Retail reimagined
Retail reimagined
This article was originally published by BDO USA.
Artificial Intelligence (AI)-powered digital mannequins can display different models and any number of clothing items with the click of a button. But what about holographic mannequins of the future? We may soon be able to see virtual versions of ourselves in store windows.
Retailers looking to future-proof their stores will embrace in-store digital mannequins. Digital mannequins can serve up customisable and dynamic content that enhances the customer experience (CX), while retailers gain opportunities to capture customer data like browsing habits and purchasing decisions due to their interactivity. Real-time data can also be leveraged with A/B testing to lead shoppers back to a retailer’s online channels to retain sales even if a customer does not make an in-store purchase. If an item is out of stock, for example, or not available in a particular size or colour in the store, the customer is still engaged with the brand via an omnichannel approach. By leading customers back to the online channel, the retailer encourages them to make a purchase from the app or website, even if they left the store empty-handed.
Early adopters can create a personalised and profitable in-store shopping experience. AI-powered technology, from holographic mannequins to other emerging tools, will shape the next generation of in-store CX, as our world becomes increasingly digital and interactive.
Australian consumers are raising the bar, expecting personalised, inclusive experiences in-store. Smart technologies like digital mannequins allow retailers to reflect the diversity of their customer base while capturing valuable behavioural data - it’s a win-win for engagement and insights.
Transforming stores, one AI solution at a time
Digital transformation isn’t new to retail. Many technologies have already entered brick-and-mortar spaces, with varying degrees of success. Retailers have experimented with contactless purchasing and “buy online, pick-up in store” (BOPIS) services for years, but these offerings, while practical, don’t necessarily make the environment dynamic. Retailers are constantly brainstorming new ways to encourage customers to linger in-store a little longer and secure a sale.
To do this, retailers need to reimagine the in-store experience with digital mannequins, AI-powered shopping carts, interactive displays, and other innovative technologies.
New technologies like digital mannequins can promote inclusivity and build customer connections by displaying lifelike, holographic images of models that look much more like everyday customers. By scanning QR codes, shoppers can use their mobile phones to select their models and see how clothes look on bodies that are familiar to them, according to Retail TouchPoints. This can help them build self-esteem, promote brand loyalty, and lead to customers spending longer in the store as they interact with and enjoy the technology. The diverse range of bodies available for digital mannequins - customisable for gender, size, ethnicity, and more will be especially attractive to retailers operating in a variety of geographic locations.
A retailer should leverage technologies inside the retail space to gather up-to-the-minute data about customer habits as they move about the store. Smart Carts, for example, harness AI to display suggested inventory and customer totals in real-time based on what’s placed in the cart. Customers can streamline their shopping by fine-tuning their digital shopping lists by price, availability, and more, and can easily connect to their rewards accounts, driving traffic back to the retailer’s online channels. Strengthening the omnichannel experience allows customers to seamlessly weave between in-store and online shopping, which is key to building brand loyalty and driving sales.
Creative use cases driving innovation
But the use cases for AI in retail don’t stop there. Many retailers are getting creative, and companies of all sizes can learn from other brands’ ideas or experiences. For instance, some supermarket chains in the US have rolled out AI-powered “smart salad bars.” These salad bars are self-monitoring, ensuring ingredients are fresh and replenished when necessary, and they have even automated certain hygiene protections. Machine learning that tracks customer habits at the salad bar provides retailers with insights into which produce is popular, which can then be customised by location.
Integrating AI into retail experiences is exciting. It can help retailers build customer loyalty, add a competitive edge, and drive sales through tailored, personalised experiences. But to reach this level of AI maturity, retailers will need to customise their unique physical spaces; there is no “one-size-fits-all” approach. The stores of the future may look nothing like the ones we know today.
Designing smarter store layouts with data
Rethinking stores layout requires investment, but there are scalable advantages to gathering valuable customer data as they interact with digital mannequins, smart carts, and AI-powered salad bars. If a customer already has their smartphone in hand when shopping in store, strategically placed interactive displays like digital mannequins can interface with consumers’ devices and collect useful data as customers shop, such as how long they spend in different areas, how often they visit, what catches their eye, and more.
Improving layout, displays, and flow in retail spaces based on user data presents a unique win-win opportunity for both retailers and customers. For instance, retailers can refine customer loyalty programs through tailored recommendations. Eventually, with enough source data, retailers will be able to update store layouts based on highly accurate consumer traffic metrics to improve consumers’ experience navigating them. Real-time inventory data and updates can help streamline restocking, increase the efficiency of supply chains, inform in-store promotions and marketing, and much more. Retailers can enable mobile push notifications based on geofencing technology so that customers receive new offers, discounts and more when they step into the store or when they are standing in a specific aisle.
Planning for AI integration
While the benefits of AI for retail are exciting, the significant space required to implement AI-powered interactive and digital displays in a new layout may also require retailers to rethink their real estate footprint. Retailers should consider the specific architecture required for these types of innovations.
For example, large interactive displays like digital mannequins or other forms of digital signage and advertising may require reinforced walls and floor mounts, along with enhanced electrical wiring and data conduits. Strong Wi-Fi connection and a large volume of reliable power are necessary before investing. Interactive displays require strategic placements with maximum visibility, but at the same time, retailers should ensure customer movement and accessibility are not negatively impacted, meaning ample space is often needed. Due to these and other important infrastructure requirements, digital displays may only be suitable for flagship stores with high volumes of foot traffic, due to the costs involved in securing appropriate real estate.
Pilot, learn, scale: A smarter rollout strategy
Retailers may want to roll out these and other new in-store technologies as pilot programs in flagship locations first. The data collected about consumer habits and movements from technology can then be scaled up or down as needed and applied to small stores or less popular locations. As retailers explore and test new in-store technology, they can determine what works and how these innovations impact their physical space, from installation requirements to electrical foundation to available square footage and placement. As they learn what works where, retailers can make more informed decisions on store layout, real estate strategy or real estate optimisation plans, overall.
Learning more about how customers interact with in-store tools and platforms will help retailers future-proof their organisations. But many will find reimagining their in-store experiences and creating an engaging layout requires assistance from a third-party provider.
The integration of smart technologies in Australian retail is not just a trend but a necessity. Retailers must leverage these innovations to stay competitive and meet evolving consumer expectations.
Australian perspective: What this means for local retailers
Australian retailers are increasingly adopting smart technologies to enhance the in-store experience from interactive displays and mobile integrations to AI-powered inventory systems. As consumer expectations shift toward personalisation and convenience, the opportunity to blend physical and digital retail has never been more relevant.
Retailers like Woolworths and JB Hi-Fi are investing in omnichannel strategies and data-driven customer engagement, while others are piloting smart fitting rooms and virtual try-on tools. These innovations aren’t just about novelty, they’re about creating inclusive, efficient and memorable shopping experiences that drive loyalty and conversion.
Whether you're a national chain or a boutique brand, now is the time to assess your digital maturity, pilot new tools, and build a roadmap for scalable innovation.
Shaping the future of in-store innovation
The future of retail is not just digital, it’s dynamic, immersive and deeply connected to customer expectations. As smart technologies redefine how shoppers engage with physical spaces, retailers have an opportunity to transform their stores into experience-driven environments that build loyalty and drive growth.
BDO’s retail team brings together expertise in digital transformation, customer analytics, and operational strategy to help you navigate this shift. Whether you are piloting in-store tech, rethinking your customer journey, or scaling innovation across your network, we can help you turn your vision into action.
