With all the buzz surrounding AI in retail, it’s hard to know where and how to properly invest in it. After all, every week feels like a roller coaster; one week AI is going to save the world, and the next we’re questioning if we’re trapped in an AI bubble. This noise isn’t going to stop in the short term. Despite all the media obsession and tech frenzy, AI is here to stay as a core tool to solve retail problems. The Retail AI Index reports on the trailblazers who are not only crushing their AI implementation but using it to push the retail industry forward in ways that make shopping easier and more delightful for customers.
Some of the report’s findings may come as a surprise, as several medium and smaller-sized businesses are among the Top 100. So, having deep pockets isn’t the only way to make the most of AI to improve everything—from revenue to customer experiences. What’s more interesting is how these top retail brands use AI in innovative ways.
AI in Context
AI can make operations more efficient. It can help consumers pinpoint products they’re hunting for. It drives revenue, provides exceptional customer service, and personalizes the shopping experience. It has been a retail tool for decades, even though its newer applications are making headlines. But which retailers have the expertise to leverage AI to really make meaningful change in the retail space?
Enter the 2024 Retail AI Index that shines a light on retailers doing AI well. This inaugural report identifies the top 100 retailers and brands that are investing in AI with a higher purpose: to delight customers and create an impact for their businesses and the world. The Index also has over a dozen case studies, facts about AI today, and details on how five advanced applications of AI are changing how people shop. These 100 companies are advancing retail through the power of AI, across multiple aspects of their business.
Retail Tech
So, who are these 100 trailblazers? The Index serves as a comprehensive analysis of its brands and retailers. It was produced and published by Lily AI and Radii Group.
Of course, heavyweights like Amazon and Walmart rank in the upper echelons of the Top 100 list, and this makes perfect sense. Both retailers have deep pockets to scale technology. Their cultures experiment and innovate, and they have forward-thinking leaders.
However, some of the report’s findings may come as a surprise, as several medium and smaller-sized businesses are among the Top 100. So, having deep pockets isn’t the only way to make the most of AI. In fact, the research shows no clear correlation between a retailer’s Index ranking and total revenue. What’s more interesting is how these top retail brands use AI in innovative ways.
Surprises on the Top 100
The Retail AI Index was established through a comprehensive analysis of publicly available data on companies’ investments in AI across fashion, home, and beauty categories. Its analysis confirms that, of course, an increased investment in AI is linked to enhanced operational efficiency and revenue acceleration.
Mid-sized retailers such as Stitch Fix and eBay both cracked the top five. This is largely due to their significant, forward-thinking approaches to integrating AI throughout their tech stacks. Both retailers are notable for their innovative applications that offer more personalized and data-powered shopping experiences, even though their revenues are under $10 billion, which is relatively small compared to global giants like Walmart and Amazon.
Even smaller retailers like Revolve, with an annual revenue of around $1 billion made the list, based on their truly unique and innovative AI-generated clothing collection and partnership with AI Fashion Week.
This all goes to show that, although only 25 percent of U.S. retail companies have deployed AI, strategic investments in the technology can drive results for retailers of all scopes and sizes.
Feeling Some FOMO?
Based on the Index, here are a few tips on how to up your tech practice if you want to earn a spot among the distinguished 100 retail AI trailblazers in 2025.
- Invest in AI with purpose.
Not that you wouldn’t … but in this era when so much of everything is AI-focused, it bears repeating: Don’t use an AI solution for the sake of simply using AI. (In fact, don’t do this with any technology!)
Ensure that the AI solution you implement solves a real problem and serves a real purpose. Perhaps you want to track trends to determine merchandise assortments. SHEIN is the expert at this, using AI to track microtrends as they rise and fall in popularity, then applying those data-backed findings to forecast demand.
Or perhaps you want to improve your customer experiences overall, both in your store and online. Fabletics’ Salesfloor app helps digital and in-store sales associates access expert sizing insights, style advice per an individual shopper’s interest, and knowledge on stock availability, improving the retail experience, no matter where a customer is shopping.
Don’t fall for a shiny new object! For your own benefit, make sure the AI solution you partner with provides measurable impact and isn’t getting caught up in the Hype Du Jour, whatever that may be in the summer of 2025.
- Measure everything.
Measurement is a critical part of implementing any new initiative, and this shouldn’t fall by the wayside when implementing an AI solution. The AI systems you invest in need to drive significant and quantifiable impact, and both the cost (time, budget, manpower) and results should be accounted for. Companies that excel at AI-powered personalization increase revenues by 40 percent, compared with companies that don’t leverage personalization.
- Invest in the right technology and talent.
Whether you’re planning to build an AI solution in-house, hire a consultant or agency, or purchase an AI solution, you need teams who know when and how to build, and where and when to buy. This is especially critical for consumer-facing applications and avoiding costly delays that may set your innovation agendas back months or years.
Hiring the right people ensures that any public demonstration of AI will be optimized for success. Wayfair (#5) has an expert internal team working on many of their AI-powered advancements. In fact, they have a dedicated tech blog that discusses these teams’ work.
- Celebrate your tests and your successes.
Give credit where it’s due and celebrate your AI tests and successes, as well as the champions who made it all happen! Share these stories with your workforce and tell them on social media, your website and careers page, on stage, in the press — wherever appropriate. Show your team, customers, potential investors, and future employees how you value innovation and the incredible talent that brings these ideas to life. L’Oreal (#43) won eight awards at the 2024 Consumer Electronics Show for their AI-powered innovations.
Capitalize on the AI Competitive Flywheel
As reflected in the Index, following these four steps triggers a competitive flywheel. Sharing your AI program pilots and achievements makes your company more visible and attractive to top talent who share a passion for innovation. This talent pool will then guide your business on how to most effectively invest in AI tech, partnerships, and applications.
Investing in the best retail AI tech applications then yields better results through higher sales and greater customer satisfaction, and financial success and growth further attract more top talent, as the flywheel turns and increases your visibility as an AI trailblazer.
If you’re feeling inspired and want to start your AI journey now, download your copy of the 2024 Retail AI Index for free to learn more about the Top 100 and explore over a dozen case studies.
Note: Lily.ai is a Robin Report Innovator
