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Innowise är ett internationellt företag för utveckling av mjukvara med fullständig cykel som grundades 2007. Vi är ett team med över 1800+ IT-proffs som utvecklar mjukvara för andra yrkesverksamma över hela världen.

AI in retail: top use cases, examples

Let’s walk into a retail store that knows exactly what you need. Smart cameras adjust displays based on what catches shoppers’ attention, while digital shelves update prices and promotions in real-time. Interactive kiosks offer personalized recommendations, and fitting rooms with AR mirrors let you “try on” clothes virtually. When you’re ready to leave, there’s no checkout line — AI-powered systems automatically charge you for the items you take. Behind the scenes, AI manages inventory and predicts demand to keep everything running flawlessly.

It’s a shopping process reimagined by AI that most retailers have already provided. In this article, we’ll look at how AI transforms retail and the opportunities it creates.

Artificial intelligence in retail: market overview

$54.92 bln is expected to reach by AI in the retail market by 2033
18.6% CAGR is anticipated for AI in retail market from 2024 to 2033
80% of retailers anticipate adopting AI by 2025

Top AI use cases in retail

  • Visual merchandising
  • Prognostisering
  • Product design and development
  • Personalized marketing
  • Bedrägeribekämpning
  • Lagerhantering
  • Försörjningskedja och logistik
  • Security and automation in shopping malls
  • Voice-activated transactions
  • Sustainability and green retailing

Visual merchandising

Did you know Walmart uses computer vision to create heat maps showing which store areas are the most popular? Why is it super cool? This map data allows for evaluating how their display is attractive to customers and how it influences their shopping decisions. In general, AI in visual merchandising contributes to more engaging in-store experiences while optimizing goods' visual presentation and increasing store profitability. This refers to using software based on ML algorithms, computer vision, predictive analytics, and other AI tools.

Visual merchandising

Prognostisering

Traditional demand forecasting (past sales numbers, average sales, or seasonal patterns) often struggles when there are unexpected changes, like a sudden surge in popularity for a product or a shift in customer preferences. As it frequently happens now, AI is there with its machine learning algorithms. It's capable of analyzing vast data sets and delivering much more accurate forecasts. The best news here is it can adapt to new information and adjust predictions — allowing retailers to better anticipate future revenue.

Prognostisering

Product design and development

AI gathers tons of data, such as information on sales, customer reviews, product photos, and market trends. These data are then processed using ML. AI proceeds to find patterns and, possibly, any links between styles and colors according to customer preferences. Using these patterns, AI produces new models and designs that can be further analyzed and selected. The most engaging ones, considering current trends, are delivered to developers or marketers.

Product design and development

Personalized marketing

Data power! This is what AI harnesses to tailor these pivotal aspects — product, place, price, and promotion — that are the foundation of a quality personalized marketing strategy. One of the coolest examples of how AI helps build personalized retail marketing is Nike. They use customer feedback from surveys and their loyalty program to create custom profiles with fitness goals and style preferences. This data enables tailored product recommendations and exclusive events for members, fostering customer loyalty.

Personalized marketing

Bedrägeribekämpning

Fraud protection is something any business can't compromise on. The more data volume, the bigger the need to safeguard it at the highest level. AI can help. AI-powered fraud detection systems can identify suspicious patterns and anomalies that may indicate fraudulent activity. They are trained on past cases, allowing them to remember what actions led to fraud and adapt to new deception methods. If the system detects something suspicious, it can notify the security team or automatically block the transaction.

Bedrägeribekämpning

Lagerhantering

Well-arranged inventory management makes working with suppliers smoother and allows for better predictions of what people will buy and when. And we know that when customers are happy, they come back for more, which, indeed, helps a business grow and be competitive. Intelligent AI-powered inventory management is a great choice here. With its accurate demand forecasting, automated inventory replenishment, and optimized pricing strategies, it easily minimizes costs and maximizes customer satisfaction.

