The trend: Retailers are investing in AI to improve operations and customer service. From design trend predictions to intelligent assistance, AI is moving from back-office functions to visible, customer-facing applications.

• Walmart and Amazon are developing AI shopping assistants and supply-chain tools to streamline inventory management, speed up fulfillment, and help customers find products.
• Williams-Sonoma expanded its AI customer service assistant across all brands to resolve issues faster and cut costs. It’s also developing an AI meal-planning assistant.
• Fashion retailers use AI to influence design and merchandising decisions. Stitch Fix, for example, used AI to determine which colors to stock and launched a genAI tool that lets shoppers visualize how they might look in outfits. Stitch Fix said on its Q2 earnings call that its AI merchandising tool contributed to a 9% YoY boost in its average order value, per PYMNTs.
• Sephora and other beauty companies use agentic AI to provide personalized assistance beyond product recommendations. Combined with its AR try-on tools, the system can match makeup shades to skin tones.

These examples show how AI can reduce retail costs, anticipate consumer needs, and enable innovation.

The opportunity: As margins tighten and shoppers expect seamless digital experiences, retailers recognize that AI gives them a way to do more with less—delivering the tailored experiences that consumers expect.

But there are still obstacles to adoption: Just 43% of retail professionals say they use AI for customer-facing tools like chatbots or personalized marketing, per a June Amperity survey.

This data shows that front-end retail AI adoption is still developing and points to a key area of opportunity: at the consumer interface, where automation and personalization can aid the shopper experience.

Ahead of this year’s holiday season, many retailers readied AI tools to assist consumers in comparing prices, searching for products, and receiving tailored recommendations. Nearly a quarter of consumers have used AI for shopping, and more plan to use it, per research from Capgemini.

Implications for brands: Retailers that don’t explore AI risk losing out on positive outcomes, from efficiency gains and cost reductions to stronger personalization and customer loyalty. The winners will be those that use AI to solve real consumer pain points such as finding matching makeup shades or suggesting recipes based on nutrition goals.

Lower-risk ways for retailers to deploy the tech include chatbots and intelligent agents for customer support, predictive demand forecasting to manage inventory, and personalizing product recommendations to boost discovery and conversions.

Go deeper: Read our report, Navigating the AI-Powered Path to Purchase.

This content is part of EMARKETER’s subscription Briefings, where we pair daily updates with data and analysis from forecasts and research reports. Our Briefings prepare you to start your day informed, to provide critical insights in an important meeting, and to understand the context of what’s happening in your industry. Non-clients can click here to get a demo of our full platform and coverage.