How Is AI Reshaping the Future of Retail?

Artificial Intelligence has moved from the sidelines to the center of retail transformation. Among its many innovations, Generative AI (GenAI) is proving to be one of the most powerful tools, reshaping customer journeys, product creation, and decision-making across the value chain. From dynamic pricing to personalized shopping experiences, AI is reinventing how retailers operate and how consumers interact with brands.

The Growth of AI in Retail

Retail is at a turning point, with AI adoption accelerating at record pace. According to Fortune Business Insights, the global AI in retail market is projected to grow from USD 9.36 billion in 2024 to USD 85 billion by 2032, reflecting a CAGR of over 30%. McKinsey further estimates that GenAI and advanced analytics could unlock USD 240–390 billion of annual value for the retail sector. These figures highlight that AI is no longer optional — it is becoming a core driver of competitiveness.

How GenAI Is Transforming Retail Operations

AI is already changing how retailers manage their day-to-day business. AI agents are being deployed for inventory optimization, pricing decisions, and merchandising, delivering faster and more accurate outcomes. GenAI is reducing time-to-market by generating product descriptions, automating campaign content, and even supporting new product design. According to IBM, 42% of retail CEOs rank GenAI as a top priority to improve customer service and overall business performance in the next three years.

Meeting Rising Consumer Expectations

Today’s customers expect seamless omnichannel experiences and personalized engagement across every platform — whether online, in-store, or mobile. Retailers are turning to AI-powered tools such as virtual shopping assistants, style advisors, and visual search engines to meet this demand. Marks & Spencer, for instance, reported a 7.8% increase in online sales after introducing AI-driven styling recommendations, a clear example of how GenAI can directly impact performance.

Real-World Applications of GenAI in Retail

Generative AI is finding applications throughout the retail value chain. Personalized engagement strategies are helping brands move from mass marketing to one-to-one communication. Dynamic pricing models adjust in real time to reflect market conditions, protecting margins while boosting competitiveness. Automated content generation is reducing manual effort in creating product copy and imagery, freeing creative teams to focus on strategy. Meanwhile, sustainability-focused start-ups like Stylumia are leveraging AI to forecast demand and reduce overproduction, preventing millions of garments from going to waste.

Challenges of AI Adoption in Retail

Despite the momentum, scaling AI comes with challenges. Many retailers struggle with legacy IT systems and fragmented data that limit AI’s effectiveness. Algorithmic bias, data privacy, and transparency issues can undermine consumer trust. The shortage of skilled AI professionals adds to the difficulty, while evolving regulations require continuous compliance. Retailers must balance innovation with responsibility, ensuring AI is deployed ethically and sustainably.

NexGen Retail Summit: Shaping the AI-First Future

The retail sector is entering a defining decade, and the adoption of AI will determine its future growth. The NexGen Retail Summit will bring together global retailers, technology leaders, and innovators to showcase real-world case studies and strategies for scaling AI responsibly. Through expert discussions and collaborative workshops, the event will explore how GenAI and AI agents are already reshaping retail, and what lies ahead.
AI is no longer just a supporting technology — it is the driving force of retail reinvention. The time to act is now.