up button image
Industry Innovation

Personalize the Retail Customer Experience with AI

Retailers Looking to Personalize Customer Experience with AI

customer using credit card to pay

erriam-Webster defines artificial intelligence as: A branch of computer science dealing with the simulation of intelligent behavior in computers and the capability of a machine to imitate intelligent human behavior.

Although AI was originally created in basic forms by pioneers who used computers to demonstrate machine intellect through a simple game of checkers in the 1950s, AI has swiftly developed into a colossal market that the majority of retailers are now using to their advantage.

AI and Enhanced Customer Service

One major benefit of using AI in retail is that it allows retailers opportunities to give their patrons comprehensive and personalized customer services.  In using AI to learn from past interactions with consumers, retailers can use automated chatbots to answer client queries.    This gives retailers the chance to personalize customer experience whilst minimizing response times and making customers feel valued.  

AI is exceptionally useful in retail for anticipating a customer’s desires and expectations, ultimately predicting what they want and what their next purchase will be.  This means that retailers can perfectly curate product selections and recommendations for their clientele through data-driven insights.

This is particularly important in operating hours where there may be limited human staff on-site or online and a customer’s question is straightforward and easy to answer.  Customer service chatbots also technically mean that a store may require less staff to be employed, overall reducing costs for retailers and enhancing profit margins.  However, the argument is made that AI technology should not replace employees altogether but merely allow human workers to feel less overwhelmed, giving them the chance to focus on more complex tasks.

Enhanced In-Store Experience and Efficiency

Although AI is important in making a customer feel welcomed, AI is likewise used in c-stores to enhance efficiency and decrease the amount of time a customer needs to spend in-store conversing with retail employees.

While this seems counterproductive in terms of customer service, the majority of consumers favor haste and seamlessness in their shopping experience nowadays.  This ‘need for speed’ explains the success of innovations like Amazon Go's c-store technology, allowing customers to walk into a store, pick up their desired items and leave with the money being directly billed to their bank account.   This means that customers aren’t bogged down by the usual chit chat with cashiers and can spend as much or as little time in-store as they desire.

Equally, retailers are now using AI to enhance the in-store experience by using virtual augmented reality to help their customers make purchasing decisions.  This method is particularly useful for bigger purchases like furniture, allowing shoppers in-store to ‘try before they buy’ by seeing 3D graphic representations of products and testing out their functionalities on-screen.

Likewise, shoppers can point their smartphones at an area of their own home and virtually move furniture around, trying different layouts and colors before making a purchase.   Consequently, augmented reality technologies are set to revolutionize the future of AI in retail, increasingly creating a smoother blend between online and offline experiences as software advances.  

AI Anticipating Customer Expectations

AI is exceptionally useful in retail for anticipating a customer’s desires and expectations, ultimately predicting what they want and what their next purchase will be.  This means that retailers can perfectly curate product selections and recommendations for their clientele through data-driven insights.

While this obviously applies to online shopping as AI can track a consumer’s internet data, page clicks and search history to see what each individual is looking for, this method has also started to transfer into physical retail stores too.  The Amazon 4-star stores are a great example of this.

These stores sell items traditionally sold on the Amazon site rated 4 stars and above as well as trending and best-selling items to make the transition from online shopping to brick-and-mortar stores more seamless.  Therefore, customers don’t have to spend time traipsing through the Amazon website for hours on end to find the best products.   The novelty of this ‘treasure hunt’ style of store is also extremely popular.

There are now 32 amazon 4-star stores across the US and 1 has also popped up in London.  Although it’s still early days, these numbers iimply that Amazon intends to take Amazon 4-star store all across the globe all with the help of AI insights.

Finally, AI is importantly being used by retailers to target customers based on their location and therefore predict their next move.  This method is termed ‘geofencing’ which refers to AI that can notice when a customer is physically close to a store, then suggesting promotions and hyper-targeted offers to draw them to the site.  

Companies such as Propellant Media have helped convenience stores by using AI to reach clients who are driving off road exits close to their stores and have found a 101% increase in foot traffic in some cases.  Their AI technology can even keep track of those who have seen the ads and whether they have then walked inside the targeted store after seeing them.  

This easily allows vendors to see the direct impact of their advertising campaigns meaning that stores can focus on pushing their most effective ads and reworking those that are less successful.


Overall, AI has undeniably changed how retailers deliver personalized experiences to their customers.  Retailers choosing to keep things ‘old school’ risk being left behind whilst those innovating and exploring new ways to integrate artificial intelligence into their business models are sure to come out on top.  

Only time will tell what the next groundbreaking technology will be and what the future of AI in retail has in-store.  All we know is that these new developments are extremely exciting and new retail innovation is cropping up every day.

March 3, 2023