Sales Strategy
AI’s Real Impact on Retail and How to Respond November 24, 2025 (0 comments)
Boston, MA--AI isn't the future of retail; it is the present. Boston Consulting Group (BCG) argues that to win, retailers must become "AI-first," making AI and autonomous agents central to operations and decision-making.
[Image via iStock.com/AndreyPopov]
The article identifies four forces driving this urgency:
- Consumer Adoption: Two-thirds of US consumers use AI to shop. Walmart now allows purchases directly within ChatGPT.
- Enterprise Readiness: Models are faster, cheaper, and capable of automating complex workflows.
- Competitive Pressure: Retail is now a top-three industry for AI investment growth.
- Talent Scarcity: With 40% of major retailers adding senior AI roles, top talent is becoming hard to secure.
Strategies for the New Consumer Interface
Platforms like ChatGPT and Perplexity are shifting from browsing to active recommendation. As per the article, nearly half of consumers now trust AI recommendations over friends. To remain visible, retailers must master "answer engine optimization"—ensuring chatbots recommend their products.
BCG outlines three strategic approaches for interacting with AI platforms:
- The Destination Game: Retailers bypass AI platforms to protect margins, relying on brand uniqueness. Trader Joe’s exemplifies this, keeping its inventory off Instacart to drive direct store traffic.
- The Evaluation Game: Retailers integrate with platforms to compete on utility, price, or speed. Publix plays this role effectively as the largest grocer on Instacart.
- The Hybrid Game: A balance of reach and relevance. Sephora sells via Instacart but retains its best promotions for its proprietary app.
Internal Transformation and Leadership
Internally, AI is evolving from automating tasks to orchestrating decisions. The article highlights Walmart using AI to automate vendor negotiations and Starbucks employing it for barista onboarding. The "merchant of the future" will manage teams of AI agents responsible for pricing, inventory management, and contract negotiation.
To achieve this, the article notes three required organizational shifts:
- Rewire the Operating Model: Move from rigid hierarchies to flat, cross-functional teams where agents enable real-time decision-making.
- Change Leadership: Leaders must be practitioners, not cheerleaders. Success depends 70% on people and change management, not just code.
- Redirect Spend: Automate manual tasks and reinvest the savings into high-quality data and scalable agent infrastructure.
Learn more in this article by Boston Consulting Group.