial intelligence (AI)? Apparently, it’s a big deal in business – especially if you operate in the retail industry.

Kidding aside, the first three entries on the National Retail Foundation’s (NRF’s) annual list of retail industry predictions all center on AI. Here’s number one: “Generative AI will continue to revolutionize retail in 2025 by enabling hyper-personalized shopping experiences, dynamic content creation and AI-powered virtual assistants that engage customers in real-time.”

The next two AI predictions relate to more practical matters: the nuts and bolts of implementation and the need for AI governance (a capability that Vertex both promotes and adheres to). NRF indicates that widespread AI adoption “may take longer due to costs and data concerns” while emphasizing that retailers will need to overcome several AI implementation obstacles including “complex integration with existing systems and concerns around data privacy.” (By the way, Vertex’s newest AI offering, Vertex Copilot, contains features that address each of those obstacles.)

In addition to AI, NRF’s forecasts touch on other topics with implications on indirect tax compliance, including these predictions: 

• Retail will become more autonomous: The use of cashier-less stores and related “Scan and Go” technologies and processes are projected to increase markedly in the next 12 months. These CX-friendly developments will pose new POS-integration challenges as well as tax documentation challenges. Tax groups will need to ensure that audit trails are maintained during autonomous transactions. (My own, semi-related prediction: the retail industry will retain its crown when it comes to coining super-cool terms: what sector can outdo phrases like Just Walk Out or Returnuary?)
• Marketplaces continue to grow – and disrupt: The article stresses that shoppers seeking “more intuitive, conversation-driven shopping experiences” will help marketplaces thrive as larger retailers enter the space: “The cost of entry is not formidable for retailers and allows them a different option that may keep shoppers from clicking to another website.” Changing economic nexus thresholds and uncertainty concerning tax collection responsibilities will continue to pose challenges to indirect tax groups.
• Digital payments will proliferate: The article cites IntelliPay research showing that mobile and contactless payments are projected to increase by 12.4% annually during the next decade. As cashless payment options increase, indirect tax groups should ensure that existing processes and systems configurations support new payment methods in a compliant manner.
• Commerce will become more seamless: This year, “seamless commerce will be defined by a frictionless, integrated shopping experience across all channels,” according to NRF. “…Brands that excel will use data intelligently to anticipate needs and tailor experiences, enhancing convenience and satisfaction.”

As retailers work to sustain a seamless customer experience across their expanding collection of digital and physical channels, tax groups will need to ensure that tax calculations keep pace in an accurate, intelligent and agile manner.