AI could give physical retail what e-commerce has long had: a real-time understanding of shoppers, their behaviour and what might influence their next purchase.
Santhosh Subramaniam19 Aug 2026
05:00IST
New Update
While the digital shopping boom dominates headlines, the real heart of Indian retail still beats in physical stores. As per recent research, about 30% of internet users in India shop online. While e-commerce is rapidly growing and capturing a much larger share of the total retail spend, physical stores remain the vital space where most consumers connect with brands and make their final buying decisions.
To maximise the value of these physical spaces, retailers are modernising their operations through advanced digital transformations. Computer vision and artificial intelligence are giving retailers new ways to understand and respond to what happens inside the store before a purchase is made. By converting video feeds and in-store data into actionable insights, these technologies can help retailers make better decisions about customer engagement and store operations.
Understanding shopper behaviour in real time
Retailers have long relied on sales data to understand customer preferences. While valuable, sales data only reveals the outcome of a shopping journey. It offers little visibility into how customers navigate the stores, engage with products, or respond to promotions before making a purchase.
Computer vision provides insight into the moments that shape customer choices, helping retailers track how shoppers move through stores, interact with products and promotions, and make purchase decisions. It also supports frictionless checkout experiences and helps retailers identify patterns that would be difficult to detect through sales data alone. This creates a more complete view of the customer journey while the shopping experience is still unfolding.
These insights create opportunities to improve merchandising, refine store experiences, and make customer engagement more relevant. By turning physical stores into intelligent environments, brands can move beyond passive display tactics and instead foster active, data-driven interactions that respond to shoppers’ needs in real time.
Delivering more contextual customer experiences
Understanding shopper behaviour is only the first step. Retailers can create greater value when those insights are used to make in-store experiences more relevant and responsive.
Today, shoppers are used to shopping on their own terms, and honestly, there’s no going back. 76% of shoppers now expect brands to offer personalisation. Trying to recreate that quick, digital magic inside a brick-and-mortar store is a massive challenge.
But AI is helping bridge that gap. It links what someone does online with their real-world visits, turning what used to be a fragmented journey into a smooth interaction. Wherever they shop, the experience feels exactly the same: personal, relevant, and seamless.
This isn’t just about keeping customers engaged; it’s about directly hitting the bottom line. Today, around 90% of top marketers link personalisation to profits. As physical stores get smarter, retailers can finally bring these highly tailored digital experiences into the real world in ways that used to be impossible.
Scaling intelligence across the store network
As retailers expand these capabilities, scaling intelligence consistently across large store networks becomes the next priority.
AI factories are becoming increasingly important in this effort. They provide an environment for governing AI systems and deploying them consistently across the enterprise. Rather than treating computer vision and AI as standalone technologies, retailers can embed intelligence into everyday store operations and create a foundation for continuous improvement.
AI factories also help retailers operationalise insights across their store networks. Information generated within physical locations can be used to make in-store experiences, promotions, and retail media networks more relevant to shoppers’ contexts. As agentic capabilities mature, intelligent systems will increasingly be able to recommend and coordinate actions in response to changing store conditions.
Preparing for the next generation of stores
The role of the store is increasingly beginning to expand beyond product discovery and transactions. As computer vision and AI capabilities continue to mature, stores will further become adaptive environments that can interpret shopper behaviour and respond in real time.
Retailers that establish the foundations to scale these capabilities across their store networks will be better positioned to build intelligent stores that adapt more effectively to customer needs and changing business conditions.
(Santhosh Subramaniam is AVP and Head of the Domain Consulting Group for Consumer, Retail and Logistics at Infosys. He is recognised as an AI evangelist and digital transformation leader, with a focus on retail, consumer packaged goods (CPG), and supply chain ecosystems.)
artificial intelligenceAIRetailinnovationCustomer Experience
afaqs! CaseStudies : From early roots to everyday relevance. Explore the brand journeys.
