From shelf to screen, artificial intelligence is rewriting the rules of retail. More than half (55%) of U.S. retail marketers plan to increase investments in AI to drive customer engagement, according to SAP Emarsysin a context of intense efforts to retain consumers in a difficult economic environment. On the retailer side, Walmart is one of the latest to join the battle, creating digital twins of its stores and introducing “super agents” to help shoppers.
And buyers are also turning head-on to AI. Adobe Analytics showed that in just seven months, from July 2024 to February 2025, traffic from generative AI sources to retail sites increased by 1,200%.
The same technology that retailers are trying to master is also reshaping the way consumers connect, compare and choose. Buyer expectations are evolving as quickly as the tools themselves. The opportunity, and challenge, for brands is to use AI not just as automation, but as amplification: a way to make every interaction smarter, faster and more human.
AI cannot simply be used to optimize operations, because loyalty, the lifeline of retail, is not based solely on speed or convenience. It’s about an emotional connection.
State of Play for Retail Brands
Retailers and their manufacturers have faced unprecedented challenges in recent years. Pricing changes, inflation, cyberattacks and pressures on consumer spending have weakened brand loyalty. Even big names can’t rest on their laurels.
Widespread adoption of AI is accelerating in retail, making differentiation critically important. Estée Lauder is one of several cosmetics makers to have introduced, for example, an AI-based shade-matching tool in recent years, so technology alone can’t make them stand out. At the same time, while some sectors, such as financial services, are seen as showing personality and engaging consumers more than in previous years, the retail sector faces the challenge of ensuring that sophisticated technology does not undermine this emotional connection and, ultimately, their brand value.
Now is the time for retailers and manufacturers to ensure AI interactions advance their brands by leveraging their authority, equity and brand voice to drive connection and orchestrate growth, not just for operational efficiency and headlines.
Think beyond function
Agentic AI, product discovery tools, and recommendation engines need to be positioned as meaningful extensions of the retail experience and not just shiny new toys. It’s easy to get caught up in chasing what your competitors are doing, but new features and technologies should move the business forward by bringing true value to every buyer interaction.
Morgan Stanley estimated a Potential to save $6 billion for retail thanks to the efficiency of agentic AI. Companies are already rushing to save money, but this cannot come at the expense of experience.
Take AI-powered chatbots for example: there was a sudden rush to deploy them as sales assistants, and now they are everywhere. The intention is to smooth the customer journey, but too often the execution is flawed, lacking connection with the brand voice, turning what should be a seamless shopping experience into challenges that obscure the brand’s attempts at connection. Customers who receive chat prompts before they have had a chance to browse or receive generic and unhelpful responses will not see the value.
Success comes when there is purpose beyond function. With our client Danone, we worked to deepen customer relationships. Over the past decade, the yogurt aisle has exploded from a handful of familiar options to a burgeoning array of sizes, flavors and health-focused alternatives. The variety was plentiful, but it created an unnecessarily complex shopping experience. We partnered with food retailer Schnucks to design and test a yogurt finder that features an interactive touchscreen kiosk in the aisle that educates shoppers about different types of yogurt, their health benefits, and new options.
By directly playing on how people shop for the yogurt category, we tried to show empathy and make this tool a key differentiator and guide. Customer interactions must reflect the tone and values of the brand so that a tool’s impact is greater than just its basic function.
Gain fans, not just customers
Retail companies must strive to ensure that every interaction shoppers have with their brands or stores fosters loyalty. This is only possible when they take the next critical step of determining where this technology fits, defining its purpose in the shopping journey, and ensuring they use the data collected to personalize the shopping experience and connect digital and physical retail spaces.
Every use of an AI-powered search tool, in-app assistant, or other consumer-facing technology provides implicit and explicit information about what shoppers are looking for. Knowing the language and approach they prefer is very powerful, not only in helping them access products already available, but also in pointing them to growth opportunities.
Purchasing-related ChatGPT queries reached nearly 10% of total prompts last year, according to Bathso there is a desire for brands and retailers who ask the right questions. Even if thousands of consumers start using your new technology, the value lies in facilitating the right conversation and ensuring the dialogue is focused on re-engagement rather than one-off transactions.
Walmart’s new assistant, Sparky, and Amazon’s Rufus provide examples of AI-powered interactions that could move a brand forward. As they get to know a customer, they can offer personalized product recommendations, manage orders, discover product benefits and suggest related products.
The intention is to streamline the purchasing process and SO anticipate what the customer might want to do next. By allowing customers to discover a relevant recommended recipe online and then use the same tool online or in-store to locate the products within it, AI can bridge the gap between content and shopping cart. In this case, the value of the AI offering lies in brand visibility and consistency, not just speed and scale.
Where to start with AI in retail
There are many ways to leverage AI in shopping experiences to bring brand voices to life, providing solutions to real user problems and driving loyalty. The best AI strategies start with clarity. Start small, in the moments that matter most to your buyers: discovery, decision and pleasure. It’s important for retailers and manufacturers to think about where their brands naturally meet their shoppers, then use AI to make that interaction smarter, faster and more personal.
Whether through conversational tools, predictive insights, or immersive in-store experiences, success comes from remaining brand-focused and customer-focused. When AI is used to enhance brand expression and meet human needs, it becomes more than a tool: it becomes a differentiator.
As Vice President, Growth and Digital Experience at FutureBrandGreg Hedges sits at the intersection of strategy, creativity and technology. He has spent the last 25 years shaping, designing and developing interactive experiences for clients of all shapes and sizes, including P&G, KraftHeinz, Stanley Black & Decker, American Express, Unilever, Pfizer, Campbell Soup Company, Yahoo!, the National Retail Federation, PepsiCo, Starbucks, Walmart and Amazon. Prior to joining FutureBrand, Hedges spent 12 years at RAIN, a digital agency specializing in conversational AI through voice experience design and development, where he started as a senior developer and left in January 2022 as Chief Experience Officer, leading RAIN’s strategy and UX teams. Prior to RAIN, Hedges worked as a designer for Context Studio and for King Features, a division of Hearst Corporation. He also spent several years teaching graphic design on the faculty at Syracuse University’s SI Newhouse School of Public Communications.
