AI-powered retail: Elevating customer experience and operational efficiency 

We’re on a mission to help our customers become retail ready with AI built for the future of retail. Generative AI is rapidly transforming the retail industry by revolutionizing operations, enhancing customer experiences and optimizing supply chains. By integrating AI, retailers are setting new standards for efficiency and innovation, elevating the consumer experience. 

Microsoft agents—whether built on Microsoft Copilot Studio or Azure AI Foundry—provide a conversational AI interface for accessing and managing both data and workflows in retail, enhancing employee productivity and customer experience. Retailers and partners can customize these agents to integrate with business applications, data sources, and workflows, re-imagining interactions between store associates and consumers. By running processes autonomously, they offer significant benefits: better consumer experiences, quicker ramp-up, higher productivity, and empowered frontline workers. These agents provide a comprehensive view of the business, helping retailers make informed decisions, increase customer conversion rates, and improve operational efficiency. 

At NRF this year, Microsoft and its partners are showcasing agents and solutions designed to help retailers unlock the full potential of their data. These include the latest advancements in AI and generative AI, enabling retailers to transform their operations and drive growth. Microsoft Cloud for Retail helps retailers deliver personalized customer experiences, optimize operations, and empower their workforce, demonstrating how Microsoft retail products are truly better together.  

Available agents and solutions include:  

• Personalized Shopping Agent, a conversational commerce experience to improve the shopping experience with a context-aware assistant to help consumers find the perfect products for their needs.
• Store Operations Agent, a conversational interface, puts safe, company-governed generative AI in the hands of store associates so they can spend less time searching for answers to store policies and procedures and more time helping customers. 
• Retail data solutions in Microsoft Fabric, giving retailers the power to unify and enrich a wide range of retail data sources, enabling real-time, actionable insights.

Microsoft retail products are designed to work seamlessly together, creating a unified ecosystem that enhances every aspect of retail operations. Read Shelley Bransten’s blog to see how customers are experiencing the benefits of these solutions and staying ahead in the competitive retail landscape.

Enhancing in-store and online consumer experiences with Personalized Shopping Agent  

The Personalized Shopping Agent enables retailers to offer consumers an enhanced shopping experience. Using conversational design and seamless integration with retail ecosystems powered by generative AI, it provides a truly personalized and efficient shopping experience.  

When used online, in a retailer’s website, or consumer app, the agent allows consumers to shop through an AI-powered, chat-based product discovery experience. The conversational interface allows consumers to describe their product search in term of requirements instead of product specifications—for example, ‘I am a family of five and typically run the washing machine twice a week‘. Through clarifying questions generated by generative AI, the agent will classify the consumer’s intent such as brand inquiry, gifting, advanced product search, or product recommendations, and specify the item search more precisely. This experience can be customized to reflect the merchant’s tone of voice, responsible AI practices, or other company specific guidance. Finally, the agent uses AI semantic search to match items with the consumer’s requirements.

The Personalized Shopping Agent can provide great assistance to in-store employees as well. Combining the agent with Microsoft Dynamics 365 Commerce, in-store employees can provide differentiated levels of personalized experience to customers, driving customer satisfaction and brand affinity. The Personalized Shopping Agent engages seamlessly to search for appropriate product options without breaking the employee’s flow of conversation with the customer, providing several relevant prompts to narrow down product suggestions, and offers up selling opportunities. 

Microsoft partner Avanade has built voice recognition control over the Personalized Shopping Agent, providing store associates with a seamless interactive experience where they can seek product recommendations, suggestions, and discover products using voice-based natural language conversation while assisting customers. By using the power of AI, retailers can reimagine the consumer journey and how they discover products and content online. The agent scales the in-store experience too, by transforming the consumers search and providing recommendations combined with brand storytelling, ultimately leading to higher brand loyalty and increased sales. 

Empowering frontline workers with Store Operations Agent  

The Store Operations Agent is designed to enhance the productivity of retail frontline workers and in-store customer experience. A single, conversational interface helps the store associate to execute a variety of tasks and provide service to customers without having to flip between dozens of apps. In the conversational interface, the store associate is able to quickly find store procedures and protocols in documents, create and update incidents, create tasks, and make product, order, and inventory inquiries.

One standout capability of the Store Operations Agent is its ability to integrate with retail data sources and business applications, including Dynamics 365, to access order and inventory information and ServiceNow service requests. Microsoft Copilot Studio provides more than 1,000 connectors as part of the platform. The agent also empowers the store associate to get answers to their questions from the retailer’s knowledge base, search across select internet portals, and connect to other plugins.

