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Since we launched Microsoft 365 (formerly Office 365) to consumers in 2013, we’ve steadily delivered new apps, features, and benefits to our subscribers. These include advanced security with Microsoft Defender, creative tools like Microsoft Clipchamp, and countless enhancements to Word, Excel, PowerPoint, OneNote, and Outlook.
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Our ambition is to empower every employee with a Copilot and to transform every business process with agents. From Dow to Disney, companies are going big with Microsoft 365 Copilot and agents, uncovering key scenarios that can deliver real ROI.
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This week, thousands of professionals will gather at the National Retail Federation (NRF) 2025: Retail’s Big Show, for insights into the changing retail landscape. Top of mind for many attendees is how AI will impact the retail industry. What retail-specific AI innovation is on the horizon, and can those solutions solve the myriad of challenges retailers face, from improving customer experiences to meeting customer demand on time?
In 2025, the retail industry will be shaped by three transformative trends that will set the pace of growth and success in the evolving retail landscape:
delivering hyper-personalized customer experiences across physical and digital channels.
redefining convenience through innovative fulfillment and flexible shopping options.
embedding sustainability and ethical sourcing at the heart of business strategies.
At the Microsoft expo booth and our featured session, NRF attendees will learn how organizations can achieve these priorities by infusing AI across every business process and workflow—within both customer-facing and backend operations.
By integrating AI solutions like Microsoft Copilot and agents within ERP systems—the traditional foundation for managing critical business processes—retailers can scale the delivery of personalized customer experiences and flexible shopping options.
In addition, Microsoft will demonstrate at NRF how agents in Dynamics 365 ERP system solutions autonomously manage workflows and orchestrate processes across various domains, including customer journey, procurement, service and operations. These agents make data-driven decisions, optimize operations in real-time, and enhance productivity by automating routine tasks. This allows employees to concentrate on strategic priorities, thereby improving efficiency, cost savings, and relationships with customers and suppliers.
Delivering better customer experience
Dynamics 365 delivers AI capabilities that enable retailers to hyper-personalize customer experiences across physical and digital channels.
Transforming the shopper’s journey
With Dynamics 365, retailers can analyze vast amounts of customer data to better understand customer preferences and behaviors. This will enable them to deliver personalized shopping experience. Based on a 2025 CIO and Technology Executive survey by Gartner®, there will be an increase of retail respondents by 67% in 2025 to invest in in-store generative AI technology for associates and an increase of 60% to invest in in-store generative AI technology for customers.1
Retailers like Venchi are piloting the Personalized Shopping Agent in Dynamics 365 to enable their in-store associates to quickly surface product recommendations based on the customer’s preferences at checkout. With instant, tailored suggestions, it could not only enhance the overall shopping experience but also increase the basket value while improving brand loyalty.
Seamless omnichannel experience
Today’s customers expect a seamless shopping experience across all channels. Dynamics 365 AI-powered ERP systems integrate inventory and customer data from physical stores, online platforms, and mobile apps into a unified system. This integration ensures that customers receive consistent service and accurate information, regardless of how they choose to shop.
Lighting retailer Visual Comfort & Co. created a unified platform across 53 showrooms, a robust online store, manufacturing, and shipping with Dynamics 365 ERP system solutions; helping them to streamline operations and improve visibility across the complex supply chain. With real-time inventory visibility, their showroom associates can promise order availability and delivery accurately.
Turning fulfilment into a competitive advantage
With agents and Dynamics 365, retailers can redefine convenience through innovative fulfillment and flexible shopping options.
Proactively mitigate supply chain disruptions
It is paramount for retailers to prevent stock out and ensure on-time delivery to their customers to improve retention and loyalty. With frequent supply chain disruptions globally, retailers need to constantly stay in touch with their suppliers or contract manufacturers to proactively identify delays. The Supplier Communications Agent in Dynamics 365 autonomously processes supplier confirmations, flags potential delays, and suggests corrective actions to help ensure that customer orders are delivered on time.
With the agent automating these critical tasks, supply chain teams can focus on improving supplier relationships and contract negotiations resulting in reduced costs and more efficient procurement processes.
