Navigating the Future of Retail: The Rise of the Cognitive Store and the Imperative of Digital Transformation

Over the past two years, our lives have undergone a profound transformation, requiring the adoption of hybrid approaches in various aspects of our daily routines. From working and parenting to socialising and shopping, the concept of “hybrid” has become integral to our evolving lifestyles. Notably, the retail sector has witnessed the rise of “hybrid shopping,” a fusion of in-store digital and physical touchpoints that was born out of necessity but has now firmly established itself as a mainstream phenomenon.

The Landscape of Hybrid Shopping:

Recent data indicates that hybrid shopping has become the primary buying method for a substantial portion of consumers. A remarkable 27% of all consumers and 36% of Gen Zers now prefer this blended approach. Moreover, a staggering 72% of consumers across all age groups depend on stores as part of their primary buying method. This shift presents both a challenge and an opportunity for retailers: how can they seamlessly integrate online, in-store, mobile, and virtual channels into a cohesive customer journey?

The Cognitive Store: A Glimpse into the Future:

Addressing this challenge head-on is the concept of the Cognitive Store—a digitally transformed, AI-driven physical location that redefines the retail experience. This visionary concept embodies five key areas of AI integration to create a shopping environment that is not only responsive to customer needs but also anticipates them:

  1. Personalised Shopping Experiences:
    • Leveraging hyper-localised and hyper-personal insights from both digital and physical interactions.
    • Real-time delivery of “Next Best Action” recommendations based on the context of the customer’s visit.
  2. Superpowered Associates:
    • Equipping store associates with AI assistants to facilitate meaningful contextual exchanges with consumers across various touchpoints.
  3. Intelligent Workflows:
    • Proactively optimising in-store business processes, including buy online/fulfil in-store, in-store purchase journeys, inventory management, on-shelf availability, replenishment, shipment intake, and local deliveries.
  4. Operations Centre:
    • Serving as a hub for proactively monitoring store operations and efficiently handling incidents, changes, and problems to ensure fast resolution.
  5. Store Operating Platform:
    • Powering an open foundation that scales across thousands of stores, enhances security, facilitates AI at the edge, and integrates point solutions and disparate data sources.

Enabling Retail Transformation:

The Cognitive Store emerges as a target operating model that empowers retailers to thrive in a dynamic and evolving environment. To guide organisations on this transformative journey, a framework has been developed outlining key capabilities across all five areas of digital transformation in retail.

The Road Ahead:

As we look to the future of AI in retail, it is essential for organisations to address critical questions and navigate the path from the current state to the desired Cognitive Store of tomorrow. The framework categorises benchmarks as “Done” (yesterday’s news), “Now” (milestones for today), and “Next” (strategies for superscaling over the next three years and beyond).


For retailers seeking to digitally transform their stores and embrace the Cognitive Store model, the report provides invaluable insights and a “done-now-next” framework. Download the report to embark on the journey of retail transformation and stay ahead in an ever-evolving landscape.


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