Experts in IT share how AI-powered tools can increase profits and enhance customer experience in retail

The retail industry is going through a rapid transformation. Artificial intelligence has emerged as a crucial force in this change, enabling retailers to reshape every aspect of their business, from managing inventory to enhancing customer experience. As retailers strive to remain competitive, AI tools and solutions offer many growth opportunities. In fact, the future of AI in retail is focused on creating more seamless operations for retail workers and increasing sales while reducing selling, general and administrative expenses.

Here, Kyndryl's Senior Vice President of Retail, Holly Hickey, and Chief Technology Officer of Retail and Travel, Kayla Broussard, discuss how AI-powered retail solutions transform the shopping experience by providing personalized interactions, predicting consumer behaviors and reducing costs.

How can AI enhance customer experiences and increase profits for retailers?

Holly Hickey: One of the most significant impacts of AI is its ability to understand and predict customer behavior. Retailers can use AI tools to analyze large amounts of data on customer preferences and purchase history. This helps them stock items that customers want and avoid excess inventory that doesn't sell. This tailored inventory management solution not only ensures customer satisfaction by having the right products available, but also improves the overall efficiency of the supply chain.

Kayla Broussard: AI's role in personalization is critical. By integrating AI, retailers can offer a personalized shopping experience with hyper-relevant product recommendations to each customer. This is not just about addressing them by name but understanding their shopping patterns and preferences, which can be as detailed as predicting what products they might need based on past purchases or even predicting size and color preferences. This level of personalization significantly enhances customer satisfaction and loyalty, which are key drivers of retail success today.

Let's talk shop

AI is vital for the retail industry because it enables personalized shopping experiences, optimizes inventory management and enhances customer services through chatbots and virtual assistants. Additionally, AI can help detect fraud, improve security measures, and optimize pricing strategies based on market conditions and competitor analysis.

How can AI tools help forecast consumer trends and buying habits more effectively?

Hickey: AI provides advanced trend forecasting by analyzing current data trends and historical data to predict future buying patterns. For example, by understanding the correlation between weather patterns and buying behaviors, AI can help retailers stock up on predicted items that will be in demand ahead of a weather event.

Broussard: As far as consumer buying habits, AI tools can also optimize the layout of a store (planogram) based on heat maps generated from customer traffic patterns, ensuring that high-demand products are placed in high-traffic areas, which can significantly boost sales. It can help with planogram compliance and evaluate planogram performance based on KPIs such as foot traffic, inventory turnover, out-of-stocks, conversion rates and sales figures.

What are the potential benefits of AI for retailers?

AI algorithms analyze customer data to provide personalized product recommendations.
AI algorithms analyze market data and competitor pricing to adjust prices dynamically. Airlines and hotel booking sites often use this strategy.
AI optimizes supply chain processes, from production to distribution, improving efficiency and reducing costs.
AI enables visual search capabilities, allowing customers to search for products using images instead of text.
AI-powered chatbots and virtual assistants provide instant customer support, answering queries and assisting with purchases.
AI helps detect fraudulent transactions and unusual customer behavior in real-time, potentially protecting retailers from financial losses.
AI-driven demand forecasting helps retailers optimize inventory levels, reducing stockouts and overstocking.
Regarding the operational side of retail, how can AI inventory management solutions help increase sales?

Broussard: One of the revolutionary aspects of AI in retail operations is its ability to integrate across various points of sale and inventory systems to provide a unified, real-time view of inventory levels. This view helps them maintain just the right amount of stock based on predicted demand, reducing the cost of overstocking. It also allows for “predictive restocking,” where AI inventory management algorithms predict when stock will run low and automatically trigger replenishment orders.

Are retailers leveraging AI solutions to help with loss prevention?

Broussard: Loss prevention is another critical area where AI is making a significant impact. Using machine learning (ML) models, AI can identify patterns that might indicate fraudulent activities or shoplifting. For instance, AI-powered surveillance cameras can detect unusual behaviors and alert staff immediately. Additionally, AI can be integrated into RFID tags to track items in real-time throughout the store, which helps prevent theft.

Fashion & apparel

Virtual try-on technology allows customers to visualize how clothing items will look on them before making a purchase, and AI-powered inventory tools can help retailers predict future fashion trends.

Grocery stores

AI-enhanced visual cameras can help detect theft throughout the store and at self-checkout lines.


AI-driven skincare analysis tools provide personalized product recommendations based on skin type and skin concerns.

Healthcare & pharmacy

AI can analyze patient data and link it to conditions to improve diagnostic precision. Additionally, AI can suggest more efficient treatment options based on patient feedback and lifestyle factors.

Home improvement

AI-enabled visual recognition technology can help customers find the right products and paint colors for home improvement projects by analyzing images.

What are the crucial factors that retailers need to consider to adopt AI successfully?

Hickey: To successfully integrate AI in retail, it is important that your employees understand and welcome AI. This can be achieved by providing adequate training on how AI tools function and how employees can use them to improve their roles, not substitute them. Additionally, it's essential to have the right infrastructure in place for successful AI adoption in retail, including a reliable network, sufficient data storage capacity and robust security measures to safeguard customer data.

Broussard: Another crucial factor is the data quality. AI systems are only as good as the data they process. Retailers must ensure that they collect high-quality, accurate data from various sources, including point-of-sale systems, online transactions and customer feedback. AI models trained on stale or incomplete data may develop biases or even hallucinate. The data must be cleaned and organized to feed into AI systems for effective and reliable retail insights.

Featured leaders
Holly Hickey

Senior Vice President of Retail

Kayla Broussard

Chief Technology Officer of Retail and Travel

Industrie correlate