Flexible and fast fulfilment
Retailers like Build-A-Bear use Dynamics 365 to optimize fulfillment and offer a seamless shopping experience. They use stores as mini warehouses to fulfil orders faster, and with enhanced inventory visibility they can help ensure that their products are available when and where customers need them. They are able to offer flexible shopping options like Buy Online, Pick Up In Store (BOPIS) and Buy Online, Ship From Store (BOSFS) to their customers for more convenience. Additionally, the implementation of Dynamics 365 has led to a 28% reduction in processing days, significantly boosting warehouse productivity and enabling faster order fulfillment. These innovations allow Build-A-Bear to meet the evolving needs of today’s consumers, providing a more efficient, reliable, and flexible shopping experience.
Ethical sourcing and sustainability
In 2025, retailers are increasingly committed to embedding sustainability and ethical sourcing at the heart of business strategies. Sustainability features in Dynamics 365 solutions can help retailers comply with the latest standards and best practices, as well as drive positive changes for the business and the environment.
Enable recommerce and drive sustainable practices
AI-powered Dynamics 365 ERP systems help retailers to monitor and implement sustainable practices such as circularity. This enables them to run take-back programs for reselling, reusing, or recycling products to extend their lifecycle and reduce waste. Additionally, the order orchestration engine in Dynamics 365 helps retailers like ONLY, one of BESTSELLER’s largest fashion brands, to support sustainability goals by choosing fulfillment options that minimize carbon emissions while also helping to ensure orders are delivered on time and profitably. Along with the ability to buy online and return in-store, ONLY customers have the most environmentally friendly shipping options available.
Ethical supplier management
AI capabilities in Dynamics 365 ERP systems can help enhance ethical sourcing by managing vendor compliance, enforcing procurement policies, and supporting multisource strategies. One of our partners, Columbus, implemented Dynamics 365 ERP solutions at their customer Devold of Norway to help them deliver premium quality woolen products to their consumers. They now have a modernized cloud platform and are looking for ways to further improve traceability of their products so that their consumers know where the products come from. These solutions offer transparency and traceability for product origins and provides sustainability reporting to monitor and improve practices—ensuring your procurement aligns with ethical standards.
Future-proof your retail operations in 2025
AI-powered solutions for ERP and service systems are more than a technological upgrade. They are a strategic imperative for retailers aiming to deliver exceptional customer experiences, build lasting brand loyalty, and achieve sustainable profitability. In today’s business landscape, you need autonomous systems that can anticipate market changes, customer needs, or operational risks. The risk of clinging to legacy systems extends beyond inefficiency. It leads to missed opportunities, slower time-to-market, and the inability to remain competitive. Companies using AI-first processes through AI-powered solutions for ERP systems gain the foresight and agility necessary to not just react to changes but to lead through them.
Join us at NRF ‘25
If you are registered for NRF, we invite you to visit the Microsoft booth (#4503) and join Kathleen Mitford, Microsoft’s Corporate Vice President, Global Industry Marketing, as well as leaders at Bath & Body Works, Venchi and Sitecore as they share their perspectives on transforming the shopper journey with AI. The session will take place on Monday, January 13, 2025 at 11AM EST.
Also, continue to visit the Dynamics 365 blog to learn more about how Dynamics 365 and Microsoft Power Platform are helping retailers reimagine the road ahead; and feel free to contact us to learn more about the Dynamics 365 AI-powered ERP system solutions.
Source
1Gartner, 2025 CIO Agenda: Top Priorities and Technology Plans for Retail, 16 September 2024 By Kelsie Marian, Sandeep Unni. GARTNER is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally and is used herein with permission. All rights reserved.
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Delivering amazing customer experiences and rapid issue resolution across multiple engagement channels is immensely challenging. Without advanced AI and automation—across voice and digital channels—customer journeys meet friction and service reps struggle to work efficiently, leading to spiraling costs and dwindling customer loyalty.
However, when customers and service reps are supported with AI-powered automation and contextual guidance, the experience is smoother for everyone, whether it’s in self-service or assisted service.
2024 Gartner Magic Quadrant for CRM Customer Engagement Center
Microsoft has been recognized as a Leader.
As we enter this new era of AI-fueled customer service, we’re proud to announce that Microsoft has been named a Leader in the 2024 Gartner Magic Quadrant* for CRM Customer Engagement Center.
