GLOBAL RETAIL INNOVATION STEPS INTO SMARTER PHASE DRIVEN BY AI AND AUTOMATION

Retail stores and supermarkets are now in the midst of an innovative transformation. Spaces that once used to be defined by stocked shelves and friendly sales associates are now experiencing the ripples of the accelerated digital transformation. Artificial intelligence (AI), automation and data-driven insights are paving the way for smart stores which, on one hand, offer shoppers personalised experiences, while on the other hand, help retailers better understand evolving customer behaviour.

Global trends show how food retailers are also piloting AI-first experiences that match personalisation and ease of eCommerce platforms. By integrating advanced features such as AI sensors, smart carts, autonomous checkout counters and real-time inventory engines, retailers are offering efficient, fast and hassle-free shopping. This shift also gives retailers the benefit of higher conversion and lower operating costs.

As technologies like AI continue to evolve, retailers are leveraging them to optimise pricing, predict consumer behaviour and enhance in-store experiences to create a dynamic retail environment internationally. Current trends indicate a shift towards AI-powered automation in supply chain management, augmented reality for enhanced shopping experiences, and AI-driven marketing strategies which will be discussed at Gulfood 2026, the largest global food show in depth.

Speaking of the United Arab Emirates (UAE), the Artificial Intelligence in Retail market report stated the nation is projected to grow from USD 16.82 million in 2023 to USD 157.86 million in 2032, with a compound annual growth rate (CAGR) of 28.21 per cent. The UAE’s grocery market is also expanding rapidly, projected to reach USD 38.6 million by 2025 at a compound annual growth rate (CAGR) of 5.7 per cent through 2029, with online sales accounting for 15 per cent of total sales. Likewise, Saudi Arabia’s online grocery sector was valued at USD 1.54 billion in 2024 and is expected to expand further, with a projected CAGR of 15.9 per cent through 2033.

Government initiatives to promote AI integration

The UAE government strives to capitalise on this positive market landscape by fostering a favourable environment for AI deployment and integration. Initiatives such as the UAE National Artificial Intelligence Strategy 2031 aims to boost government performance and create new markets with high economic value by 2031, thereby positioning the country as a global hub for AI innovations. In line with this, the UAE government is encouraging retail businesses to integrate AI technologies into their operations.

Similarly, the UAE continues to host major global and regional events that accelerate the transformation of the retail sector and showcase the future of tech-enabled commerce. For instance, Gulfood 2026, the world’s largest annual food show, which is being held in Dubai, from January 26 to January 30 will showcase a wide array of innovations happening in the food retail sector. By convening global F&B leaders and decision-makers, including CEOs, heads of state, trade officials, investors, academics, scientists, tech innovators and more under one roof, it will set the ideal stage to lead open discussions and exchange ideas on the possibilities of AI integration and digital transformation in food retail.

Predictive Analytics and Demand Forecasting with AI

The growing momentum of technological innovations is further highlighted by increased use of AI-powered predictive analytics in the country’s retail market. Businesses are now leveraging data to forecast customer demand and optimise inventory management. AI-algorithms that accurately predict purchasing patterns, help retailers retain optimal stock levels, reduce waste and reinforce supply chain efficiency. It also helps retailers design engaging promotional campaigns, refine customer engagement strategies and align their stocks with seasonal trends. This aspect of predictive analytics is beneficial in the UAE’s rapidly evolving retail market, where demand fluctuations can be unpredictable and competitive pressures are high.

The country’s growing focus on AI-powered retail innovations is already being translated into real-world examples. Fully automated stores, such as Carrefour’s Dubai pilot, have proven that AI-powered retail is more than just a concept. These stores demonstrate how automation can improve efficiency, though they can also pose several challenges related to error resolution and data privacy.

Looking ahead, retailers that continue to embrace innovation are projected to unlock new market possibilities. The integration of AI will help refine everything from product selections and store operations to marketing campaigns, helping business leaders make informed decisions. Meanwhile, from a shopper’s perspective, the combination of advanced edge computing and digital signage can offer a personalised shopping experience. The integration of AI will also improve visual search capabilities, helping consumers to find items on retail websites simply with a picture of the item.

As the region’s retail sector continues to leverage AI’s vast possibilities, the key to success of these efforts lies in balancing innovations with customer centricity. The insights shared at Al-Futtaim’s AI in Retail Roundtable ^[3] offer a clear roadmap for GCC retailers to harness AI responsibly and effectively. In order to localise the experience, brands must design AI solutions that respect the region’s cultural diversity while meeting the expectations of an evolving customer base. Another key point highlighted during the roundtable is humanising the digital experience to ensure that technology strengthens emotional connections rather than replacing them. Retailers should also focus on seamless personalisation across channels, linking online and offline journeys into one unified experience.

Above all, the key to guaranteeing the success of this transformation is transparency and trust. By seeking consent and clearly communicating how data boosts customers’ convenience, retailers can build loyalty that lasts well beyond the transaction.