From tailored shopping recommendations to smarter inventory management, AI is transforming how retailers engage with customers and optimise their operations. But to truly capitalise on its potential, Australian retailers need to think beyond immediate gains.

AI can deliver quick wins, but its true power lies in driving long-term growth by enhancing decision-making and uncovering new revenue opportunities. Retailers who adopt a forward-thinking strategy will set themselves up for long-term success. 

Lay a solid foundation 

Retailers need to focus on three key areas: data quality, flexibility, and transparency.

  • Good data leads to better decisions. If the information going into an AI system is messy or incomplete, the results will be unreliable. Simple tools that clean up data and keep everything organised help retailers forecast demand, manage stock, cut waste, and improve customer service.
  • The tools retailers use should be able to grow with the business. Retailers need systems that can handle challenges such as increased traffic and long-term expansion without constant upgrades. During busy seasons like holidays, their systems should be able to support higher transaction volumes and additional inventory management needs. Cloud-based solutions are a good option because they automatically scale to accommodate growing demand and can be customised to suit both a small shop and a large online store.
  • Transparent use of data builds customer trust. Being open about how customer information is used helps build trust. If an online store recommends products based on past purchases or browsing history, clearly explaining this makes the experience feel helpful rather than intrusive. Shoppers should know whether suggestions come from their own activity, popular trends, or paid promotions. A recent Mailchimp report found trust influences purchase decisions for 46% of Australian shoppers.

Blend technology with a personal touch

After selecting AI-powered tools that best suit their needs, retailers must learn how to use them effectively. Predictive AI can increase operational efficiency by 20–30% while improving customer satisfaction by 10–15%. It can be a game-changer for retailers, allowing them to anticipate customer behaviour, customise interactions and solve issues in real-time. But relying on AI alone isn’t enough. 

But while it analyses data and spots patterns, it can’t replace human qualities like empathy and good judgment—essential for building real customer connections. To succeed, retailers need to blend this technology with human insights. 

AI can flag common problems and suggest fixes, but people bring the emotional intelligence to solve them. The best results happen when AI handles the heavy lifting of data analysis, and humans bring the personal touch to ensure the right outcome is achieved. 

Getting this balance right takes planning. Retailers who train staff to work with AI can save time on repetitive tasks and focus on creativity and human interaction. If businesses foster AI literacy across teams—from sales to customer service—they will be well-positioned to make the most of this powerful technology, while keeping a personal connection at the heart of their service.

Elevate personalisation with AI-driven tools 

Personalisation has become key in the modern retail experience. AI helps power it by analysing vast amounts of data and allowing retailers to segment audiences with greater precision. This can mean grouping customers based on their shopping habits, interests, or past purchases. Retailers can identify frequent buyers, bargain hunters, and those who might stop shopping soon, using this information to send tailored offers and recommendations—and adjust in real time. The result is often smarter targeting and better engagement. In fact, Marketers see 2x more revenue on an average when they use Mailchimp’s AI-built predicted segments. 

Predictive analytics go hand in hand with automation, helping retailers work more efficiently. Some AI-powered tools can handle repetitive tasks, like chatbots answering customer questions without human help, or send timely recommendations that keep shoppers interested. According to a recent Forrester report commissioned by Mailchimp, 68% of marketers agree that increasing marketing automation is crucial. 

Maximise AI’s impact on retail

Retailers that integrate AI thoughtfully will gain a competitive edge, but success often hinges upon more than just adopting the latest technology. The key is to use AI in a way that supports the goals of the business, ensuring it complements—and doesn’t replace—human expertise. 

The future of retail belongs to those who can strike the right balance—leveraging technology for efficiency while preserving the authenticity and emotional connection that customers value. By staying agile and customer-focused, retailers can turn AI from a tool into a true competitive advantage, driving both immediate gains and durable success.

Anthony Capano is the regional director for ANZ, Intuit Mailchimp