AI is Already Changing Retail — and There’s No Turning Back

What was once the stuff of the silver screen ("Minority Report," anyone?) is now shaping everyday decisions. Artificial intelligence is becoming a cornerstone of modern retail, almost by stealth — and its adoption shows no sign of slowing. New research from Apply Digital, surveying senior leaders across the sector, shows that retail has moved decisively towards AI-powered personalization at scale.

Nearly three-quarters of retailers are already using AI to tailor and enhance the customer experience. Almost everyone else is preparing to follow. Some 95 percent of retailers, for instance, are either already using or planning to adopt real-time product recommendations powered by AI in the near term (71 percent currently and 24 percent within 12 months).

Meanwhile, 93 percent say they're already using or plan to use AI to enhance search capabilities. A further 89 percent are investing in AI to personalize product descriptions, and 88 percent to utilize dynamic pricing based on user behavior. It’s a similar picture across a range of customer experience (CX) areas, from personalized emails and enhanced navigation to tailored digital storefronts.

While the adoption of AI tech may not be a surprise — it’s endemic across the board, after all — these are huge numbers. And no matter the function, the clear focus is on responding to individual behavior at scale, improving relevance, adapting messaging, and fine-tuning how products are presented, all with the aim of meeting expectations in real time.

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We're now entering an era in which retailers can respond faster and with greater precision, which in turn is shifting consumer preferences as the market leaders redefine CX benchmarks.

There’s also a broader shift happening behind the scenes. Personalization is increasingly seen not just as a way to boost short-term sales, but as a long-term approach to earning loyalty. One-to-one experiences tend to drive stronger engagement and repeat visits. That’s why 40 percent of retail leaders now plan to spend over $1 million on personalization initiatives in the year ahead, and 48 percent between $500,000 and $1 million. It’s clear that AI is now a key part of any serious growth strategy.

Even so, the technology is only one part of the equation. Our research reveals while seven in 10 consumers — rising to 80 percent of those aged 18-24 — say they value personalization, nearly 40 percent want greater control over how their data is used. That creates a clear signal for brands. Personalization works best when customers feel informed, respected, and confident that they’re getting something useful in return.

Consequently, the retailers that take an empathetic approach to AI will be the ones to build trust while delivering relevance. Certainly the retailers already doing this well have hardwired clear messaging around data use, thoughtful timing of promotions, and recommendations that feel helpful rather than intrusive. They're also designing systems that allow for more personal control, giving people space to shape the kind of experience they want.

This balance between cutting-edge technology and human understanding will only become more important. The next wave of change is already beginning to surface, with the early emergence of agentic AI — i.e., digital assistants that can make choices or take action on behalf of customers. These systems could soon manage everything from product discovery to routine purchases, reshaping how people shop.

In that environment, retailers may find that they're no longer speaking directly to the consumer but to the tools they rely on. That shift will require a fresh look at the entire customer journey. It will also raise new questions about visibility, influence, and brand preference in a more automated world.

Retailers are already adapting, moving quickly to embed personalization as something continuous, responsive, and deeply integrated. What’s changing now is the pace and the expectations that come with it. We know AI isn’t a future consideration for the sector — it’s here. The work ahead is to make sure it stays useful, respectful and rooted in what people actually want.

Brian Browning is vice president of enterprise solutions, Apply Digital, a modern digital services company.