Febuary 27, 2024

Retail & AI: How Adopting AI is Changing Retail

AI depicted through connected lines and dots across retail store

According to Subramanian Kunchithapatham, Chief Technology Officer at Sensormatic Solutions, “An August 2023 report estimated that retailers would spend upwards of $7 billion on AI-enabled tools this year—and predicts that number will explode to nearly $30 billion by 2028.”

AI now impacts nearly every segment of retail. From improving the customer experience to better inventory management to more efficient warehouse storage to theft prevention, retailers are adopting AI to improve everything from operational efficiency to the shopping journey.  

One common example of AI in retail includes chatbots powered by natural language processing (NLP), and now commonplace in customer service, providing instant support to shoppers and improving overall satisfaction.

Additionally, AI-driven recommendation engines have transformed the way consumers discover products online. By analyzing past purchases, browsing history, and demographic information, these systems can offer personalized recommendations tailored to each individual's preferences, leading to increased sales and customer engagement.

Supply chain management is another area where AI is making a significant impact. Retailers are leveraging AI algorithms to optimize inventory levels, predict demand fluctuations, and streamline logistics operations, ultimately reducing costs and improving efficiency.

With these adoptions of AI and many more, come new and exciting changes across the retail landscape. 

Looking ahead, the integration of AI in retail is poised to reach new heights and to continue to change how retailers do business, customers shop, and employees work. 

Below is a list of ways AI is changing retail. 

Personalized Shopping Experiences

Today’s shoppers increasingly want more personalized experiences and AI can help deliver these. AI can analyze vast amounts of data and then use that data to target customers with suggestions that are specific to the individual, not a cohort group. 

Personalized shopping experiences are most common online and generated by companies that use AI to monitor and analyze customer data. This way, the company can create individualized online shopping experiences by suggesting items that fit the customer’s specific preferences. From there, the customer receives personalized email content and advertisements.

According to Bloomreach, customers who receive targeted ads feel more inclined to make repurchases. “78% of customers say it’s more likely to make them repurchase because they feel the organization knows them better.”

By focusing on individual preferences retailers can increase repeat buyers and loyal shoppers, plus they can monitor other data about the shopping journey to improve the overall experience. 

AI to Support Frontline Retail Workers

Robots are starting to pop up everywhere. You may have already been in a grocery store that has adopted inventory scanning robots like Tally by Simbe, or you may have visited a convenience store that has deployed a floor cleaning robot like Cobi 18, an autonomous floor scrubber by ICE Cobotics.

These autonomous solutions are powered by AI navigation systems that allow them to move around dynamic store environments and avoid obstacles. Cobi 18 for example, detects both stationary and moving objects. If an obstacle is detected the robot stops and then navigates around the object. 

By deploying robotics equipment, retailers free their staff up from mundane work like floor cleaning or inventory scanning. This allows workers to engage in more dynamic and human-centered work like customer service. It also provides retailers with a way to increase training opportunities for their staff, which can help the employee experience. 

Autonomous solutions also help retailers deal with labor issues, a common problem across the industry. Robots like Cobi and Tally help retailers deal with unexpected absences and labor shortages because they are easy to use and can be deployed by anyone on staff and left to do the job. 

This helps staff members who are on-site to complete other tasks and keep up with floor cleaning or inventory management, both of which have a significant impact on the customer experience. 

Cobi 18 by ICE Cobotics supporting frontine workers in retail store

Better Loss Prevention & Safety Programs

Retailers have long dealt with shrink (loss of inventory) due to theft but recently theft has been on the rise. According to Harrison Miller, writing for Investors.com, “Retail theft losses swelled to $112.1 billion in 2022, up 19% from $93.9 billion the year before.”

Loss of inventory due to theft is a huge drain on retailers causing them to report lower numbers than expected, negatively impacting their stock value. These losses impact the whole organization and trickle down resulting in retailers needing to cut budgets elsewhere to make up for the loss in sales. 

AI is quickly emerging as a way to help prevent theft without impacting the shopper experience. 

Risnews points out, “Computer vision, for example, which uses AI tools to monitor video feeds in real-time, can help retailers predict retail crimes based on shopper behaviors, develop evidence packages to aid in criminal investigations and highlight the gaps in security that may exist within a store.”

This can all be done without interfering with the customer experience which is important to retailers trying to create seamless shopping experiences that leave customers wanting to come back. 

Augmented Reality (AR) Shopping Experiences

Augmented Reality (AR) holds tremendous potential to revolutionize the way consumers shop because it allows them to interact with products from the comfort of their homes. Ranging from furniture to clothing, AR is changing how retailers connect with their customers.

Ulta Beauty created Glamlab for its online shoppers. With Glamlab, shoppers can try on a variety of different makeup products while browsing the website from a computer. This makes for a fun online shopping experience and allows customers to make more informed decisions about their purchases. 

“Getting complete satisfaction with online shopping increases brand trust immensely, giving retailers an immediate boost to expedite sales,” according to Fingent.

In fact, according to Fingent, “By 2025, nearly 75% of the global population and almost all people who use social or communication apps will be frequent AR users.” 

By supplying shoppers with AR experiences, retailers can offset costs from returns because customers can more accurately see the product in their environment, build a more loyal client following by creating positive experiences, and improve the customer journey by making it easier to interact with the product. 

AI makeup beauty app

Predictive Analytics for Trend Forecasting

AI-driven predictive analytics are becoming increasingly sophisticated. AI can shift through large volumes of data including historical data, current data, and other platforms like social media and news outlets to compile an unbiased analysis. 

This can help retailers better predict why and when products sell, who buys certain products, and the necessary levels of inventory to have on hand, and it enables them to anticipate future trends and consumer preferences with greater accuracy. 

According to Hrvoje Smolic, Co-Founder and CEO at Graphite Note, AI can process “data in real-time, providing businesses with real-time insights into market trends. This enables companies to make agile and data-driven decisions, leading to increased responsiveness and better business outcomes.”

By analyzing social media trends, search queries, and other relevant data sources, AI algorithms can identify emerging trends and help retailers adapt their product offerings accordingly, gaining a competitive edge in the market.


By embracing AI-powered solutions, retailers can enhance customer engagement, optimize operations, and stay competitive in an increasingly digital marketplace. As technology continues to evolve, the retail landscape will undoubtedly undergo further transformation, offering new opportunities for growth and success. Embracing AI today is not just about keeping up with the competition, it's about shaping the future of retail for generations to come.


ICE Cobotics is the leading technology and cleaning equipment company specializing in autonomous solutions available through an all-inclusive subscription. To find out more about Cobi 18, reach out to our Automation Specialists.

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