AI in Retail: Six Business Advantages that AI Transformation is Already Delivering

The penetration of AI in retail is well underway. While chatbots are perhaps the most visible aspect of AI in retail, they represent just a tiny fraction of the enormous potential of AI when applied across the value chain. This blog explores some of the key areas where AI in retail is being deployed and highlights six potential business advantages that it is delivering for leading retailers.

In just the last three years, the use of AI in retail has grown dramatically. Back in 2022, a survey by management consulting firm McKinsey found 92 percent of companies planned to increase investment in artificial intelligence over the next three years. Since then, many other firms have forecast similar high growth rates for AI transformation. For example, according to Grandview Research, the global AI in retail market size was valued at $11.61 billion in 2024 and is expected to grow at a CAGR of 23% percent from 2025 to 2030.

So, what’s driving such rapid growth? As digital commerce matures and customers demand more seamless, personalized, and responsive experiences, AI is emerging as the most powerful lever for gaining a competitive advantage. According to Neontri, generative AI in retail has the potential to deliver considerable benefits across an organization, such as slashing customer acquisition costs by up to 50%, reducing expenses up to 30%, and speeding time-to-market from several months to weeks. So, while many retailers are still focusing on incremental efficiency, the front runners are using AI transformation to rethink, retool and recharge their businesses.

In working with leading retailers worldwide, GlobalLogic has noted six business advantages that those undertaking AI transformation are already leveraging:

1. Retail Personalization

Retail personalization using AI helps retailers deliver contextual, personalized experiences that convert. For example, machine learning can recommend products based on a blend of past behavior, real-time navigation, and inventory trends. Retail personalization can also be achieved through AI-enhanced loyalty engines that suggest promotions with the highest likelihood of redemption, improving both engagement and return on investment. Intelligence engineering, available from GlobalLogic, can provide high levels of retail personalization by adding reusable AI models and plug-and-play integrations into loyalty platforms, mobile apps, and digital storefronts. Recently, GlobalLogic used AI to help Catalina enhance targeting capabilities for improved personalization and customer engagement.

2. Dynamic Pricing

If you’ve used a rideshare service lately, you’ve probably experienced dynamic (surge) pricing. Similarly, AI transformation is now making it possible for retailers to adjust prices in real-time, considering a host of different factors (demand, availability, past user purchases, their searches, etc.) and external factors like competitor pricing or seasonality. For poorly selling products, AI can automatically lower prices to help drive sales and reduce inventory. According to McKinsey, this can result in a 2-5% increase in sales and up to a 10% growth in margin.

3. Real-Time, Data-Driven Decisions

As AI excels at pattern recognition, retailers that invest in AI-driven insights can pivot faster, plan better, and reduce costly errors. Predictive analytics can optimize assortment planning based on seasonality, behavior, and supply constraints while AI combined with IoT can proactively manage inventory and shelf health. AI in retail is also being applied to fulfillment systems, which can now predict inventory needs by region and product type, reducing waste and improving stock availability. At GlobalLogic, VelocityAI unifies predictive analytics, data platforms, and AI governance to make intelligent decision-making accessible across the organization.

4. Supply Chain Optimization

AI is particularly well suited to identifying supply chain inefficiencies. By optimizing logistics operations through AI transformation, retailers can not only reduce costs, but also streamline delivery performance, leading to higher customer satisfaction. For example, by implementing in-store analytics and centralized BI (Business Intelligence) platforms, retailers can track customer flow, monitor engagement patterns, and optimize operations in real time. In addition, AI-powered KPI tracking and predictive models can support agile planning and execution across the supply chain, resulting in faster delivery times.

5. A Better Customer Experience

AI is already revolutionizing real-time customer engagement. According to Tidio, 88% of customers interacted with an AI-powered chatbot in the last year and only 2% consider chatbots not helpful. Today, mobile apps enhanced with AI-driven engagement tools can deliver curated content and suggestions based on contextual usage data, potentially increasing sales. Beyond elevating real-time customer engagement by providing product details and recommendations, AI can also analyze feedback and site usage to improve the customer experience, resulting in stronger brand loyalty and sales.

6. New Engagement Channels

AI in retail isn’t about just upgrading old systems – it’s enabling new models. From conversational commerce to AI-powered styling, retailers are building differentiated experiences. Mobile platforms can offer dynamic lookbooks that evolve with user preferences, seasonality, and trending data. Generative AI tools can support associate training and customer onboarding, improving service quality and reducing ramp-up time. GlobalLogic clients are using VelocityAI to accelerate these innovations with a secure, scalable AI infrastructure and proven design frameworks for experimentation.

AI is more than an incremental technology upgrade. It’s a business reinvention tool and the boldest retailers are not just doing more with less at lower cost with AI. They’re crafting new kinds of experiences, real-time customer engagement, and value. Whether you’re just beginning or looking to scale AI enterprise-wide, GlobalLogic and VelocityAI can provide the strategy, tooling, and engineering support retailers need to deliver on the promise of AI transformation.

Learn more about VelocityAI today.