Disruptors like Shein and TikTok are redefining engagement, raising the bar for seamless omnichannel experiences and hyper-personalization. At the same time, macroeconomic pressures, rising costs, inflation, and supply chain disruptions, are forcing businesses to reconsider traditional revenue streams.
In PwC’s 27th Global CEO Survey, 76% of leaders acknowledge the need for reinvention, yet many remain uncertain about where to start. AI is the key to unlocking new business models, increasing agility, and driving profitable growth. By embedding AI across their organizations, retailers can transform every aspect of their operations, from supply chain resilience to customer experience, marketing, and workforce productivity.
The next era of retail will be shaped by those who move beyond incremental change and embrace AI-powered reinvention. The question is no longer if AI should be adopted—it’s how fast retailers can integrate it to remain competitive in an AI-driven economy. What was once a competitive advantage is now essential for survival.
Reinvention is about fundamentally changing your business model—exploring new revenue streams, profit streams, or even entirely different businesses. Transformation is what enables reinvention.
With 76% of retail leaders recognizing the need for reinvention and 42% of CEOs questioning their company’s long-term viability, AI is the catalyst for change. Despite this urgency, only 7% of revenue over the past five years has come from distinct new business models, revealing a critical gap that AI can help bridge.
Retailers that embed AI across their operations are securing a competitive advantage. With 49% of CEOs expecting generative AI to increase profitability within the next 12 months, AI has moved from an operational enhancement to a core driver of business reinvention. Those that hesitate risk being left behind in an AI-driven economy.
There’s no more room for skeptics. AI is here to stay and you’re at a competitive disadvantage if you don’t adopt AI as part of your enterprise-wide strategy.
Ali Furman, Partner, US Consumer Markets Industry, PwC USAI is reshaping retail by enhancing efficiency, streamlining operations and transforming customer interactions:
Imagine interacting with your favorite brand and having an individualized experience based entirely on your preferences, product availability, order history and even your family’s needs. AI makes that possible.
Beyond operational efficiencies, AI is redefining what’s possible in retail. Retailers that fully embrace AI are not just improving performance, they are unlocking entirely new business models, creating differentiated customer experiences, and driving long-term growth.
Retail Data Monetization
AI transforms customer insights into new revenue streams through advertising networks and predictive analytics for suppliers.
Hyper-Customization & AI-Powered Personalization
AI enables dynamic pricing, real-time promotions and individualized product recommendations, delivering hyper-personalized shopping experiences at scale.
Social Commerce & AI-Driven Shopping
AI enables real-time personalization in social media and video shopping, boosting conversion rates.
Seamless Omnichannel Journeys
AI integrates online and in-store experiences, enabling higher customer engagement and retention.
AI-Accelerated Product Innovation
Generative AI enhances R&D capabilities, allowing retailers to rapidly develop and test new products, bringing innovations to market faster and more affordably.
AI-Driven Pricing & Merchandising
AI dynamically adjusts prices in real-time based on demand, competition, and supply chain fluctuations.
Sustainability as a Business Driver
AI minimizes waste, optimizes production, and ensures compliance with sustainability goals.
In-House AI Capabilities & Cost Reduction
Retailers are leveraging AI-driven automation to reduce reliance on third-party vendors, enabling in-house software development, lowering costs, and improving control over proprietary data and models.
AI-Enhanced Workforce Productivity
AI decreases manual tasks, reducing labor costs while improving efficiency in scheduling, training and workforce management.
AI-Powered Security & Fraud Prevention
AI-driven computer vision and predictive analytics reduce shrinkage, fraud and operational risks
AI isn’t just about automating tasks—it’s about empowering people to unlock productivity, unleash creativity and ultimately accelerate outcomes.
One-size-fits-all strategies rarely succeed in retail. PwC US’s Retail Archetypes provide a roadmap for aligning transformation efforts with unique market strengths:
These archetypes provide a roadmap for retailers to identify strategies that align with their unique needs and strengths. To explore more, read PwC US’s Reinventing Retail Business Models for in-depth insights into how these strategies align with business goals.
We’re seeing organizations think horizontally across functions and workflows. It’s not just about isolated use cases anymore; it’s about creating end-to-end value.
Retailers that succeed with AI don’t just automate tasks; they rethink their entire business models. To stay competitive, companies must focus on five critical areas, from AI governance to ethical deployment.
These five missions provide a roadmap for retailers to structure their AI transformation effectively. By focusing on governance, platform strategy, data access, ethics, and AI literacy, leading brands are securing their competitive advantage in an AI-driven economy.
1. Organize for AI Delivery
To scale AI impact, retailers need a structured operational model.
2. Balance Platform Strategy & Innovative Tooling
AI adoption requires robust platform integration and tooling to maximize scalability.
3. Enhance AI Maturity & Access to Strategic Data Assets
Unlocking AI’s full value requires high-quality data and seamless integration.
4. Proactively Address AI Ethics & Regulation
Trust and governance are critical for responsible AI deployment.
5. Democratize AI & Foster Data Culture
AI success depends on organization-wide literacy and adoption.
Retailers that move quickly to integrate AI will gain a competitive edge, while those that hesitate risk being left behind in an AI-powered economy.
Retail is undergoing a seismic shift. AI is no longer an optional investment—it’s the foundation of future growth. Forward-thinking retailers who embrace AI today will be the industry leaders of tomorrow.
The next step is clear: assess your AI maturity, develop an enterprise-wide AI strategy, and embrace the transformation before your competitors do.
PwC and Microsoft are ready to help you develop an AI-driven strategy that enhances customer experiences, optimizes supply chains, and unlocks new revenue streams. Connect with one of our Retail Industry Leaders today to begin your AI transformation journey.
Guest Contributor
Mike Edmonds
Sr. Director, Strategy, Worldwide Retail, Consumer Goods & Gaming at Microsoft
Our Global Centre for Crisis and Resilience co-leader Dave Stainback is joined by Matthew Duffey, PwC's Global Leader for Business Model Reinvention, to explore the critical need for Business Model Reinvention and resilience in today's fast-paced business world, and how crises can serve as catalysts for transformation.
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