Debra Wolf, Strategy Director
16 June 2025
Debra Wolf, Strategy Director
16 June 2025
It’s an undeniably challenging year for retail. Shifting customer behavior and rising expectations mean brands are looking to tech to stay ahead. According to Forrester’s Predictions 2025: Retail Report, one in five retailers across the US and EMEA will launch customer-facing generative AI applications in the coming year. It’s clear that AI isn’t simply powering back-end systems. It’s front and center now, transforming how customers shop.
AI-assisted shopping means using artificial intelligence to enhance and personalize the consumer retail experience. From machine learning and natural language processing (NLP) to computer vision and generative tools, AI is now involved in everything from discovery to purchase, online and offline.
Historically, retail technology has focused on behind-the-scenes improvements such as analyzing data, gathering insights, and developing efficiencies. Today, more and more brands are building AI directly into the customer experience, where it can have the most noticeable impact.
AI in retail comes in many forms. Like chatbots on websites; voice assistants, such as Alexa; and personalized recommendation engines that suggest products based on browsing history, preferences, or purchase behavior. Beyond that, visual search tools allow customers to upload an image to find similar products, augmented reality try-ons can bring the fitting room to your phone, and predictive analytics anticipate what you might want to buy next. These experiences are designed to reduce friction and add value in ways that feel intuitive.
Indeed, 30% of US online adults now expect to interact with companies through a virtual assistant. Gone are the days of rule-based chatbots with basic responses – advances in personalization mean now you can expect dynamic recommendations based on user data and behavior. The evolution of virtual assistants has transformed how people shop. But as technology becomes more and more sophisticated, the same goal remains – to serve the customer more effectively.
The biggest shift? Personalization at scale. For years, we’ve discussed the importance of relevance, but generative AI has made hyper-personalized experiences essential. In fact, one in five data and analytics leaders in retail say they’re using AI specifically to scale and optimize personalization.
We’re already seeing brands use AI to predict needs, tailor recommendations, and guide shoppers through every step of the journey. From Sephora’s AR-powered try-ons to Amazon’s data-driven suggestions based on predictive analytics, AI is powering a more frictionless, relevant buyer journey than ever.
Brands can incorporate AI-assisted shopping into their marketing strategies to create more seamless, engaging customer experiences. Augmented reality and virtual reality tools also enable more immersive shopping – virtual try-ons or at-home visualization can boost buyer confidence and significantly reduce returns. And in terms of pricing, AI can also optimize strategies with dynamic algorithms to reflect demand, user behavior, or competitor trends.
By embedding AI into retail, brands can foster stronger customer relationships in an increasingly competitive landscape. Omnichannel integration ensures a seamless shopper experience across platforms, from online searches to in-store purchases. Nearly half of US online adults say they’d find value in using interactive displays while shopping. Then, post-purchase, AI tools like chatbots and sentiment analysis can enhance engagement by gathering feedback, upselling, and providing tailored recommendations.
It’s important to remember that, as with any transformative technology, AI isn’t without risks. Some 19% of global retail AI leaders say that AI-based decisions have caused harm to customers or employees in the past year. The benefits are clear, but the dangers need to be mitigated too. Retailers need to invest in robust training for their teams. Trust in AI remains an issue that should be considered by all brands for many reasons, not least the risk of biased data leading to unfair treatment of certain customer groups or employees. Moving forward responsibly is an absolute business imperative.
AI in retail isn’t a trend. It’s an evolution, and it’s not going away. The question is how brands choose to apply it. My prediction? The brands that focus on real value to the customer, seamless integration, and building trust will undoubtedly flourish. Whereas those treating it as a standalone, one-dimensional tool or that fail to address the risks may well get left behind. One thing is clear: we all need to take time to consider how AI is going to shape our 2025 retail strategies.
If you want to realize ROI by harnessing AI to create a seamless and immersive buyer journey, download Debra's latest eBook: 2025 Trends: How AI is Changing the Buying Landscape for Marketers and Consumers.
This article originally appeared on The Drum.
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