The next-generation retail store

Over the past 2 years, we have all needed to adopt new hybrid approaches to working, parenting, socializing—and shopping. The emergence of “hybrid shopping,” which blends in-store digital and physical touchpoints, was born out of necessity but has become mainstream. In fact, hybrid shopping is the primary buying method for 27% of all consumers and 36% of Gen Zers. And across all ages, nearly 3 in 4 (72%) consumers overall depend on stores as part of their primary buying method.

This creates both a challenge and an opportunity: how can retailers seamlessly weave together hybrid shopping experiences that traverse online, in-store, mobile, and virtual channels within a single customer journey?

The Cognitive Store is a key aspect of this new landscape. Representing our vision for the store of the future, the Cognitive Store embodies AI in retail. It’s an AI-driven, digitally transformed physical location that delivers differentiated personalized shopping experiences through interaction with superpowered associates, is orchestrated by intelligent workflows that are proactively supported by a smart operations center, and is powered by a Store Operating Platform.

How can retailers seamlessly weave together hybrid shopping experiences within a single customer journey?

The Cognitive Store is digitally transformed, embracing AI at its core to enable key capabilities across 5 areas:

• Personalized shopping experiences. The Cognitive Store incorporates hyper-localized, hyper-personal insights from both digital and physical interactions—for example, knowing the context behind the customer’s visit and delivering “Next Best Action” recommendations in real time.
• Superpowered associates. Equipped with AI assistants, these store associates can facilitate meaningful contextual exchanges with consumers across virtually all touchpoints.
• Intelligent workflows. The rapid evolution of shopping behavior is driving the need to proactively optimize in-store business processes such as buy online/fulfill in store, in-store purchase journeys, management of store-level inventory and on-shelf availability, and replenishment, shipment intake, and local deliveries.
• Operations center. This serves as a hub that proactively monitors store operations and efficiently handles incidents, changes, and problems to facilitate fast resolution.
• Store Operating Platform. This platform powers an open foundation that can scale across thousands of stores and promote enhanced security from enterprise through the edge. The platform’s resilience can help ensure continuous business operations, facilitate AI at the edge, and provide the flexibility for integrating point solutions and disparate data sources. 

The Cognitive Store enables retail transformation

The Cognitive Store is emerging as a target operating model that can enable retailers to thrive in a dynamic environment.

What’s next for AI in retail?

As with any transformational exercise, charting the course from the current to the desired state requires these questions to be answered: How do you get from here to there? What should already be in place? What needs urgent focus today? And how can you best prepare for your Cognitive Store of tomorrow?

We have developed a framework outlining key capabilities organizations need to develop across all 5 areas of digital transformation in retail.

We have developed a framework outlining some of the key capabilities retailers need to develop in each of the areas targeted for digital transformation:

• Done. These benchmarks are yesterday’s news. Leading retailers are well underway on these measures. If you’re not there, you’re behind.
• Now. Strive for these milestones today to keep pace with your competition—they’re engaging in active projects slated for completion in the near term.
• Next. To superscale your Cognitive Store over the next 3 years and beyond, start planning today.

Download the report below to learn how to digitally transform your retail stores, and how our “done-now-next” framework can help you assess your current state and formulate next steps.