What: AI is transforming the retail industry in many ways, from supply chain operations to in-store operations to the customer experience.

Why it is important: Even though the report might look a bit optimistic, it is a refreshing reminded of everything which is currently on the market and designed to optimize retail operations. Articulating everything and making sure all systems works and interact together will be the first major challenge, the second one being to make sure this makes economically sense.

According to Coresight Research Analysis, global revenues generated by AI for retailers will exceed $38 billion in 2030, up from an estimated $8.5 billion in 2023.

Contactless commerce will be prevalent in brick-and-mortar retail through 2030, thanks to service bots, personal assistants and payments that enable contactless and personalized shopping experiences. AI will prove central when it comes to data analysis and store merchandising adaptation in real-time, including reorders but also in-store activity and how to improve product display. Coresight considers that this will be a great margin contributor margin (which will be needed to compensate for the cost of equipment).

Virtual agents and robots will be able to handle most store operations autonomously by 2030. Additionally, nearly every aspect of the supply chain will be impacted by robotics and AI by 2030, with significant benefits in warehouses (fulfilment made by robots, use of IoT, RFID…), in-store inventory, loss prevention, and the last mile (autonomous vehicles).

AI is also automating interactions between humans and machines, and all activities in the metaverse (including the embodiment of virtual idols such as Lil Miquela). It is expected that 95% of interactions will be powered by AI in 2025. Integrated with VR and AR technologies, AI is providing customers with smooth and seamless interactions with AI assistants, which are not possible in today's world, including a true capability to interact in natural language and being able to respond to sentiments and feelings, well beyond written communication (i.e. an app or a website could interact with a customer in the same way than a sales associate answers questions today in the store). It is expected that 76% of US customers will use AI-enabled voice activation to make purchases in 2030, up from 17.8% today.

Personalization and the overall customer experience will greatly benefit from improvements in AI over the next 10 years. Artificial empathy will allow retailers to build fully complete customer profiles, providing them with highly personalized experiences thanks to the combination of all customers’ elements (e.g. connected home devices).

Although AI algorithms today are still crude and not fully capable of seamless interaction with humans, they are advancing at a rapid pace and will impact the retail sector in a meaningful way. It is important to note as well that, even though all these technologies already exist and are available, integration at scale for full autonomy within stores will be expensive and painful.

The future of AI in Retail