Lagerhantering

Försörjningskedja och logistik

AI in the retail industry helps optimize logistics processes by finding the most efficient route planning for deliveries based on traffic patterns and delivery windows. Using AI-driven predictive analytics allows retailers to anticipate disruptions in the supply chain, such as delays from supplier issues or natural disasters. This leads to increased efficiency, superior responsiveness to changing market circumstances, and agility in the retail environment.

Försörjningskedja och logistik

Security and automation in shopping malls

With facial recognition, real-time monitoring, and license plate tracking, AI-equipped cameras improve both security and management efficiency in shopping malls. Integrated systems allow customers to receive real-time updates on parking availability and traffic while offering personalized store experiences. In addition, AI systems simplify parking management with automated payments and vehicle tracking.

Security and automation in shopping malls

Voice-activated transactions

AI-powered voice assistants integrate with retailers' platforms to let customers search hands-free for products, place orders, and manage transactions. This convenience will elevate the shopping experience and bring in vital data regarding consumer preferences. The best example of how it successfully works in retail is Amazon and its Alexa-powered transactions. A customer can say, “Alexa, reorder my favorite laundry detergent,” and the transaction is completed without needing to navigate through the app.

Voice-activated transactions

Sustainability and green retailing

Generative AI in retail makes it greener in several ways. First, it optimizes inventories based on demand analyses. Consequently, it cuts down surplus stock and product waste. For example, a store will place an order for those numbers of products that are actually needed to prevent spoilage. Secondly, AI measures energy consumption within the stores and controls lighting and heating, thus economizing on electricity.

Sustainability and green retailing
Visual merchandising

Did you know Walmart uses computer vision to create heat maps showing which store areas are the most popular? Why is it super cool? This map data allows for evaluating how their display is attractive to customers and how it influences their shopping decisions. In general, AI in visual merchandising contributes to more engaging in-store experiences while optimizing goods' visual presentation and increasing store profitability. This refers to using software based on ML algorithms, computer vision, predictive analytics, and other AI tools.

Visual merchandising
Prognostisering

Traditional demand forecasting (past sales numbers, average sales, or seasonal patterns) often struggles when there are unexpected changes, like a sudden surge in popularity for a product or a shift in customer preferences. As it frequently happens now, AI is there with its machine learning algorithms. It's capable of analyzing vast data sets and delivering much more accurate forecasts. The best news here is it can adapt to new information and adjust predictions — allowing retailers to better anticipate future revenue.

Prognostisering
Product design and development

AI gathers tons of data, such as information on sales, customer reviews, product photos, and market trends. These data are then processed using ML. AI proceeds to find patterns and, possibly, any links between styles and colors according to customer preferences. Using these patterns, AI produces new models and designs that can be further analyzed and selected. The most engaging ones, considering current trends, are delivered to developers or marketers.

Product design and development
Personalized marketing

Data power! This is what AI harnesses to tailor these pivotal aspects — product, place, price, and promotion — that are the foundation of a quality personalized marketing strategy. One of the coolest examples of how AI helps build personalized retail marketing is Nike. They use customer feedback from surveys and their loyalty program to create custom profiles with fitness goals and style preferences. This data enables tailored product recommendations and exclusive events for members, fostering customer loyalty.

Personalized marketing
Bedrägeribekämpning

Fraud protection is something any business can't compromise on. The more data volume, the bigger the need to safeguard it at the highest level. AI can help. AI-powered fraud detection systems can identify suspicious patterns and anomalies that may indicate fraudulent activity. They are trained on past cases, allowing them to remember what actions led to fraud and adapt to new deception methods. If the system detects something suspicious, it can notify the security team or automatically block the transaction.

Bedrägeribekämpning
Lagerhantering

Well-arranged inventory management makes working with suppliers smoother and allows for better predictions of what people will buy and when. And we know that when customers are happy, they come back for more, which, indeed, helps a business grow and be competitive. Intelligent AI-powered inventory management is a great choice here. With its accurate demand forecasting, automated inventory replenishment, and optimized pricing strategies, it easily minimizes costs and maximizes customer satisfaction.

