Retail Stores Are Striking Back with AI and Connected Technology
Physical retail is entering a critical new phase of transformation, with technology and AI driving efficiency, personalization, and monetization, according to a new report from Bain & Company and VusionGroup. Released at NRF Europe 2025 in Paris, the study finds that retailers are no longer experimenting with tech—they see it as essential and foundational.
Retailers are rapidly adopting integrated platforms that combine digital shelf systems, AI-powered insights, and retail media capabilities, transforming stores into intelligent, connected environments where commerce, media, and data converge.
“Retailers are accelerating tech adoption not just to keep up but to lead,” said Mauro Anastasi, partner in Bain’s Retail practice. “The winners will be those who build scalable, integrated platforms delivering measurable ROI and future-proofed operations.”
Four Technologies Driving Store Transformation
Bain and VusionGroup identify four areas central to modernizing physical stores, aligning with top retailer priorities: product availability (56%), price integrity (53%), customer engagement (45%), and staff productivity (39%).
- Store Staff Co-Pilots: Nearly half of retailers are using AI assistants to manage routine tasks such as inventory checks, price corrections, and equipment troubleshooting. This boosts productivity and morale, allowing staff to focus on customer interaction.
- AI-Driven Customer Insights: About 73% of retailers are deploying advanced analytics to personalize assortments and predict demand, using in-store traffic patterns and purchase behavior to optimize shelf placement and product availability.
- E-Commerce Fulfillment Integration: Stores are evolving into hybrid fulfillment hubs, handling both walk-in customers and online orders. Technologies like computer vision, pick-to-light, and demand forecasting improve efficiency while maintaining in-store experiences. Thirty percent of retailers have scaled in-store fulfillment.
- Digital In-Store Retail Media: Smart displays and digital shelf tags are turning aisles into monetizable media spaces, allowing brands to advertise at the point of purchase. Nearly a third of retailers expect store layouts to evolve for retail media and experiential formats in the next five years.
Investment Priorities and Barriers
Three in five (60%) C-level executives prioritize store technology investments over other strategies. Nearly half (44%) expect a bottom-line improvement of at least 1.5 percentage points, while 70% anticipate recovering investments in under three years.
Despite momentum, adoption hurdles remain: slow internal decision-making (43%), security and compliance concerns (40%), and high costs (32%).
Best Practices for Success
The report advises that retailers should:
- Address real operational pain points like out-of-stocks and pricing errors.
- Focus on integrated platforms rather than isolated tools.
- Invest in upskilling store teams to maximize AI and tech adoption.
- Align financial models with blended online-offline shopping behaviors.
“By combining AI, computer vision, and data with digital shelf systems, retailers are improving operations, speeding inventory turns, and unlocking new monetization opportunities,” said Jérôme Hamrit, SEVP of Data & Retail Media at VusionGroup.
As retail tech adoption accelerates, connected, intelligent stores are no longer a luxury—they are a necessity for competitive advantage, operational efficiency, and revenue growth.
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