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How Artificial Intelligence is Transforming Brick-and-Mortar Stores

Brick-and-mortar sales are not fading anytime soon. It is projected that 83% of goods purchased globally in 2022 will still be bought in-store according to Euromonitor International. As brick-and-mortar stores are making a comeback with millennials and Generation Z, updating in-store technology is the optimal way to improve the real-world shopping experience.

Artificial Intelligence (AI) has become a key element in the digitalization of in-store retail by personalizing the customer experience and creating a more engaged business-to-consumer interaction. According to a report published by Fortune Business Insights, the AI in retail market size was valued at USD 2,306.8 million in 2018 and is estimated to reach USD 23,426.3 million by 2026, exhibiting a CAGR of 33.7% during the forecast period. Also, according to an article published by Forbes, 83% believe AI is a strategic priority for their businesses today and 84% of respondents say AI will enable them to obtain or sustain a competitive advantage. The growing awareness about the advantages of AI in retail operations such as quality improvement, paced up decision making, strong operational agility, and enhanced customer experience will be the main drivers for the growth of AI in retail market for the forthcoming years.

So, what is artificial intelligence? Artificial intelligence, at its core, focuses on making machines intelligent or capable of solving problems as well as people can. Today, AI can make machines learn from experience, adjust to new inputs, and perform human-like tasks. It quickly combines large sets of data with fast, iterative processing and detailed algorithms, which allow the program to learn automatically from patterns in the data.

But what does AI mean for retailers? No matter how big or small the retail location, many businesses can benefit from integrating AI into their daily functions. From daily task management to gaining customer insights, AI is the foundation of technology in a retail setting. Utilizing artificial intelligence can free up time for business owners by completing daily tasks, which allows them to dedicate more time to advancing their overall business strategy. In addition, AI can even gather detailed customer patterns and preferences, which leads to more informed business decisions in the long run. When customer and sales data is processed through these algorithms, the AI model discovers actionable information about a business and its customers and inventory.

As e-commerce disrupts the traditional brick-and-mortar sales channel, retail has transformed into an “experiential retail” model. Just as e-commerce sites are providing a revolutionized customer experience, in-store retailers must follow suit. Environments that attract and excite customers are supported by technological components, which are beneficial to both business and consumer. Moving forward, retailers will continue to employ cutting-edge technology, like artificial intelligence, in order to provide personalized offerings and engaging environments.

To make the reinvention of in-store shopping worthwhile, retailers need to reimagine the whole in-store experience, and technology is key. In-store technologies must be able to solve business processes and incorporate planning and strategy, rather than just implementing flashy, PR-driven technology. It is crucial that retailers effectively merge technology and function, which is why AI is at the forefront of in-store tech.


Cyclops is a retail analytics system that can help retailers generate insights into how their customers shop inside their stores. To understand more about how Cyclops can help retailers digitally transform their stores amid the COVID-19 pandemic, visit our website:


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