The Store Operations Agent is a headless service and can integrate with existing in-store apps. One of the channels that Microsoft Copilot Studio provides is Microsoft Teams. This provides a natural language user interface that allows store associates to access information and perform tasks without toggling between multiple applications.

Microsoft partners Accenture Avanade have developed the Clienteling Copilot Accelerator, which uses the Store Operations Agent to enhance the efficiency of retail frontline workers. This AI-augmented solution helps high-end retailers and brands allow seamless data visibility across the value chain and simplify workflows for in-store teams. By integrating with the Store Operations Agent, the Clienteling Copilot Accelerator provides store associates and client advisors with real-time access to product information, order details, and customer interactions, and seamlessly manage store tasks. 

We’re excited about our Personalized Shopping and Clienteling Copilot Accelerators because they help retailers use context to help meet customers where they are. These solutions foster more relevant interactions through personalized shopping experiences and empowered store associates. By converting vast amounts of data to create seamless customer experiences, we see improved conversion rates, larger basket sizes, and higher transaction values. Our partnership with Microsoft and their AI retail technologies enables us to deliver this value to retailers quickly and effectively.”

Ruth Harrison, Global Retail and Consumer Goods Managing Director, Avanade

Increase efficiencies with Retail data solutions in Fabric 

Retailers understand the importance of using their data to optimize inventory, segment customers, forecast sales, implement dynamic pricing, retain customers, and detect fraud. However, they often face significant challenges, such as managing vast volumes of data, dealing with siloed applications, achieving real-time responsiveness, and making decisions without data, which can lead to lower customer satisfaction, poor business management, and higher costs. 

Retail data solutions in Fabric, now generally available, helps retailers to unify, enrich, and model data for faster insights. By applying the power and flexibility of Fabric, retailers can address their unique challenges and seize new opportunities. Retail data solutions come with retail data model, a variety of connectors (e.g. Sitecore OrderCloud), AI models (e.g. frequently bought together), application templates (Personalized Shopping Agent), and business intelligence capabilities (e.g. sales cockpit) that are easy to configure and use. With Retail data solutions, retailers can improve their bottom line by driving operational efficiencies, standardizing and harmonizing their data estate, and storing their data in an industry data model template.  

Fabric Real-Time Intelligence allows retailers to analyze streaming data for instant insights and actions. This capability is crucial for retailers who need to respond quickly to customer needs and market changes. With Fabric Real-Time Intelligence, retailers can dynamically transform streaming data and query it in real-time to gain immediate insights. For example, they can monitor inventory levels, track customer behavior, and adjust pricing strategies on the fly. This real-time data processing helps retailers make informed decisions quickly, improving operational efficiency and customer satisfaction. 

Sitecore, a Microsoft partner, created the Sitecore OrderCloud connector, which integrates with Fabric to align data with the Microsoft Retail industry data model. This connector consolidates retail data into a unified hub, enabling Microsoft Power BI reports on sales, products, and customer data, providing actionable insights for informed decision-making. 

By harnessing the power of data, Retail data solutions in Fabric empowers retailers to make strategic decisions, improve operational efficiency, and deliver exceptional customer value in a dynamic and competitive environment. 

Join us and our partners at our NRF booth

Microsoft partners play a crucial role in this AI-powered evolution. Working closely with Microsoft, industry leaders such as XTEL are unlocking new levels of productivity and innovation. These partnerships bring together AI and cloud technologies, enabling retailers to create seamless, data-driven experiences for their customers.  

XTEL, a global leader in commercial enterprise systems, has launched MAX AI, an innovative AI-powered platform designed to transform productivity and the design of commercial strategies. MAX AI introduces a custom copilot that extends M365 Copilot, seamlessly integrating with Azure OpenAI and Fabric, and is accessible through Microsoft Teams.  

“MAX AI is setting a new standard for productivity, empowerment, and effectiveness. The synergy of XTEL’s artificial intelligence and data science with Microsoft Azure AI is like equipping each employee with a dedicated team of expert analysts responding instantly.”

Cédric Guyot, Chief Strategy Officer, XTEL 

Join us at the Microsoft booth (#4503) at NRF to experience this transformative AI-native, agentic enterprise planning solution firsthand and see what it can do for your business.  We look forward to seeing you at the event.   

Learn more about agents

• Learn more about Personalized Shopping agent.
• Learn more about Store Operations agent.
• Get started with Fabric.
• Learn more about Retail data solutions.
• Learn more about Dynamics 365 Commerce.

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Source: Microsoft Industry Blog