To understand how leaders across the industry are approaching AI, eTail surveyed 100 retail and eCommerce executives and department heads. The findings are clear: 85% of retailers plan to increase their investments in AI within the next year, and many are already realizing measurable benefits—like improved customer retention (42%) and increased employee productivity (41%).

But along with these wins come real challenges—like integration complexity, high costs, and proving ROI. This blog explores the top use cases, innovations, and barriers to adoption that will shape the next chapter of AI in commerce.

Key Insights from Retail and eCommerce Leaders

• AI implementations are “very advanced” in:
  • eCommerce (59%)
  • Marketing (57%)
• 95% will increase AI investment over three years.
• 77% currently use AI for inventory management and demand forecasting.
• 84% have implemented AI-powered chatbots to improve digital shopping.
• Most will explore these AI use cases in the next year:
  • Virtual try-on (57%)
  • Loyalty programs (67%)
  • Voice-activated shopping assistance (76%)
• Most impactful future AI tools:
  • Dynamic pricing (48%)
  • Virtual try-on solutions (40%)
• Most significant challenges:
  • Integration with existing systems (47%)
  • High costs (40%)
  • Measuring ROI (36%)

The Current State of AI in Retail

Artificial intelligence has become a cornerstone of innovation in the retail and eCommerce sectors, revolutionizing operations and customer experiences alike. AI implementation is most advanced in customer-facing functions such as eCommerce and marketing. This indicates that retailers are prioritizing technologies that directly influence engagement and revenue.

However, 36% of respondents describe their operational AI implementation as “not very advanced” or “not advanced at all.” That gap presents a major opportunity for retailers to boost efficiency and accuracy by adopting AI in core business processes like supply chain, logistics, and fraud detection.

AI is already delivering value across the board:

• 46% report faster time-to-market for new products and services
• 42% cite improved customer retention and loyalty
• 41% see increased employee productivity

The industry’s commitment is clear: 80% plan to somewhat increase AI investments over the next three years, and 15% plan substantial increases.

"We're a small and scrappy team... We found we could use existing shots to quickly create variations, like swapping countertops or trying different kitchen styles. This allowed us to simplify our workflow, save time and money, and still meet the needs of e-commerce photography."
— Michael Challinger, CEO, Houzer, eTail Boston 2024

AI Use Cases: From Operations to CX

Internal Operations

Retailers are already leveraging AI to:

• Manage inventory and forecast demand (77%)
• Analyze customer sentiment from reviews and feedback (53%)
• Predict customer behavior to tailor products and messaging (51%)

Emerging operational use cases gaining traction include:

• Sustainability optimization (57%)
• Dynamic pricing (58%)
• Fraud detection and prevention (52%)
• Supply chain optimization (51%)

Customer Experience

AI is already transforming the digital shopping experience:

• 84% of respondents use chatbots for customer service
• 59% provide estimated delivery dates at checkout
• 55% deliver personalized product recommendations
• 54% offer visual search tools
• 53% use automated content generation

Looking ahead, retailers are planning to implement:

• Voice-activated shopping assistants (76%)
• AI-powered loyalty and retention programs (67%)
• Virtual try-on features (57%)
• Personalized digital content journeys (53%)

“We created something called ‘Glasses Eraser’ within our virtual try-on tool... We wanted to take away some barriers and make it less cumbersome for the customer.”
— Sandy Gilsenan, SVP, Warby Parker, eTail Boston 2024

The Innovations That Will Drive the Most Change

Dynamic Pricing

48% say AI-driven dynamic pricing will have the biggest impact. It allows retailers to adjust prices in real time based on demand, inventory, and competitor activity.

Virtual Try-On

40% of respondents expect virtual try-on solutions to transform online shopping, especially in beauty, fashion, and eyewear categories.

The Biggest Challenges to AI Adoption

• Integration with legacy systems (47%)
• High costs of AI implementation and maintenance (40%)
• Difficulty proving ROI and business value (36%)

"To scale AI effectively, we established clear policies and processes... Teams have the autonomy to proceed while still benefiting from AI team guidance."
— Dan Marques, SVP, Crocs, eTail Boston 2024

What’s Next? The Future of AI in Retail

• Personalized, interactive employee training
• Automation of repetitive tasks
• Smarter inventory and logistics management
• Increased personalization in marketing and CX
• Deeper, data-driven decision-making

“AI will handle repetitive tasks, allowing employees to focus on building relationships with customers,” says one IT director.

4 Key Takeaways for Retailers

• Prioritize AI across departments. Especially in operations and logistics.
• Invest in strong data infrastructure. Unified data powers personalization.
• Be proactive about ethics and privacy. Build trust and transparency early.
• Focus on high-impact applications. Start with pricing, virtual try-ons, and chatbots

Download the full report - The Future of AI in Retail and eCommerce

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