From the forefront of fashion to your favorite big box store, major retail companies are utilizing artificial intelligence with significant results. Already essential in the design and construction industries, AI is everywhere in retail, and will only continue its growth. 

Across industries, worldwide spending on AI will reach $632 billion by 2028, according to a new forecast from the International Data Corporation. Specific to retail, AI is simplifying processes ranging from the way a customer makes a return to the method with which warehouse inventory is tracked. 

Last year, Honeywell’s AI in Retail Study determined that in 2025, 36% of retailers would invest in AI to improve returns management, while 35% would focus on AI for automating customer service. Also, 32% would use AI to enhance the monitoring of product availability. Simply put, the time is now for AI’s retail revolution. 

Here’s a look at how three companies are transforming their businesses by putting AI to use.

Target: Boosting Worker Efficiency

Target’s tremendous success story is a testament to AI’s capabilities. Last year, the company rolled out a new artificial intelligence tool designed to help store employees quickly resolve on-the-job challenges. Integrated into handheld devices in Target stores, it was leveraged more than 50,000 times by team members since the roll-out started in early 2024, according to CFO Dive.  It provides “straightforward responses” in under a minute on average when asked about issues such as how to sign a guest up for a Target Circle Card or how to restart a cash register after a power outage. Target staff have already shared their satisfaction with the tool, according to CFO Michael Fiddelke. 

“We’ll continue to refine this tool over time based on feedback from our team, but many are already telling us that it’s enhanced their everyday work experience, making it easier and faster for them to help our guests,” Fiddelke shared.

An important piece to note is that this AI tool is only part of Target’s larger effort to put technology to use to empower its workers. More is to come from the company, and other companies need to put the same tools to use to keep up.

H&M: Upping the AI Ante

Swedish retailer H&M was at the forefront of AI. However, they’ve realized they need to “up the ante and are now “in its second wave of the journey,” according to the National Retail Federation. In their New York store, H&M is now exploring sensor technology to help associates better locate garments and make recommendations to help the sale. In their Paseo de Gracia store in Barcelona, H&M installed sensory fitting rooms that “promise to take trying on clothes to a whole new level.” 

Customers are greeted by a visual and auditory experience and are transformed into octagonal mirrored spaces that create illusions and reflect the client’s image from all angles, according to Salir por Barcelona. An interactive screen asks them to choose a language, and then they get to choose their mood and music. A fun and interactive method of engaging customers, H&M’s methods are a conscious decision to make in-person shopping a unique experience. 

Accenture’s research shows over three-quarters of consumers who have fun while shopping are likely to recommend a brand to others, and this ensures the brand will get customers out of the house and into the store.

 “It’s producing great results,” H&M CDIO, Ellen Svanström told CIO. Now we’re looking at code development, and how we can come up with innovative ways to use generative AI in our product development and marketing, but that’s more exploratory.” 

Nordstrom: Blending AI with Immersive Experiences

This past holiday season, Nordstrom transformed their flagship New York City location into a festive visual spectacle with an immersive installation titled “The Blizz on 57th Street.” Inside and out, the store featured a cast of larger-than-life inflatable characters inspired by iconic fictional New York City staples, as well as daily “Santa Snow Shows,” Chain Store Age reported. 

In conjunction with Nordstrom’s refresh to their holiday app, which featured trend reports blending the expertise of Nordstrom stylists and artificial intelligence to deliver relevant trends, these methods are cumulatively working to benefit the evolving customer experience. They are doing so quite successfully: Data company Placer.ai, which measures foot traffic, named the retailer one of its “10 Top Brands to Watch in 2025” because it is outpacing other department stores in attracting young professionals and “educated urbanites,” Seattle Magazine noted last month. When companies establish a solid plan that makes digital and in-person shopping easier, the brick-and-mortar location benefits. 

In addition to the methods we mentioned above, AI is also being used by brands in several other ways, including to reduce theft, streamline returns, and improve demand forecasting. For Target, H&M, and Nordstrom, artificial intelligence is a key component of revolutionizing their presence in the retail world. 

Unfortunately, some companies haven’t taken note: While more than 60% of companies see generative AI as a top three priority over the next two years, only about 35% have a clearly defined vision for how they will create business value from it, according to a survey released in June by Bain & Company. 

To solidify their role in the constantly evolving world of retail, companies must understand that AI is a revolutionary tool that can take their presence to the next level.