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By: Gabby Fernandez

The Future is Now: Why the Modern Storefront Needs to be Omnichannel and AI-Powered

For all of the problems of the mid-century period in America, one of the ways in which it remains compelling is the sense of optimism society at large once seemed to have for the future, specifically the way in which technology would drive us into the future. 

Whether companies, scientists, futurists, or science fiction writers, many predicted the explosion of audio and visual technologies backed up by processing power to make everyday life more engaging, convenient, and easy.

What wasn’t so readily predicted, however, was that this technology would miniaturize to the extent it has. In other words, the microchip was truly a revelation, and today, it is everywhere—whether it’s home appliances, smartphones, sensors, or IoT devices. 

The Store of Tomorrow is an Omnichannel, Hyperpersonalized Digital Experience

Yet, while most people’s homes today don’t resemble The Jetsons, storefronts increasingly do and if they want to keep up with the growing e-Commerce competition of Today, they have to

That isn’t to say that your storefront will have hovering robots anytime soon; rather, the stores of tomorrow are increasingly going to feature technology that is smart, that knows the customer, that can predict and service their needs so quickly and efficiently that ‘traditional shopping’ becomes a memory.  

That’s the plan and retailers who want to survive need to hop aboard. In that sense, we are not discussing the stores of the future, but the competitive stores of today. It’s a cliché, but the ‘future is now.’

Notes Paula Panarra, Global Business Applications Sales Lead for Retail and Consumer Goods at Microsoft in a talk with RETHINK Retail, “What we see is definitely that retailers are investing in creating more engaging and interactive experiences in the store…using technology to enable some of those experiences [with] virtual reality, augmented reality, [and varying] automations…[being able to gather] real-time information is key.”

In other words, if your brick-and-mortar operations don’t already have a plan to achieve the sophisticated monitoring, personalization, and frictionless service today’s customers increasingly demand, then you’re already behind.

That doesn’t mean you can’t catch up, of course, but the retail industry today is one of innovation and adaptation perhaps unlike any other time in its modern history, and it’s all moving at an aggressive clip thanks to the ongoing impacts of the lockdown period.

The story has, by now, become well-known in the industry: thanks to the restrictions on movement during the pandemic, the use of e-Commerce has both deepened and widened. 

Demographics already using the internet for purchases only did so more enthusiastically, while others who hadn’t yet adopted e-Commerce found themselves in a position where they were forced to learn. 


As a consequence, e-Commerce grew tremendously during this period, growing by 55% in 2022 to 1.7 trillion in sales. That was ‘bad news’ for traditional storefronts. 

Meanwhile, ongoing supply chain disruptions, a labor supply crisis for the entire service and retail industries, increasingly severe climatological events, geopolitical conflict, consumer health anxieties, deepening stress for existing employees, and ongoing, severe inflation rounded off what has been the most challenging time for businesses since the 2008 economic downturn.

Reflects Chris Alagna, Advisory Principal at KPMG, “It’s a very complex time for retailers as they are looking to spend money and also reduce costs in various areas of their business.”

The Next Generation of Retail Commerce is Already Here

What exactly are these ‘modern, competitive storefronts’ that can hope to address all of that going forward? In short, they’re stores that merge the omnichannel engagement and hyper-personalization of modern e-Commerce with the immediacy, intimacy, and experiential potential of brick-and-mortar retail. 

They’re stores that support omnichannel customer journeys with total digital integration into a multiplicity of transactional modes, supply chain analytics, and varying other forms of digital support (such as AI and machine learning). 

In practice, that looks like digital kiosks, digital shelving, IoT device integration, sensor readouts for real-time data on in-store customer activities, and greater implementations of automated system improvements to make the store experience frictionless

Panarra, when asked what she envisioned stores five years from now to look and function like, had this to say: 

“I believe we’ll see a mix of two experiences…the future will be [a combination of] what the shopper and the retailer both really want…the best-personalized experience [for the customer] and an efficient operation [for the retailer],” further detailing that storefronts will continue to become more and more interactive and experiential.

Increasing automation will also be an ongoing feature, to the extent that it’s difficult to imagine some of the functions that can be automated in the near future…especially thanks to the explosive introduction of ChatGPT, which for product searching and customer assistance alone is set to be revolutionary.

All of that will be powered by a sea of data so vast that the problem will never be whether you have enough of it, but whether you have too much (and where to find what you need). 

“[KPMG] is working with a large retailer implementing store devices [so] they can create personalized shopping experiences…that’s all being driven by data,” notes Alagna, “It’s being driven by their multichannel shopping patterns, it’s being driven by the demographics of the neighborhood, it’s being driven by [the major trends] going on right now,” continuing to note that whatever that data is, it has to be accessible quickly. 

Empowering the Employee Experience to Empower Loyalty

Agrees Panarra, “It has been about how to use data to really create that seamless personalized experience.” Investing into these types of tech innovations, after all, looks like more than having a technician come out; she continues to note that it’s important to keep the employee perspective as well, however:

“How do you empower your employees as a retailer to really turn that [level of personalization you want] into a reality across any category?

What that empowerment looks like varies depending on your store’s needs. For some, it’s a way to take a load off by helping to manage endless to-do lists that only ever seem to stack up. For others, it’s leveraging tech to filter customer inquiries before they make it to live agents.

From here, the ever-widening topic of ChatGPT, the revolutionary technology by OpenAI that cracked open the possibilities of AI for the world in dramatic fashion late last year is brought to the forefront.

ChatGPT’s potential to improve the customer experience–particularly as it continues to be developed–is so significant that it’s hard to imagine using the lens we have today.

Notes Alagna, “There are some phenomenal numbers on how [AI can support call centers] where regenerative AI and GPT can basically solve a customer’s problem without getting to a physical call center. We’re talking an increase [in that kind of filtering] by 60%, 70%.”

Although, ChatGPT is already evolving rapidly and businesses are lining up to utilize it: “Now you pretty much just have to point a chatbot to a data source and the AI engine kind of figures it out…that’s really the opportunity that we’re seeing, people that want to take advantage of it right now.”

It’s those data collection capabilities that make ChatGPT a powerful search tool and indexer for sales data that can help to create more conversions.

Notes Panarra, “…you can have very quickly all the knowledge on the customer, but then also have all of that knowledge [quicky] available to you to make a better proposal, a faster proposal, a better answer to the customer with teams…ultimately to enrich the win rate and to be more successful in the way you are engaging with the customer.”

When asked whether they felt companies who hadn’t yet worked to implement ChatGPT were behind, Alagna answered plainly: “Absolutely. I think they are behind.”

While the end goal should be to maximize the customer experience, digital innovation is requires process refinement and automation on the backend as well. With AI analytics, you can improve supply chain resilience and at the same time improve its efficiency and monitoring, for example.

It’s about “putting [all of that] data into action on the operation front,” continues Panarra.

Of course, where you put those innovations depends, again, on the challenges your particular business is facing. In a way, that’s the store of the ‘store of tomorrow,’ of the modern stores set to meet modern expectations: while the technology is often new, business fundamentals are not.

You still need to know your goals. You still need to have a solid team. You still need to know your customer. And you still need to know (and beat) your competition.

But lacking digital innovation would be a misstep, and decision-makers must be certain that the culture they’re building at their company both accepts and is excited about process innovation, AI, and digital technologies more broadly if they want teams poised to handle the challenges of the 21st century going forward.

To learn more about how digital innovation is transforming the modern retail store, listen to the latest episode of the RETHINK Retail podcast featuring both Paula Panarra and Chris Alagna.