The retail industry is undergoing a transformative shift, and artificial intelligence (AI) is at the forefront of this change. Honeywell’s recent AI in Retail Survey reveals a compelling trend: over 80% of retailers plan to enhance their use of AI and automation by 2025. This surge in investment aims to adapt to evolving consumer demands, enhance employee skillsets, and streamline operations for a seamless shopping experience.
The Growing Role of AI in Retail
AI is no longer a futuristic concept for retailers; it’s a necessity in today’s fast-paced, omni-channel landscape. Honeywell’s research highlights that retailers are turning to AI to solve critical challenges, such as:
- Managing product returns more efficiently.
- Automating customer service interactions.
- Monitoring product availability in real-time.
David Barker, President of Honeywell Productivity Solutions and Services, emphasizes the transformative power of AI in retail:
“We are truly in the midst of a new era for the retail sector where evolving AI capabilities will make a positive impact on the shopper’s journey, the employee experience, and the retailer’s supply chain operation.”
Why Retailers Are Investing in AI
Retailers recognize AI’s ability to provide actionable insights, improve employee satisfaction, and enhance the shopping experience. According to Honeywell’s survey, 35% of major retailers plan to make significant investments in AI to address current pain points and prepare for the future.
AI’s Impact on Employee Experience
One of the most striking findings is how AI is reshaping the workplace for retail employees:
- Over half of retail leaders reported that AI improves employee retention.
- 52% of executives believe AI tools help employees advance their careers, strengthen soft skills, and continuously add value to their roles.
- 60% of retail executives stated that AI tools simplify tasks, making jobs easier for employees.
AI’s role in enhancing job satisfaction is becoming increasingly evident. By reducing workload burdens and providing tools for efficiency, AI fosters a more supportive work environment. This aligns with the industry’s broader goal of filling the estimated 580,000 U.S. retail job openings projected for 2025.
AI as a Driver of Customer Experience
Retailers are also leveraging AI to transform how consumers shop, both online and in stores. From chatbots to price comparison tools, AI is revolutionizing customer interactions. Key insights from Honeywell’s survey include:
- 66% of shoppers have used AI while shopping. This includes activities like asking questions via chatbots, comparing prices across retailers, or summarizing customer reviews.
- Price comparison is the most popular use case for AI, with 53% of consumers using it to find the best deals.
- Checking product availability (41%) and streamlining the checkout experience (34%) are other highly sought-after applications of AI.
By integrating AI, retailers are not only addressing consumer pain points but also delivering faster, more personalized shopping experiences.
AI in Holiday Shopping: The New Norm
Honeywell’s research specifically examined AI’s role during the holiday season—a critical time for retailers. AI solutions were found to help retailers manage inventory, automate customer queries, and ensure smoother checkout processes. These capabilities reduce the stress of holiday shopping for both consumers and retail staff.
Survey Methodology: A Snapshot
The Honeywell AI in Retail Survey provides valuable insights backed by robust research. Here’s an overview of how the data was collected:
- The Retail Executives Survey polled 100 U.S. executives with at least Vice President-level seniority from companies generating over $100 million in annual revenue.
- The Retail Consumers Survey gathered insights from 1,000 U.S. adults aged 18 and older.
- Both surveys were conducted via email and online formats between December 2 and December 8, 2024.
These comprehensive findings showcase the perspectives of both retail leaders and consumers, highlighting AI’s growing importance across the industry.
What’s Next for Retail AI in 2025?
As AI adoption accelerates, its influence will extend across multiple facets of retail, including:
- Enhanced Supply Chain Operations: Retailers will increasingly rely on AI to optimize inventory, predict demand, and manage logistics.
- Improved Personalization: AI-driven insights will enable retailers to offer tailored product recommendations and targeted marketing campaigns.
- Upskilling Employees: Training programs enhanced by AI will equip retail staff with the skills needed to navigate a tech-driven work environment.
- Sustainability Initiatives: AI will support eco-friendly practices, such as reducing waste through better demand forecasting and inventory management.
Final Thoughts: AI as a Competitive Edge
Honeywell’s findings underscore that AI is no longer a “nice-to-have” for retailers; it’s a critical tool for staying competitive. By addressing operational challenges, improving employee satisfaction, and enhancing the customer experience, AI is poised to redefine the retail landscape.
For retailers, the message is clear: investing in AI isn’t just about keeping up—it’s about thriving in a dynamic, consumer-driven world. As 2025 approaches, the adoption of AI and automation will undoubtedly be a game-changer for the industry.