Lagerhantering
Försörjningskedja och logistik

AI in the retail industry helps optimize logistics processes by finding the most efficient route planning for deliveries based on traffic patterns and delivery windows. Using AI-driven predictive analytics allows retailers to anticipate disruptions in the supply chain, such as delays from supplier issues or natural disasters. This leads to increased efficiency, superior responsiveness to changing market circumstances, and agility in the retail environment.

Försörjningskedja och logistik
Security and automation in shopping malls

With facial recognition, real-time monitoring, and license plate tracking, AI-equipped cameras improve both security and management efficiency in shopping malls. Integrated systems allow customers to receive real-time updates on parking availability and traffic while offering personalized store experiences. In addition, AI systems simplify parking management with automated payments and vehicle tracking.

Security and automation in shopping malls
Voice-activated transactions

AI-powered voice assistants integrate with retailers' platforms to let customers search hands-free for products, place orders, and manage transactions. This convenience will elevate the shopping experience and bring in vital data regarding consumer preferences. The best example of how it successfully works in retail is Amazon and its Alexa-powered transactions. A customer can say, “Alexa, reorder my favorite laundry detergent,” and the transaction is completed without needing to navigate through the app.

Voice-activated transactions
Sustainability and green retailing

Generative AI in retail makes it greener in several ways. First, it optimizes inventories based on demand analyses. Consequently, it cuts down surplus stock and product waste. For example, a store will place an order for those numbers of products that are actually needed to prevent spoilage. Secondly, AI measures energy consumption within the stores and controls lighting and heating, thus economizing on electricity.

Sustainability and green retailing

We deliver solutions that boost your revenue and wow your customers!

AI in retail: examples of successful implementation

Walmart began deploying generative AI chatbot technology in 2021 after a successful pilot in Canada. The chatbot negotiated with suppliers on terms like pricing, payment schedules, and assortment growth. Walmart also utilizes chatbot technology in customer-facing services like its “text-to-shop” feature and internal tools like “Ask Sam.”

The company has introduced Hopla, a chatbot on Carrefour.fr that assists shoppers with personalized product recommendations and anti-waste solutions. Carrefour is also using AI to enrich product descriptions on its website and is applying generative AI to simplify internal purchasing tasks, such as drafting tender invitations and analyzing quotes.

Unilever is transforming the beauty retail industry with AI-driven tools. Their BeautyHub PRO, for instance, uses AI to analyze selfies and offer skincare and haircare suggestions. Dove’s AI-powered Scalp + Hair Therapist offers personalized scalp care advice, while POND’S AI Skin Expert helps users identify and address skincare concerns.

Benefits of using AI in the retail industry

ML and predictive analytics collect and process data, identify patterns, and interpret huge pieces of information. It helps retailers with data-based decision-making through proper forecasts and predictions. Retailers can make use of AI algorithms computed on customer data, such as all information about each customer gathered when a customer uses a store app. When utilized properly, this valuable resource can result in improved customer e-commerce experiences, reduced costs, and naturally higher revenues.

Certain areas where AI is bound to leave an impact on retail operations include:

Personliga shoppingupplevelser
Förbättrad lagerhantering
Effektiviserad verksamhet i leveranskedjan
Increased fraud prevention
Optimized marketing strategies
Högre effektivitet i verksamheten
Boosted sales conversion rates
Minskning av driftskostnaderna

The future of AI in retail : trends to watch

  • Hyperpersonalisering
  • AI-driven customer service
  • AR and VR integration
  • AI i försörjningskedjan
  • Rösthandel
  • Etisk AI och datasekretess
  • AI-powered visual search
  • Sustainability and AI
  • Enhanced fraud detection
  • Prediktiv analys
  • Automated checkouts

Hyperpersonalisering

Retailers are now weaving personalized marketing into all channels of contact-from brick-and-mortar to mobile apps to social. It’s about keeping the experience connected, no matter how customers interact with the brand.

