Revolutionizing Retail:

The Shift from Checkout to Check-In

By Kayla Broussard, Chief Technology Officer of Retail and Travel, Kyndryl

Retailers can employ AI tools to collect analytics on inventory levels and sales patterns to “predict” what their shoppers will purchase, how much, and when. These insights help grocers and other retailers stock the right amount of perishable goods to meet timely demand while driving down costs and reducing environmentally damaging waste. Grocers can also rely on IoT devices to gauge whether perishable items are being stored in the optimal setting for the longest possible freshness.

AI tools are also playing an increasing role on the consumer side, allowing buyers to make more eco-conscious choices when it comes to product packaging. For example, many holiday shoppers this year chose to send gifts directly to the recipient in its original packaging. On a mass scale, this effort can make a sizable impact in cutting down on material resources.

The holiday “giving” season has come and gone, but many consumers are heading to the post office for what might be called “give back” season. Following the end-year shopping peak, retailers can struggle with managing the high volume of in-store returns, as well as those returns from online shoppers who practice bracketing or wardrobing – purchasing an item in several variations and only keeping the one that best fits their needs. The spike in bracketing has disrupted inventory and threatened profit margins for some retailers.

Some retailers are looking to AI-based tech to minimize these hurdles. AI technologies in stores transform shopping with smart mirrors, intelligent dressing rooms, and 3D body scans, which boost customer confidence and drive down returns. In e-commerce, AI can suggest sizes based on previous orders and feedback, while AR helps customers visualize large items like furniture and TVs within their home.

It may sound counterintuitive, but efficient returns start with reverse logistics. By collecting returns at a central location and routing them based on real-time information, retailers can optimize their returns and determine which items can be refurbished, recycled and “recommerced.” Recommerce is gaining traction as it allows companies to profit from returned goods that would otherwise go to waste, driving both cost savings and sustainability efforts.

While an estimated 20 percent of retail shopping happens online, seamless in-store payments will still be necessary to drive customer loyalty in 2025. Consumers expect speed and convenience across online and in-store payments, which now must include flexible payment options. The demand for buy now, pay later (BNPL) has surged in recent years and will continue its uptick.

An added benefit of outsourcing to payment service providers is retailers’ ability to pivot focus back to customer experience and loyalty. Invisible payments allow customers to enter a store, select items, and receive their bills on integrated apps without the need to interact with the point-of-sale system.

Retailers have been collecting and leveraging first-party data for years to derive insights on consumer behavior. And while this form of data collection isn’t going anywhere in 2025, zero-party data continues to gain traction as the most reliable and high-quality form of consumer data collection. Zero-party data is unique because the consumer is intentionally sharing data with the retailer, giving them information about their likes, dislikes, interests and purchase intentions in exchange for something of value, like personalized content and relevant offers. This data can be collected using methods from surveys to quizzes to in-store kiosks and is helping to usher in a new era of ultra-targeted marketing.