How retailers are using AI to boost productivity and personalize shopping

Retailers are leveraging AI to transform customer experience, decision-making, and operational efficiency

AI is no longer just a tool for automating routine work, it’s becoming the brain of modern retail. Top retailers are building intelligent systems that connect the dots between inventory data, customer behavior, and business strategy. The focus is on creating smarter, faster, and more responsive organizations. Companies are using AI to analyze sales performance in real time, adjust supply chains dynamically, and predict demand more accurately. The technology gives leaders a clearer view of what customers want and how to deliver it before the competition does.

Retailers like Best Buy, Gap, and Dick’s Sporting Goods are showing what this evolution looks like in practice. They’re moving away from the traditional view of technology as a back-end support function and toward full integration across every aspect of their operations. This level of transformation allows them to deliver highly personalized customer experiences and better align their teams around data-driven insights.

Executives should understand that this wave of AI adoption is as much about leadership as it is about technology. AI doesn’t replace people, it makes the best teams faster and more focused. The success of these initiatives will depend on how effectively companies can merge technology with human judgment, developing teams that adapt just as quickly as the tools they use.

According to the National Retail Federation’s December 2025 report, 39% of retailers expect AI to make up more than 10% of their total technology budget by 2028. That scale of investment signals a clear shift: AI is moving from experiment to infrastructure.

Best buy is repositioning itself as a retail media, advertising, and technology company

Best Buy is rewriting what it means to be a retailer in the digital age. Under Jason Bonfig, the company’s Chief Merchandising Officer, it’s building a model that blends retail operations with advanced technology and data monetization. Best Buy isn’t just selling hardware and gadgets, it’s creating a new kind of platform business where AI drives every decision from product mix to marketing reach.

The company’s partnerships with OpenAI and Google highlight its ambition to lead in technology-powered retail. These collaborations enable deeper insights into consumer behavior and new opportunities in advertising, content delivery, and smart product integration. AI systems are helping Best Buy map out new business opportunities, giving leadership the strategic clarity needed to expand into fast-moving categories like connected home products and digital services.

Bonfig made clear that people remain at the heart of this evolution. The company’s ongoing investment in employee development is designed to ensure that technology enhances human capability. The message is straightforward: great technology should make great people even more effective. In its latest quarter, Best Buy reported $8.9 billion in revenue and 2% growth in comparable sales, a sign that the early stages of this shift are already translating into measurable performance.

For senior leaders, Best Buy’s approach illustrates how to merge AI adoption with organizational identity. The key is alignment, making sure the company’s mission, people, and technology are moving in the same direction. This is where AI becomes more than a tool; it becomes an enabler of reinvention.

The rapid adoption of consumer-facing AI tools

Retail is shifting toward a model where AI-driven systems actively guide the customer journey. These tools, often called “agentic” systems, interact directly with consumers, recommending products, answering questions, and completing transactions in real time. They’re becoming personal digital assistants for shopping, and their growing presence is already reshaping how customers discover and evaluate products.

Retailers deploying these AI-driven agents are seeing early benefits. They gather insights from customer interactions to refine marketing strategy, enhance product recommendations, and increase conversion rates. The approach is about understanding consumer intent and responding intelligently to it. The data collected from these AI tools also helps retailers move faster in product development, pricing, and inventory allocation, areas that once depended heavily on delayed or fragmented feedback.

For executives, this is a clear signal to act. The rise of agentic commerce means competition will come from established retailers and from digital platforms and ecosystems offering adaptive, automated buying experiences. Early adoption provides a structural advantage, faster learning cycles, more precise market forecasting, and better allocation of marketing and R&D investment.

According to a joint report by ICSC and McKinsey & Company, agentic commerce could generate up to $1 trillion in retail revenue by 2030, with more than two-thirds of consumers already using at least one AI shopping tool in the past three months. The pace of change suggests that customer interactions will increasingly be mediated by intelligent systems, making investment in this space a clear priority for forward-leaning retail leaders.

Gap is utilizing AI to drive internal productivity and enhance customer personalization, supporting continuous sales growth

Gap is using AI to elevate both its creative and operational sides. Under CEO Richard Dickson, the company has integrated AI into product design, supply chain management, and inventory distribution. The aim is clear: strengthen data-driven decision-making and refine how products reach customers.