We believe this placement recognizes our comprehensive AI-powered omnichannel capabilities, our continued commitment to rapid AI innovation, and the successes our global customers are achieving with Microsoft Dynamics 365 Customer Service.
Gartner defines CRM customer engagement center (CRM CEC) as a cohesive set of software built around core case management tools used to provide customer service and support by engaging with customers, while intelligently orchestrating the processes, data, systems, and resources of an organization. CRM CEC applications also offer workflow management capabilities and may be used as a system of record for customer interactions.
AI fuels customer service excellence
Customer service leaders understand that resolving customer issues is not the sole measure of success. Long-term customer loyalty depends on the ability to deliver fast, personalized experiences in every engagement channel. That’s why it’s so important that Customer Service provides comprehensive, AI-enhanced capabilities across omnichannel customer journeys and throughout service processes—on a global scale.
By delivering intelligent self-service and giving service reps the tools and insights to boost productivity, fuel collaboration, and strengthen customer relationships, we help service organizations transform operations and increase customer satisfaction. What’s more, with Microsoft Copilot in Customer Service, organizations can now take their service capabilities to new heights.
Since Microsoft introduced Copilot into the applications millions of people use every day, its generative AI capabilities have empowered people to achieve more—and that’s especially true in customer service.
Copilot is one of the capabilities that sets Customer Service apart. It provides an AI assistant to help service reps onboard faster, accelerate resolutions for even the most complex cases, and free up time to build stronger customer relationships.
Service reps worldwide now rely on Copilot to handle routine tasks—such as accessing knowledge, summarizing, and drafting personalized emails—releasing them to focus on delivering high-value engagements that build customer satisfaction and loyalty.
Lenovo increases service rep productivity by 15% and reduces average handle time by 20%
One organization that is seeing the benefits of Copilot in its customer service operations is the global technology company Lenovo. The company’s Premier Support services give customers access to thousands of advanced technicians to resolve issues and minimize downtime.
To keep pace with growing demand, Lenovo needed automated, AI-based solutions that could streamline operations, automate repetitive tasks, and boost customer satisfaction. The company uses Customer Service and Microsoft Dynamics 365 Contact Center to enhance the support experience for customers and service reps.
When a customer reaches out for support, they interact with Copilot in an AI chat assistant to explain their issue in natural language. Copilot then offers service reps suggestions for optimal solutions, based on millions of historical customer interactions, so reps spend less time finding information and can focus on resolving the issue. Copilot also completes post-call summarization, saving reps even more time.
The results are a 15% improvement in service rep productivity, a 20% reduction in average handling time, and record-high customer satisfaction.
“Our Premier Support service reps are seeing a boost to their productivity and seamless service delivery…average handling time has fallen by 20% and agent productivity is up 15%.”
Chen Lu, Director, Services IT Delivery, Lenovo
Apollo helps customers have smoother journeys
It’s a similar story at Apollo, a major tour operator in the Nordic region, which is using Copilot to help enhance the customer experience for more than one million travelers a year.
The company has built a chatbot in Microsoft Copilot Studio that it expects to respond to up to half of its customer inquiries, providing tailored answers in seconds in Swedish, Finnish, Norwegian, Danish, and Dutch. When cases need to be escalated to a human service rep, Copilot can assist by surfacing relevant information at the right time and completing routine administrative tasks such as call summarization.
“It is always our goal to provide our customers with the journey of a lifetime. Thanks to [Microsoft] Dynamics 365, we can offer each customer personalized experiences with the details that matter most—and we can do it quickly, which is a win for our customers and our business.”
Glenn Bisgaard, Sales Director, Apollo
Copilot and Agents: The next evolution of AI-fueled customer service
Building on the capabilities of Copilot, we’re now introducing AI agents in Copilot, as well as empowering organizations and individuals to create their own agents in Copilot Studio. These agents help transform operations by executing business processes, working alongside or on behalf of a person, team, or organization.
Copilot agents range from simple information retrieval and summarization agents to fully autonomous agents capable of working independently, planning, and orchestrating other agents.
Over the next few months, we’ll be releasing several autonomous agents specifically for enhancing customer service:
The Customer Intent Agent continuously discovers new intents from customer conversations and keeps self-service tools and service reps updated with new customer issues and how to resolve them.
