As retailers recognize the value of artificial intelligence, the technology's future in the industry looks increasingly solid. Statista reports that retailers using AI and machine learning tend to outperform their competitors, and Gartner found that 91% of retail IT leaders are prioritizing AI as the top technology to implement by 2026. As adoption grows, a number of areas within retail are set to become more sophisticated, with AI expected to significantly reshape customer experience, analytics, and marketing strategy.
AI-powered personalized experiences
Delivering meaningful, tailored customer experiences is a priority for retailers, and AI is proving useful here. A Statista survey found that retailers plan to use generative AI to power personalized customer-service responses, digital shopping assistants, and personalized promotions to drive loyalty. Experienced retail technology providers have already started exploring this: last year, Teamwork Commerce partnered with Google Cloud to develop new generative AI features for its Mobile Point-of-Sale and Order Management System. Ultimately, the value has to reach the customer. PwC found that 70% of CEOs believe generative AI will significantly change how their companies create, deliver, and capture value over the next three years.
As retailers lean into AI, they need to balance AI-powered personalization with human-led interaction. Customers still want the human touch as part of their shopping experience, and AI works best when it's used to automate repetitive tasks and keep staff better informed, not replace the people on the floor.
Improved analysis and forecasting
A 2023 Statista survey found that predicting customer behavior and improving the shopping experience were the most common reasons professionals gave for using AI, cited by 60% of respondents. AI-powered tools can quickly analyze large volumes of data and turn it into actionable insight, though retailers need to feed it accurate, up-to-date data in real time to get reliable results. Modern inventory management systems that provide real-time visibility help make that possible. With a few years of historical data, retailers can identify trends and best-selling items for specific periods, preparing inventory ahead of demand rather than reacting to it, while also analyzing individual customer profiles to create personalized discounts for loyal shoppers.
Targeted marketing and advertising
From A/B testing to content creation, AI already helps marketers automate tasks and build campaigns more efficiently, and its role keeps expanding. Using data analytics, AI can segment customers by purchase history and browsing behavior, then predict future behavior based on those patterns, letting retailers target campaigns toward the groups most likely to convert. AI can also identify which campaigns are performing best, helping marketers allocate budget toward what's actually working. On top of that, AI can analyze social media conversation to gauge public sentiment about a brand or product, letting marketing teams adjust campaigns in step with how the market is actually feeling.