The company’s collaboration with Google’s Gemini allows for more informed customer engagement by helping shoppers find the right fit and match with confidence. On the back end, its partnership with Inspectorio’s Paramo system gives Gap better visibility into supply chain performance. By analyzing data from production to sale, the company can forecast demand with higher accuracy and move inventory more efficiently across product lines. This directly supports its ability to maintain consistent product availability, a crucial factor in retail reliability.

AI is also improving how internal teams operate. By automating repetitive decision-making tasks, Gap ensures that creative professionals, planners, and analysts can focus on high-value, strategic work. The result is a more efficient workflow and a structure that supports continuous improvement without compromising innovation. The recent quarter’s 2% growth in comparable sales, marking nine consecutive quarters of increases, suggests this AI strategy is translating into measurable returns.

For executives, Gap’s process offers a clear takeaway: AI transforms organizational capability when embedded across every level, from design and supply chain to customer interaction. As Dickson describes it, the brand is “led by creativity and powered by intelligence,” a vision that reflects how human creativity can scale through technology-driven precision when both are integrated with purpose.

Dick’s sporting goods is revolutionizing its customer support and eCommerce model

Dick’s Sporting Goods is moving decisively toward a more interactive digital commerce model. The company is introducing “Coach by Dick’s,” an AI-powered advisor designed to provide personalized product recommendations and athletic training guidance. Built in partnership with Adobe Brand Concierge, this tool will directly engage customers by combining product expertise with individual preferences and performance goals. The rollout marks a significant step in the company’s larger plan to redesign how customers experience its digital storefront.

The intent is straightforward: deliver relevant guidance in real time and reduce friction in online shopping. “Coach by Dick’s” is set to act as a trusted in-platform resource for athletes and consumers who expect immediacy and accuracy from digital retail systems. By integrating this advisor into its e-commerce backbone, Dick’s is creating a single ecosystem that bridges online discovery, product education, and purchase decisions. This aligns with the company’s broader digital strategy, using AI to personalize interactions and accelerate the shift toward a service-driven experience.

The initiative reflects a deep understanding of the changing retail landscape. Modern consumers increasingly expect their digital experiences to respond intuitively to their needs. AI systems designed around user context and goal-oriented recommendations meet this expectation while generating highly valuable engagement data. For executives, this model shows how AI can advance customer satisfaction and operational insight simultaneously, allowing for faster decision cycles and stronger cross-platform consistency.

Ed Stack, Executive Chairman of Dick’s Sporting Goods, captured this perspective clearly when he said that AI will have a definite impact on retail but will also open opportunities at the same pace. His focus is pragmatic, understand what’s changing, act quickly, and ensure the business captures the upside. This thinking underscores a leadership mindset that views AI not as a disruptive external force, but as a key component of ongoing growth and customer connection.

Key executive takeaways

• AI transforms retail strategy and operations: Retailers are embedding AI across every function, from customer engagement to inventory optimization, to boost efficiency and responsiveness. Leaders should integrate AI strategically to align decision-making, data use, and workforce capability.
• Best buy positions AI as a growth engine: By forging partnerships with OpenAI and Google, Best Buy is evolving beyond traditional retail into a data-driven technology and media enterprise. Executives should view AI as both a catalyst for innovation and a means to elevate employee and customer value.
• Agentic commerce reshapes customer behavior: AI-driven digital agents are changing how consumers shop, interact, and buy. Decision-makers should move quickly to adopt these tools to secure early advantages in personalization, data collection, and revenue growth.
• Gap drives efficiency through intelligence-led design: Gap’s use of AI in design, supply chain, and sales operations is driving steady growth and consistency. Leaders should adapt similar intelligence-led models that enhance productivity and customer connection simultaneously.
• Dick’s sporting goods redefines digital interaction: Through its AI-powered advisor “Coach by Dick’s,” the company is transforming digital commerce into a personalized experience. Executives should invest in AI-driven engagement tools that unite service, insight, and brand loyalty in one ecosystem.