The Customer Knowledge Management Agent uncovers insights from human-assisted case notes, transcripts, summaries, and more to update existing knowledge articles or draft new ones, keeping self-service tools evergreen and empowering service reps with up-to-date knowledge and guidance.
The Case Management Agent reduces reps’ administrative burden and shortens handle times by automating key tasks, including case creation, updates, wrap-up, summary, follow-up communications, and closure.
We’re thrilled to be recognized as a Leader in the Gartner Magic Quadrant, and we’re equally excited about what the future holds as we continue to advance the capabilities of Customer Service. But most importantly, we look forward to seeing the results as we work alongside our pioneering customers to help them deliver even more efficient and effective customer service.
Next steps
Read the 2024 Gartner Magic Quadrant for CRM Customer Engagement Center report.
1Gartner, Magic Quadrant for CRM Customer Engagement Center, ,
*Gartner is a registered trademark and service mark and Magic Quadrant is a registered trademark of Gartner, Inc. and/or its affiliates in the U.S. and internationally and are used herein with permission. All rights reserved. Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner’s research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.
**This graphic was published by Gartner, Inc. as part of a larger research document and should be evaluated in the context of the entire document. The Gartner document is available upon request from Microsoft.
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Imagine a large retailer with a contact center that supports customers who speak multiple languages. Previously, they needed separate bots for each language, making things complicated and slowing down deployments. Now, with multilingual voice agents, the retailer can handle all customer calls using one phone number, easily switching languages mid-call based on customer input.
That is why we are excited to announce support for multilingual voice agents authored with Copilot Studio for the Dynamics 365 Contact Center voice channel. This new feature expands Copilot Studio’s capabilities from messaging to voice interactions, enabling businesses to handle calls in multiple languages using a single bot.
Simplified multilingual support
Voice agents are IVR bots that leverage the capabilities of Copilot Studio. With multilingual voice agents, contact centers no longer need separate bots for each language. A single voice agent can support multiple languages, leverage unified business logic and integrations, and be deployed across all languages with just one click. This can help organizations to:
Lower TCO: Managing one bot reduces maintenance complexity because updates are centralized rather than spread across several language-specific bots.
Accelerate deployment: Updates and new features are deployed to all languages simultaneously, accelerating the overall rollout process.
Improve CSAT: Customers can switch languages mid-call without needing to dial different phone numbers, offering a more personalized and seamless experience.
Key scenarios
The multilingual voice agents support two key scenarios for managing voice interactions in different languages.
Mid-call language switch
In multilingual regions, a single phone number serves all customers. The voice agent can switch languages mid-conversation based on user input, such as selecting a language from a menu. Designers must localize content for each supported language and manage the logic-switching within Copilot Studio.
Language based on dialed number
Alternatively, to start the conversation in the language based on the dialed number, the contact center admin can assign dedicated phone numbers for each language, leveraging a single voice agent. When a customer calls, the voice agent initiates the conversation in the correct language, delivering a seamless experience as long as the bot supports the voice channel’s primary language.
Copilot Studio voice agent languages settingContact Center admin center voice channel setup with multiple languages
Escalation to a service representative
When the voice agent can’t resolve a customer’s query, or when the customer requests human assistance, administrators can configure routing rules to escalate the call to a customer service representative queue matching the conversation’s language. This feature ensures the service representative continues the conversation seamlessly in the customer’s preferred language, improving the overall customer experience.
Streamlining the experience
This simplification reduces operational complexity and costs while boosting CSAT, as customers no longer need to memorize different numbers for language-specific support. Moreover, if a customer requests to speak with a service representative, the system can route the call to a service rep fluent in the appropriate language, ensuring a smooth handoff.
Learn more
For a complete list of languages supported by Copilot Studio, visit the supported languages page. This article provides details on languages supported by voice agents, helping bot designers in planning effective multilingual customer service.
These articles guide administrators through the detailed steps for voice agent configuration and localization, ensuring smooth deployment of multilingual voice agents with Copilot capabilities in the voice channel.
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Every organization is looking to maximize their AI ROI, and we want to help. Each month, we’ll share how customers are using Microsoft 365 Copilot and agents to transform work and business processes, along with highlights of the latest Copilot innovations. Let’s dig in.
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