Hyperpersonalisering

AI-driven customer service

Driven by AI, chatbots and virtual assistants implement changes that elevate customer service right away in support of queries, moving the customer smoothly through a shopping experience for overall satisfaction and retention.

AI-driven customer service

AR and VR integration

More and more retailers are using augmented and virtual reality for better brand experiences that let customers see how products would look within their space or virtually try on a product to increase engagement and conversion rates.

AR and VR integration

AI i försörjningskedjan

AI already embeds efficiency in supply chain management much through advanced demand prediction and automated inventory management. Such AI-powered systems track the level of stock, sales velocity, and demand patterns in real-time and can trigger restocking processes automatically once the stock falls below specific thresholds.

AI i försörjningskedjan

Rösthandel

With continued improvement of AI and natural language processing, the capabilities of voice commerce will evolve to better consumer engagement and the future of retail shopping. Brands embracing this shift are likely to see boosted customer loyalty as consumers are increasingly comfortable using voice commands for everyday tasks, including shopping.

Rösthandel

Etisk AI och datasekretess

Most retailers are putting emphasis on the ethics of AI and data privacy with the rising adoption of AI. Conformity to regulation, along with transparency about data usage, will be the major factor in building trust among consumers.

Etisk AI och datasekretess

AI-powered visual search

This feature lets customers directly upload a photo or take a picture of a product instead of going through the arduous task of typing out queries. As this tech becomes increasingly sophisticated, it will continue to transform the shopping experience, making it increasingly intuitive and personalized in terms of product discovery.

AI-powered visual search

Sustainability and AI

Through better supply chains, reduced wastage, and the creation of sustainable practice areas, retailers are rising to the call of an increasing number of consumers who want "greener" products and initiatives. As this continues to build momentum, so too will brands adopting generative AI to elevate their sustainability contribution.

Sustainability and AI

Enhanced fraud detection

AI and machine learning technologies allow retailers to take proactive steps to identify fraudulent activities and prevent them in real time. As this trend continues to even heighten, retailers who invest in solid fraud-detection systems will protect not only their operations but foster more confidence among consumers, bringing forth a more secure and resilient retail environment.

Enhanced fraud detection

Prediktiv analys

Retailers increasingly use AI to analyze large datasets — social media trends, sales data, and market signals — to make more accurate predictions of consumer demand. This enables brands to respond quicker to shifting consumer preferences, optimize their inventory management, and have more targeted marketing strategies.

Prediktiv analys

Automated checkouts

The computer vision systems installed in stores continuously monitor customers as they shop, automatically recognizing items picked up from shelves. Retailers can analyze this information to optimize product placement, manage inventory more effectively, and tailor marketing strategies to better meet customer needs.

Automated checkouts
Hyperpersonalisering

Did you know Walmart uses computer vision to create heat maps showing which store areas are the most popular? Why is it super cool? This map data allows for evaluating how their display is attractive to customers and how it influences their shopping decisions. In general, AI in visual merchandising contributes to more engaging in-store experiences while optimizing goods' visual presentation and increasing store profitability. This refers to using software based on ML algorithms, computer vision, predictive analytics, and other AI tools.

Hyperpersonalisering
AI-driven customer service

Driven by AI, chatbots and virtual assistants implement changes that elevate customer service right away in support of queries, moving the customer smoothly through a shopping experience for overall satisfaction and retention.

AI-driven customer service
AR and VR integration

More and more retailers are using augmented and virtual reality for better brand experiences that let customers see how products would look within their space or virtually try on a product to increase engagement and conversion rates.

AR and VR integration
AI i försörjningskedjan

AI already embeds efficiency in supply chain management much through advanced demand prediction and automated inventory management. Such AI-powered systems track the level of stock, sales velocity, and demand patterns in real-time and can trigger restocking processes automatically once the stock falls below specific thresholds.

