The Future of Retail: How AI-Powered Technologies Are Transforming Customer Experience
Brick-and-mortar businesses and e-commerce stores alike are rapidly expanding their use of technology. Artificial intelligence (AI)-powered new retail technologies are opening innovative avenues for improving customer experience and engagement.
According to a recent survey by business mobility and IoT solutions provider SOTI, 73% of U.S. consumers favor self-service retail technologies in stores.
While mobile shopping is already mainstream, virtual reality (VR) and augmented reality (AR) are now stepping into the spotlight. These emerging trends enable businesses to meet customers where they are—with personalized offers, immersive experiences, and exceptional service.
This article explores three major new retail technologies reshaping customer-facing experiences today.
Table of Contents
#1. Beacon Technology
Beacon technology, introduced by Apple in 2013 as part of the iBeacon protocol, is set for exponential growth. According to research from Global Market Insights, the beacon market is projected to exceed $25 billion by 2024.
This technology allows businesses to deliver hyper-personalized experiences by connecting physical spaces with mobile apps. Successful use cases include:
- Mapping in-store customer journeys
- Delivering targeted content and real-time information
- Sending discounts and coupons to nearby shoppers
- Powering mobile-first loyalty programs
- Promoting on-premise events
- Increasing conversion rates and in-store sales
Imagine walking into your favorite fashion store when your phone beeps—it’s a push notification from the retailer’s app welcoming you back. Seconds later, it alerts you that the trousers you viewed last week are now on sale.
That’s not sci-fi—it’s exactly what Macy’s achieved with their Black Friday “Walk in and Win” campaign. By embedding Bluetooth beacons into their marketing strategy, Macy’s boosted app usage and retention 16x.
Beacon technology is redefining proximity marketing, creating deeper engagement and driving measurable sales results.
#2. Visual Search
While visual search isn’t entirely new, it’s emerging as one of the most disruptive forces in modern retail. Gartner predicts that by 2025, brands optimizing for visual and voice search could see up to 30% more e-commerce revenue.
What Is Visual Search?
Like traditional keyword searches, visual search interprets user intent—but through images. By uploading a photo, users can instantly find visually similar products, powered by AI algorithms.
This dramatically shortens the conversion path. Shoppers no longer need to describe what they’re looking for—they simply snap, search, and shop.
Real-World Example: Pinterest and Target
Pinterest Lens exemplifies visual search in action. It allows users to identify real-world objects and discover related products directly in the app.
Target, one of the early adopters, integrated Pinterest’s visual search into its app and website. With just an image upload, users can:
- Get detailed product information
- Check stock availability
- Locate the product in nearby stores
- Compare prices
- Browse similar or complementary items
This seamless experience not only simplifies discovery but also boosts engagement and conversion.
#3. Augmented Reality (AR)-Enabled Retail Experiences
Among all new retail technologies, augmented reality (AR) is arguably the most transformative. It bridges the gap between digital and physical shopping by letting customers “try before they buy”—virtually.
By integrating AR into their processes, retailers can:
- Reduce inventory and showroom costs
- Lower staffing requirements
- Provide interactive, personalized experiences
Example: IKEA Place
With its “Try before you buy” motto, IKEA’s Place app lets users preview true-to-scale 3D models of furniture in their homes. Customers simply select an item, point their phone at a space, and visualize how it fits—down to the color, texture, and size.
The result is a more confident, informed purchasing decision and a memorable shopping experience.
Michael Valdsgaard, IKEA’s former Head of Digital Transformation, captured the vision perfectly:
“It could eventually be that you put in contact lenses and you don’t need to look at a phone anymore.”
The New Retail Paradigm
The line between e-commerce and physical retail is fading. To stay competitive, businesses must invest in retail technologies that enable customer-centric, data-driven experiences.
Whether it’s deploying beacons for proximity marketing, enabling visual search for faster discovery, or integrating AR for immersive product experiences—the future of retail is here.
Forward-thinking companies are already embracing this transformation. Those who follow suit will not only enhance customer satisfaction but also redefine what modern shopping means.
Ready to transform your retail experience with next-gen technologies? Explore how AI, AR, and smart integrations can help your business deliver personalized, seamless, and future-ready customer journeys.