Retailers are accelerating AI adoption beyond pilot programs into production systems that drive measurable business results. Lowe's reported that customers discovering and solving problems using its Mylow AI assistant achieve nearly 3X conversion rates compared to standard site or app navigation (Retail TouchPoints). Academy Sports + Outdoors launched Scout, an agent-based search assistant that lets customers describe what they want to accomplish rather than typing product names, creating what the company calls "I wish I knew" discovery moments (Retail TouchPoints). Industry data shows 73% of parents planned to use AI during back-to-school shopping in 2026, up from single digits the prior year (Retail TouchPoints).
The strategic shift involves moving from function-by-function AI pilots to cross-functional process redesign using agentic AI. Store operations has emerged as a high-impact area, with retailers deploying store operation assistants to help district and area managers process data and respond to floor conditions in real time (Retail TouchPoints). Retailers are also implementing "data as a product" approaches, running iterative 12-week cycles to identify high-value use cases and launch models rather than treating data readiness as a prerequisite to AI deployment (Retail TouchPoints).
As holiday 2026 approaches, executives are prioritizing scaling and stabilizing existing AI systems rather than launching new experiments. Retailers recognize that third-party AI tools could position themselves between retailers and customers, making differentiation through exclusive brands, customer data, and proprietary expertise increasingly critical (Retail TouchPoints). Generative engine optimization is becoming essential as AI systems scan product reviews, videos, and contextual usage content rather than just keywords, giving smaller, nimble brands early advantages similar to SEO's emergence (Retail TouchPoints).