The Transformative Impact of Artificial Intelligence on Retail: Adoption, Challenges, and Future Prospects

Artificial Intelligence (AI) is revolutionizing the retail industry by enhancing operational efficiency,customer experience, and decision-making processes. This study examines the impact of AI on retail,focusing on adoption trends, benefits, challenges, and future implications. A mixed-method approach wasemployed, combining primary data from 156 retail professionals and secondary data from academicliterature. Findings indicate that AI applications such as chatbots, demand forecasting, and personalizedmarketing significantly improve inventory management, customer engagement, and cost reduction.However, challenges like high implementation costs, data privacy concerns, and workforce displacementhinder widespread adoption. Regression and correlation analyses reveal that AI positively influencesbusiness efficiency but faces resistance due to integration complexities. The study concludes that while AIoffers transformative potential, retailers must address ethical concerns, invest in employee training, andensure secure data practices to maximize benefits. Future research should explore AI’s long-term economicand social impacts on retail employment and consumer behaviour.