Retail Analysis
PRACTICAL AI IN RETAIL
There is no denying that AI is reshaping retail at speed, but not every headline trend delivers on its promise. Here, Amber Hovious, VP of Marketing and Partnerships at Teamwork Commerce separates the noise from the substance, examining which AI innovations are driving measurable outcomes for retailers, and which remain more aspirational than actionable.
O
ver the past few years, ‘AI in Retail’ has become a buzzword dominating headlines, but it’s essential to distinguish between what’s truly transformative and what’s merely trend-driven.
Today, intelligent automation is at every level of retail operations, delivering deeper personalisation and efficiency. In PwC’s 27th Global CEO Survey, 76% of leaders acknowledge the
need for reinvention, yet many are still uncertain about where to start. Retailers that embed AI across their operations are securing a competitive advantage. With 49% of CEOs expecting generative AI to increase profitability within the next 12 months, AI has moved from an operational enhancement to a core driver of business reinvention. Retailers are embedding AI across operations. Some impactful
examples include hyper-personalisation, AI-powered inventory and forecasting, customer service, automated checkout process, fraud detection and security, AI agents, and seamless point-of-sale (POS) systems. In fact, Gartner predicts that by 2026, 80% of retail executives will have successfully implemented AI in their day-to-day operations. AI is no longer peripheral; it is core. As AI adoption accelerates, the lines between what’s hype and
reality can blur. While many AI solutions deliver measurable value, some struggle to create seamless customer experiences – often due to a lack of clarity around where AI is most valuable, such as post- purchase engagement.
AI-powered personalisation is no longer a choice Just a few years ago, AI in retail was confined to narrow use cases such as recommendation engines on e-commerce sites, basic chatbots, and some predictive analytics in supply chain planning. Fast forward to 2025, and retailers are integrating AI in every layer of retail operations.
6 | September/October 2025
From the shop floor to the back office, brands are now deploying AI to: • Deliver hyper-personalisation that moves beyond ‘customers who bought this also bought that’ to create tailored experiences across digital and physical touchpoints
• Automate inventory forecasting with models that consider weather, local events, and shifting consumer sentiment to prevent both overstock and stock-outs
• Improve customer experiences through AI-driven agents capable of handling complex queries while seamlessly escalating to human teams when needed
• Secure transactions with real-time fraud detection that learns and adapts faster than traditional rule-based systems
• Streamline the checkout process with seamless shopping experiences powered by computer vision and biometric payment
• Reimagine point-of-sale (POS) systems that integrate data across stores, e-commerce, and supply chains to give retailers a unified view of customer behaviour.
Hyper-personalisation: from novelty to necessity Customer personalisation has long been an ambition for retailers, but until recently, most approaches were generic discounts, broad segmentation, and simple product recommendations. However, advancements in generative AI tools and machine learning have made genuine hyper-personalisation possible at scale.
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