Every time physical retail has faced charges of obsolescence, it has adapted, Placer.ai points out in a new white paper. E-commerce, which many thought would spell an end to brick-and-mortar stores, instead raised consumer expectations for omnichannel integration, speed and clarity of purpose, and retailers who adjusted operations accordingly went on to drive sustained growth.
The advent of artificial intelligence “likely represents another inflection point for physical retail,” according to the white paper, titled Five Ways Retailers Can Leverage AI Without Losing What Works. Key takeaways include the following:
- AI is raising the bar for physical retail as shoppers arrive more informed, more intentional, and less tolerant of friction – though the impact varies by category and format.
- As discovery shifts upstream, stores increasingly serve as confirmation rather than discovery points where shoppers validate decisions through hands-on experience and expert guidance.
- AI-based tools can improve in-store performance by removing operational friction – shortening trips in efficiency-led formats and supporting deeper engagement in experience-led ones.
- By embedding expertise directly into frontline workflows, AI helps retailers deliver consistent, high-quality service despite high turnover and limited training windows.
- AI enables precise, location-specific marketing and execution, allowing retailers of any size to align assortments, staffing and messaging with real local demand.
- Retailers can also use AI to manage their store fleets with greater discipline and understand where to expand, where to avoid cannibalization and where to rightsize based on observed demand rather than static assumptions.
- AI is not a universal lever in physical retail. Its value depends on the store format, and in discovery-driven models it should support operations behind the scenes rather than reshape the customer experience.
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