Artificial Intelligence is rapidly transforming retail from a static, product‑centric transaction model into a dynamic, personalised experience that feels closer to human interaction than ever before. In 2025, AI isn’t a futuristic promise, it’s shaping discovery, conversion, fulfillment, and loyalty across fashion and lifestyle commerce.
AI at the Heart of Retail Strategy
AI’s role in retail is expanding across every stage of the shopping journey. From personalised recommendations and dynamic merchandising to operational efficiency and inventory forecasting, retailers large and small are embedding AI into their infrastructure.
According to industry forecasts, the global AI in retail market is expected to surpass $14 billion in 2025, growing at a 46.5% CAGR through 2030, reflecting how quickly brands are adopting intelligent systems to stay competitive.
Forward‑thinking platforms are already making this accessible. Shopify’s recently launched “agentic storefronts” allow brands to manage how their products appear in AI platforms such as ChatGPT, Perplexity, and Microsoft Copilot from one dashboard, streamlining AI integration and improving attribution of AI‑driven discovery and conversion.
Personalisation: More Precise, More Predictive
In today’s environment, generic homepage layouts and one‑size‑fits‑all product lists are quickly becoming relics. Retailers are using AI to personalise recommendations based on a shopper’s browsing history, purchase patterns, and inferred preferences.
Brands across retail have integrated recommendation engines at scale. For example, Nike applies AI to suggest styles based on previous searches and product affinities, while Sephora uses machine learning to surface beauty products that align with individual skin tone or preferences.
Personalisation impacts the bottom line. Retailers that implement AI recommendation systems see stronger engagement, higher average order values, and measurable increases in conversion. Even legacy brands - historically slower to adopt cutting‑edge technologies - are making AI a pillar of strategy. Ralph Lauren’s AI “Ask Ralph” tool, for example, co‑developed with Microsoft, acts like a virtual stylist, offering personalised outfit suggestions based on current inventory and user preferences.
Virtual Try‑Ons and Immersive Discovery
AI is also powering immersive experiences that bring digital shopping closer to in‑person exploration. Virtual try‑on technology combines computer vision and AR to allow customers to “see” products on their own bodies in real time — whether it’s eyewear, sneakers, or lipstick. Industry analysis shows that products interacting with AR can increase orders by 27% after 3D display and up to 65% after AR interaction.
Zara, for example, has integrated virtual fitting rooms into its app to help shoppers assess fit and style before buying, reducing uncertainty and returns. Other brands like Nike Fit use AI foot scanning to recommend exact shoe sizes - a critical factor in online footwear conversion.
Smarter Operations Behind the Scenes
Behind the storefront, AI is revolutionising supply chains and logistics, often the area where brands see immediate ROI. Nearly 60% of retailers report that AI improves operational efficiency, and 45% say it reduces supply chain‑related costs, supporting better planning and responsiveness to demand fluctuations.
These predictive systems are particularly valuable during seasonal peaks and flash sale events when inventory needs to match unpredictable demand without overstocking.
Beyond Tech Novelty: A Cultural Shift
AI’s rise in retail reflects a deeper culture shift: customers expect experiences that feel intuitive, personalised, and seamless. Adobe data from Black Friday 2025 showed that AI‑driven traffic to retail sites grew over 800% year‑on‑year, and visitors referred via AI chat platforms were more likely (about 38% higher) to convert than traditional sources.
This kind of “assistive commerce” is reshaping not just how products are found, but why they’re chosen, blurring the lines between research, inspiration, and purchase. For brands, the opportunity isn’t just automating processes, it’s using AI to build relationships that feel personal rather than transactional.
---
Have a story you want to share or partner with us for an event? Get in touch at info@interlaced.co
To keep up to date with our activities and upcoming events, follow us on Twitter, Facebook, Instagram or sign up to our newsletter.
Images belong to their respective owners