AI i försörjningskedjan
Rösthandel

With continued improvement of AI and natural language processing, the capabilities of voice commerce will evolve to better consumer engagement and the future of retail shopping. Brands embracing this shift are likely to see boosted customer loyalty as consumers are increasingly comfortable using voice commands for everyday tasks, including shopping.

Rösthandel
Etisk AI och datasekretess

Most retailers are putting emphasis on the ethics of AI and data privacy with the rising adoption of AI. Conformity to regulation, along with transparency about data usage, will be the major factor in building trust among consumers.

Etisk AI och datasekretess
AI-powered visual search

This feature lets customers directly upload a photo or take a picture of a product instead of going through the arduous task of typing out queries. As this tech becomes increasingly sophisticated, it will continue to transform the shopping experience, making it increasingly intuitive and personalized in terms of product discovery.

AI-powered visual search
Sustainability and AI

Through better supply chains, reduced wastage, and the creation of sustainable practice areas, retailers are rising to the call of an increasing number of consumers who want "greener" products and initiatives. As this continues to build momentum, so too will brands adopting generative AI to elevate their sustainability contribution.

Sustainability and AI
Enhanced fraud detection

AI and machine learning technologies allow retailers to take proactive steps to identify fraudulent activities and prevent them in real time. As this trend continues to even heighten, retailers who invest in solid fraud-detection systems will protect not only their operations but foster more confidence among consumers, bringing forth a more secure and resilient retail environment.

Enhanced fraud detection
Prediktiv analys

Retailers increasingly use AI to analyze large datasets — social media trends, sales data, and market signals — to make more accurate predictions of consumer demand. This enables brands to respond quicker to shifting consumer preferences, optimize their inventory management, and have more targeted marketing strategies.

Prediktiv analys
Automated checkouts

The computer vision systems installed in stores continuously monitor customers as they shop, automatically recognizing items picked up from shelves. Retailers can analyze this information to optimize product placement, manage inventory more effectively, and tailor marketing strategies to better meet customer needs.

Automated checkouts

Slutsats

AI is going to become a bigger part of retail, offering customers personalized, interactive shopping experiences. This will open up a whole new world of opportunities for businesses to truly connect with their customers, turn data into meaningful insights, and take their operations to the next level. If you have a vision or are just starting to explore how to make your retail business AI-adopted, let’s connect and discuss your ideas.

FAQ

Retailers use AI technologies like automation and machine learning (ML) algorithms to improve merchandising, inventory management, and workforce optimization — all to create a more cohesive customer experience. AI in retail covers the entire retail process, including physical stores and online platforms.

Advanced algorithms enable AI to learn the preferences of a specific customer and recommend similar products viewed earlier. Chatbots and virtual assistants reach out with instant support to answer queries and guide customers through their shopping experiences. AI further optimizes the inventory to minimize the probability of a stock-out situation while it also works toward improving the checkout experience to reduce friction and lower cart abandonment rates.

AI is absolutely effective in saving retailers money. For instance, AI can track inventory, automatically reorder products, and even predict the demand to avoid overstocking or stockouts. It can also help with scheduling staff at the right times so stores don’t spend more than they need to on labor. It makes deliveries more efficient by selecting the best routes that minimize transportation costs. It also detected fraud early on and helped prevent financial losses.

North America is on top of the list due to advanced technological infrastructure and widespread adoption of AI-driven solutions. Countries like the UK, Germany, and France promote AI implementation within the European retailers. Asia Pacific exhibits significant growth potential, stimulated by a rapidly evolving eCommerce landscape and tech-savvy consumers. The Middle East is witnessing a gradual but steady adoption of generative AI in retail, with Dubai and Saudi Arabia leading the way. South Africa and Nigeria show promise in AI integration into retail processes in Africa.

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Volha Ralko Delivery manager at Innowise
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Volha Ralko Delivery manager at Innowise

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