By Mark Seavy  

Artificial intelligence (AI) is rapidly being deployed by retailers as they navigate an increasingly complicated market. 

The shift toward widespread use of AI—for design, product development, and retail—was evident this week at the National Retail Federation’s annual conference in New York. At the event, software platforms were discussed in connecting with everything from marketing to logistics planning to personalization. 

“We don’t know where AI is going to take us, but we know it is going to change the world and we’re seeing that right now,” said Ed Stack, Executive Chairman at Dick’s Sporting Goods, which has used AI for logistics and marketing as it expands the large format (120,000 square foot) House of Sport stores from 35 locations to 75-100 locations by 2028. “We are looking at it as a productivity tool rather than a replacement of personnel and I think it will change everything we are doing.”  

When it comes to introducing these new AI-powered tools or platforms, retailers are taking a variety of approaches.  

Google is working with a number of retailers, including Shopify, through its Gemini Enterprise for Customer Experience, which helps create autonomous agents (“agentic AI” in tech parlance) that manage customer queries without humans. The AI agents reportedly have the ability to reason, plan, and execute tasks tailored to consumer demands and manage everything from product recommendations to post-purchase support. In doing so, these AI agents use datasets designed to anticipate needs before they arise. 

Walmart is deploying Google’s Universal Commerce Protocol (UCP) AI standard both for the drone-based Wing delivery service as well as more broadly across its platform. The retailer is expanding the Wing service, which has so far been made available at 150 stores in the U.S. The program will grow to 270 locations by 2027. About 50% of Walmart customers in Atlanta that use delivery are opting for the drone service, Google executives said. 

“We are in a different period, and we are willing to change in what we sell, how we interact with customers, and other things that we are doing,” said John Furner, President and CEO at Walmart U.S. “We are rewriting the retail playbook in trying to close the gap between ‘I want it’ and ‘I have it.’ The future is very personalized, convenient, and high speed.” 

With the pace of innovation quickening, tech companies are rushing to meet demand. Google, for its part, established two 10-person teams at Google Labs to develop AI. And it’s not just global retailers that are focused on AI. Regional chains are implementing the technology as well, but not without fits and starts.  

Ocado, for example, which develops and deploys grid-based robotic systems for grocery and other warehouses and operates its own service, recently parted with the Kroger grocery chain. The companies signed an agreement in 2019 to develop a 20-warehouse network but ended the pact last fall before reaching full deployment. Six warehouses for eCommerce delivery will remain. With the ending of Kroger’s exclusive agreement for North America, Ocado has sought new partners, and The Gap is building a new AI-equipped warehouse in Ontario, Canada, Ocado executives said.  

Women’s intimate apparel supplier Thirdlove, on the other hand, is in the process of selecting an AI agent, a task it expects to complete in Q1, Chief Marketing and Digital Officer Amy Carr said. Thirdlove signed an agreement with agent developer Bloomreach in March, but is evaluating other platforms as well, Carr said. Thirdlove, which has raised $98.6 million in funding since its founding in 2012, plans to expand its retail stores to 14 locations (up from three) by 2027. 

Meanwhile, Singapore-based FairPrice Group, which operates more than 370 grocery and Cheers convenience stores, has introduced AI-based robots and in-store cameras across locations for inventory management.  

And the Germany-based pharmacy chain DM-Drogerie Markt, which operates more than 4,000 locations across 14 European countries, has deployed AI robots for inventory management in 270 stores in Germany since 2023. It has Ubica Robotics’ shelf scanning robots, which use cameras and sensors along with AI algorithms to create digital twins of store layouts to provide pricing and stocking information. 

“In a year in which consumer households are watching every dollar, retailers are delivering value with prices kept as low as possible for essentials and products with options across every budget,” said Bob Eddy, President and CEO at BJ’s Wholesale, which uses Simbe Robotics’ Tally AI-based robots for tracking to ensure stock levels, price accuracy, and product placement across its stores. “This can be done with AI and that does not mean a reduction in people but rather solving complex problems. We have stores that have $40 million in [annual] sales and others with $200 million. The logistics replenishment is wildly different. Even a very good logistics person has difficulty with that. AI can do it in ten seconds. The next chapter of retail is not years away because it is already unfolding and we need to shape it together.”