5 Ways AI in Australian Retail is Creating Smarter Customer Experiences in 2025

The world of shopping in Australia is changing fast, and at the heart of it is Artificial Intelligence (AI). From how you pick your groceries to how you discover new fashion, AI is making retail smarter, faster, and more personal.

In 2025, Australian consumer adoption of AI in retail surged by 45% compared to last year. Nearly a third of shoppers now use AI tools for tasks like choosing outfits, planning meals, and even finding unique brands. At the same time, retailers are racing to keep up, with some leading the charge and others still catching up.

Let’s explore the five biggest ways AI is transforming Australian retail, along with the challenges and opportunities ahead.

1. Smarter Shopping Decisions with AI Assistants

Shopping is no longer just browsing aisles or scrolling online. AI-powered assistants are helping Australians decide what to buy in real time.

• 57% of shoppers say AI inspires their purchase decisions, whether it’s suggesting healthier meal plans or curating fashion looks.
• 32% of Australians now actively use AI for shopping tasks, making it part of their daily habits.

These tools don’t just recommend products, they learn your preferences over time. That means if you’re a fan of eco-friendly brands or local Australian labels, AI highlights those options first.

For retailers, this opens the door to more personalized marketing. Instead of sending the same promotion to everyone, AI offers to match what each customer actually wants.

2. Personalised Experiences Across Generations

One of the biggest surprises in 2025 has been how widely AI is introduced across age groups.

• 47% of Gen Z are already using AI shopping tools.
• Baby Boomers and Gen X are catching up fast, with a 65% year-on-year increase in AI adoption.

This shift shows that personalised AI experiences aren’t just for younger, tech-savvy shoppers. From voice-based assistants helping older Australians shop online to AI-powered size guides reducing returns for fashion buyers, the technology is reshaping experiences for everyone.

For retailers, this highlights the need for inclusive design. AI tools should work for every generation, not just digital natives.

3. Unified Commerce Made Seamless

Today’s shoppers expect a smooth journey across apps, social media, and in-store visits. But here’s the challenge:

• 41% of consumers want seamless shopping across touch points, yet only 46% of retailers currently deliver this.

AI is closing this gap. Retailers are using AI to:

• Track customer preferences across platforms.
• Suggest items online that complement in-store purchases.
• Power chatbots that continue the same conversation whether you’re on Instagram, a website, or in-store.

This shift towards unified commerce is what makes shopping truly seamless. When AI connects the dots, customers don’t see “channels”, they see one brand that knows them well.

4. AI for Loyalty and Faster Service

Speed and loyalty are two big drivers for Australian shoppers.

• 64% of consumers want AI to provide faster service.
• Many also want smarter loyalty rewards, not just discounts, but personalised perks.

Retailers are responding. AI is being used to predict what customers might buy next, automatically add loyalty points, and even offer surprise rewards that feel genuinely personal.

For example, if a frequent shopper buys skincare every two months, AI can anticipate the next purchase and send a timely reward or bundle offer.

This isn’t just about discounts, it’s about building stronger emotional connections with customers.

5. Retailers Catching Up with AI Investments

While consumers are using AI quickly, retailers are more cautious.

• Only 26% of Australian retailers plan to invest in AI for sales and marketing in 2025.
• Yet 77% admit AI agents are essential to compete, and 74% are increasing spending this year.

Among small businesses, the story is different: 70% already use AI tools, with another 13% planning to adopt soon.

This shows a divide, big retailers are moving carefully with large-scale strategies, while small businesses are more agile in experimenting with AI-driven tools for efficiency and engagement.

Still, with the Australian AI market projected to reach AUD 315 billion by 2028, adoption is inevitable. The winners will be retailers who adopt AI not as a side tool but as a core strategy for growth.

The Future of AI in Australian Retail

The pace of change is only accelerating:

• 25% of shoppers are already using AI to discover products.
• 56% of Australians say they’re willing to purchase directly through AI tools.
• About 10% of Australians only started using AI for shopping in the past year, showing how quickly adoption spreads.

As these trends grow, the divide between AI leaders and laggards in retail will widen. The AI in business for what it truly is, a way to deliver smarter, human-centred customer experiences.

Final Thoughts

AI in Australian retail isn’t just a trend, it’s a revolution shaping how people shop, decide, and stay loyal to brands.

From personalised shopping journeys to loyalty rewards that feel more human, AI is giving consumers exactly what they want: smarter, faster, and more connected experiences.

Retailers that adapt early will win not only more sales but also deeper trust from their customers. And in 2025, trust is just as valuable as convenience.

FAQs

What is AI doing for Australian retailers in 2025?

AI helps retailers personalize shopping, improve customer service with chatbots, automate inventory and pricing, and provide seamless online/offline experiences. This boosts sales and customer satisfaction.

How many Australian retailers are using AI?

About 70% of small retail businesses in Australia are already using AI tools, with more planning to adopt in the near future.

How are customers using AI in shopping?

Around 25% of Australian shoppers already use AI to discover products, and many want AI to help with faster service, smarter rewards, and buying high-demand items.

What benefits has AI brought to Australian retailers?

Retailers report increased revenue (up to 34%), higher online conversion rates (about 20%), and reduced call center times by 50% thanks to AI-powered self-service.

Is AI replacing retail staff in Australia?

Most retailers use AI to assist staff rather than replace them, focusing on improving customer engagement and operational efficiency while preserving the human touch.