While artificial intelligence, or AI if you prefer, is not an entirely new concept to retailers, the way it is being used and rolled out in shops and stores, as well as online, is changing at a rapid pace.
From the use of chatbots to direct customers to the correct department while shopping on their mobile device or computer, through to sophisticated inventory management that helps retailers operate easier, the potential for AI in retail is far-reaching.
Here, Retail Focus sits down with several experts in this field to find out more about the key benefits of adopting AI within retail settings and how shops and stores of all shapes and sizes can utilise this technology to improve both their own operations and the customer experience.
Critical tool for survival and growth
First up is Ipsotek, a pioneer in the field of AIVA, otherwise known as artificial intelligence video analytics, and scenario-based intelligent video analytics. Global marketing manager Rayan Cherri said retail is undergoing a rapid digital transformation, driven by evolving consumer expectations and increased competition. As such, AI can no longer be regarded as a futuristic concept, but instead a critical tool for survival and growth.
“By incorporating AI into their strategies, retailers can unlock valuable insights from vast amounts of data, optimise operations from supply chain to in-store experiences, and deliver highly personalised offerings that resonate with customers,” Cherri explained. “This ability to anticipate customer needs, streamline processes, and enhance customer satisfaction is essential for staying ahead in today’s dynamic market.
“AI offers a wide range of benefits for retailers. For instance, in eCommerce, AI-powered tools can analyse online shelf performance, tracking competitors and identifying opportunities.
“In physical stores, Computer Vision is transforming operations and providing new revenue streams. By analysing video footage in real time, retailers can optimise store layout, manage queues, enhance customer engagement, all whilst maintaining safety, security and privacy.”
Glancing ahead to the future, Cherri believes AI will fundamentally reshape the retail landscape. She explained consumers will come to expect faster service, personalised experiences, and frictionless shopping as AI drives operational efficiency. With this, she said stores are likely to become smarter spaces, leveraging AI to optimise resources and improve overall operations, which in turn will mean stronger customer loyalty.
“Computer vision will play a crucial role in creating an ideal shopping environment and enhancing customer satisfaction,” she said. “Ultimately, AI will empower retailers to make data-driven decisions and stay ahead of the curve.”
However, with this, Cherri also offered words of warning in terms of consumers becoming increasingly concerned about how their data is collected, used, and protected. She explains that retailers must prioritise transparency and accountability in their AI initiatives.
“For example, computer vision providers understand the critical importance of data privacy. The technology is therefore designed with robust privacy safeguards, ensuring that customer data is handled ethically and securely,” Cherri said.
“It’s essential for retailers to choose AI partners who share such values and can demonstrate a commitment to privacy and data protection. By prioritising these aspects, retailers can harness the power of AI while safeguarding customer trust.”
Immense opportunities
Up next is TradeBeyond, which, previously known as CBX Software, offers solutions to help simplify the business of global sourcing and supply chains. Senior vice president Eric Linxwiler recognises that brands and retailers are understandably eager to leverage AI in their supply chain operations, but many have not yet created the digital infrastructure to do so.
“One major obstacle preventing businesses from realising AI’s potential is the lack of organised, centralised, real-time data,” he said. “To overcome this, companies need to start creating a central repository of supply chain data at the PO, SKU, and factory levels.
“The foundation for optimising the benefits of AI for any organisation lies in the ability to interconnect thousands of proprietary data points from multiple data sets across your enterprise. That requires aggregating all data from early-stage planning through the creation of product specifications, onto sourcing, costing, and logistics, and including detailed information on all suppliers along the supply chain up to the Nth tier. It’s only once businesses have established effective data management that they can begin unlocking AI’s full potential.”
Linxwiler went on to say that for years, AI has been anticipated to be a game-changer in retail, and now it is fully arriving in the supply chain sector, is is creating transformative impacts almost overnight.
“This technology, along with its ever-increasing use cases for supply chain operations, is rapidly bringing speed and efficiency to a new level,” he said. “It is also becoming a critical component of the drive toward sustainability, as tightening global legislations have made it increasingly difficult to maintain compliance and efficiency without sophisticated digital systems. For example, by optimising routes and inventories, AI helps reduce unnecessary fuel consumption and waste.”
Thank you very much, Mr Roboto
On the subject of examples, Linxwiler offers several as to how AI is impacting retail. Walmart and Amazon are using AI-powered robots in fulfilment centres to manage inventory, process orders, and optimise storage space, while both brands are also utilising predictive analytics to forecast demand, ensuring products are available when and where they are needed.
Elsewhere, Linxwiler said Zara is similarly using AI for demand forecasting and inventory management, analysing sales data, social media trends, and other data sources to predict fashion trends more accurately and adjust accordingly, minimising overproduction and stockouts.
“As retail stands on the brink of a digital revolution powered by AI, the opportunities for transformation are immense,” Linxwiler added. “Retailers that can effectively integrate AI into their supply chains will not only achieve greater operational efficiencies but will also gain competitive advantages in agility, customer satisfaction, and sustainability.
“To fully capitalise on AI’s growing potential, brands and retailers must prioritise the digitalisation of their supply chain now or risk missing out on critical advancements and falling behind industry leaders.”
Paving the way for modern payments
Another aspect of retail benefitting from AI is payment. Kevin Carson, senior vice president of FreedomPay, a specialist in payment technology, said AI offers a powerful toolkit for retailers to not just survive but thrive.
“By integrating this rising technology into their strategies, retailers can unlock benefits that directly impact their bottom line, including significantly enhancing the payment experience for brands and their customers,” Carson said.
“AI elevates the customer experience from generic to genuinely personalised. The customer feels personally catered to through AI-powered recommendations, targeted offers and engaging content tailored to their preferences.
“Beyond personalisation, AI-powered chatbots provide instant and helpful customer service around the clock, resolving issues quickly and efficiently. This extends to payments as well, where AI can enable frictionless checkout experiences at any time of day, personalised payment options and even proactive fraud prevention that protects both the customer and retailer.”
Building on this, Carson said AI is bolstering security by detecting and preventing fraudulent transactions in real-time. He explained FreedomPay is at the forefront of this AI revolution in retail payments, evidenced by its partnership with Mashgin to power a fast, touchless self-checkout solution.
“This AI-powered solution leverages computer vision to instantly identify and price items, eliminating the need for manual scanning and expediting the checkout process,” Carson said.
Currently, FreedomPay offers a comprehensive Business Intelligence (BI) engine as part of its platform. This tool integrates with the payment system to provide detailed insights into transaction data and customer behaviour through real-time analytics, customisable dashboards, reporting tools, data visualisation and integration with other business systems.
“The future of retail payments will be defined by invisible transactions powered by sophisticated AI,” Carson said. “Beyond simply recommending products, AI algorithms will analyse purchasing patterns and preferences to create hyper-personalised checkout experiences. Biometric authentication, such as gait analysis or voice recognition, will supersede traditional payment methods, allowing customers to authorise secure transactions with their presence alone.
“This level of personalisation will extend to payment plans and loyalty rewards, which will be dynamically generated based on individual spending habits and risk profiles. Real-time analysis will enable retailers to offer customised financing options for high-value items, further blurring the lines between online and offline shopping. Coupled with robust AI-driven fraud detection, these advancements promise a future of effortless and worry-free payment experiences.”
This offers a suitable conclusion to the discussion. Though still in its relative infancy in the grand scheme of things, AI has the potential to benefit both retailers and consumers in a host of ways. Working with experts in the field will allow retailers to capitalise on new and evolving technologies to deliver an improved experience to shoppers across all channels.
