Are AI-powered Retail Stores the New Normal?

Walking into a retail store today, you might not notice it, but artificial intelligence is already hard at work. From the layout of the shelves to the way staff shifts are scheduled, AI is quietly transforming how stores operate – and how customers experience them. And it isn’t simply on the horizon, it’s happening now – and it’s opening exciting opportunities for retailers of all sizes to innovate, differentiate, and thrive.
AI in retail
AI in retail has moved well beyond the experimental phase. According to Microsoft and McKinsey, generative AI is expected to boost retail profitability by up to 20% this year. And with 80% of retailers planning to adopt AI tools by 2026, the race is on to turn potential into performance.
Think of a store manager using Microsoft Copilot in Dynamics 365 to generate a sales forecast within seconds. Or a digital assistant that greets customers, remembers their preferences, and recommends products they’re likely to love. These aren’t pilot projects – but live, scalable solutions being used in stores today.
Meet the new store associate: AI agents
An exciting development in the world of artificial intelligence right now is the rise of AI agents – intelligent systems that can reason, learn, and act on behalf of humans. In retail, they’re already being used to power everything from customer service chatbots to in-store digital concierges.
Microsoft’s Copilot ecosystem is leading the way. In Dynamics 365 Commerce, Copilot helps store associates access real-time insights about customers, products, and promotions. It’s like giving every team member their own personal assistant – and one that is always learning and always on.
And it doesn’t just come down to the customer-facing roles. AI agents can also handle back-office tasks like returns processing, inventory checks, and supplier communications. This frees up human staff to focus on what they do best: delivering great service.
Researcher as your strategic wingman
Another new and powerful tool in the Microsoft AI suite is Copilot Researcher. Built into Microsoft 365, it’s designed to help teams tackle complex, multi-step research tasks – like identifying emerging trends, analysing competitors, or building a go-to-market strategy.
Perhaps you’re exploring sustainable fashion. You could ask Researcher to pull together insights from internal reports, market data, and third-party platforms. Within moments, you’d have a curated, contextualised summary ready to share or built upon.
It’s a real game-changer for retail strategy teams who need to move fast and stay informed.
Personalisation that feels personal
AI is also transforming how retailers connect with customers. With tools like Azure Open AI and Copilot templates, brands can now create shopping experiences that feel genuinely helpful – not robotic.
Imagine a customer walking into your store, scanning a QR code, and being greeted by a digital assistant that knows their style, size, and purchase history. It suggests a curated outfit, checks store availability, and even applies any loyalty discounts – all before they’ve spoken to a human.
That’s personalisation that can scale. And it’s what today’s shoppers are expecting more and more. Microsoft’s latest retail capabilities are making this possible with plug-and-play templates for conversational commerce.
Smarter stores with smoother operations
Behind the scenes, AI is driving major improvements in operational efficiency. Retailers are using machine learning to forecast demand, optimise inventory, and automate replenishment. Workforce scheduling is becoming more dynamic, based on real-time footfall and sales data.
Microsoft Copilot and Dynamics 365 helps store managers generate performance summaries, identify trends, and make data-driven decisions faster than ever. And with Copilot Analytics, retailers can also track the impact of AI on key metrics like sales, customer satisfaction, and operational costs. All helping stores run smarter, more smoothly and more profitably.
What is holding retailers back?
Despite the momentum, many retailers are stuck in the early stages of AI adoption. Common barriers can include fractured systems, lac of in-house expertise, and concerns about data privacy.
But the good news is you don’t need to go all-in from day one. Start small. Pilot an AI agent in one store. Use Copilot to streamline a single process. Learn, iterate, reiterate, and scale.
The key is to start.
Where Xpedition comes in
At Xpedition, we help retailers unlock the potential of AI – whether that’s embedding Microsoft Copilot into your operations, designing AI agents to enhance customer service, or building a digital workforce that supports your internal teams.
We’re seeing first-hand how AI can empower people, streamline processes, and elevate customer experience. And we can help you do the same.
The future is already here
The AI-powered retail store isn’t a futuristic concept that’s simply on the horizon – it’s a competitive advantage in modern businesses. And the retailers who embrace it today will be the ones leading tomorrow.
Find out more about starting your AI journey.