AI Unveiled: The Silent Transformation of Retail
The buzz around “experiential retail” trends like smart fitting rooms and gamification often grabs headlines, but the real revolution is happening behind the scenes. As Christian Floerkemeier, CTO and co-founder at Scandit, reveals, AI’s impact in 2025 goes far beyond the flashy tech.
While those technologies may not be widespread, the retail industry is undergoing a quiet yet profound transformation, with AI at the forefront of making shopping experiences more seamless and personalized.
The Many Roles AI Plays in Retail
Consumer surveys consistently highlight personalization as a top priority. McKinsey data shows that a staggering 76% of consumers are frustrated when it’s missing. AI-powered algorithms use customer data to offer customized shopping experiences. This translates to store associates confidently saying, “Based on your past purchases, you might also like this.” Customers, in turn, receive tailored products, pricing, and promotions. Adobe’s findings suggest that many shoppers are prepared to spend more when experiences are customized, boosting sales.
Forecasting is another area where AI excels. By analyzing historical sales, market trends, seasonal patterns, and external factors like weather and events, AI algorithms can predict future demand. This enables retailers to maintain optimal stock levels, minimizing the risk of overstocking or running out of popular items.
AI coupled with computer vision also provides real-time inventory updates. It is estimated that on average, 35% of inventory is inaccurate in U.S. retail. To improve this, retailers are integrating AI into their store devices and sensors, allowing customers to know in advance if an item is available in store.
Generative AI chatbots and virtual assistants are playing a key role, providing 24/7 support and assisting with purchases on retailers’ websites.
Navigating Volatility: AI as a Stabilizer
While Bain projects a 4% increase to $5.2 trillion for U.S. retail sales in 2025, the road ahead is uncertain. Retailers face unpredictable challenges, from economic fluctuations to regulatory changes. AI offers a tool to navigate this volatility. By harnessing innovation, retailers can not only meet but exceed shoppers’ expectations for seamless, personalized experiences. AI allows retailers to be at the forefront, informed and making better decisions.
Walmart is an example of AI’s potential. AI helps the company stock shelves based on predicted demand and determine optimal promotions. Walmart can also deliver targeted ads to drive customers to its stores and websites, where associates and chatbots are ready to answer questions, check availability, and offer personalized recommendations. This is just the beginning.
The Tailored Future: AI-Enhanced Shopping Experiences
Looking ahead, AI holds even more transformative potential. From real-time dynamic pricing and targeted marketing to AI-powered augmented reality experiences like virtual try-ons, AI is poised to reshape the customer shopping journey. Consumers want blended experiences. As AI continues to evolve, it promises greater convenience and personalization, ultimately revolutionizing the industry in 2025 and beyond.
