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‘Managing expectations while showing the value of AI-driven design will become important in client relationships’

By N Jayalakshmi | November 26, 2024

Cynthia Hirsch Ortiz, International President - Retail Design Institute, New York, MBH Architects, shares with Retail4Growth, her thoughts on the role of AI in retail experience and store design.

At the moment do you see AI as something that is integral to the work that retail designers do? How do you see it being used by them? 

From my perspective, AI has absolutely become integral to modern retail design, and I'm quite excited about its potential for transforming our industry. 

One of the most impactful ways we're seeing AI revolutionize retail design is through the speed and efficiency it brings to our design iterations. Where we used to spend weeks developing and refining a single concept, we can now explore multiple design variations in a fraction of the time. This allows us to be more experimental and innovative in our approach. 

What I find particularly compelling is how AI is helping us create more intuitive store designs. By analyzing customer behavior patterns – everything from how long people spend in different areas to how they interact with products – we can make data-backed decisions rather than relying solely on traditional design principles or gut instinct. For example, understanding dwell times and movement patterns helps us optimize layout configurations for better customer flow and engagement. 

The depth of customer insights we can now access is remarkable. AI helps us understand payment trends, product interactions, and customer preferences in ways that weren't possible before. What excites me most about this is how it enables us to be more precise in our design decisions. Rather than making broad assumptions about customer behavior, we can base our choices on actual data patterns.  

I believe the real game-changer is how AI transforms all this data into actionable insights. As retail designers, we can now make informed decisions about everything from fixture placement to lighting design based on concrete evidence of what works best for customer experience and business performance. 

That said, I see AI as a powerful tool that enhances rather than replaces creative human judgment. It's about combining the analytical power of AI with our design expertise to create retail spaces that are both beautiful and highly functional. 

How much of the AI usage is being driven by retail clients? 

I'd say there's a significant push coming from the retail clients themselves, particularly the larger brands and retailers who are already investing heavily in data analytics and digital transformation. 

What’s particularly interesting is how this client-driven demand varies across different retail sectors. Luxury retailers, for instance, might be more focused on using AI to create personalized shopping experiences, while high-volume retailers are often more interested in optimizing traffic flow and operational efficiency.

Smaller retailers are starting to take notice too. As they see the successes of larger competitors and as AI tools become more accessible and cost-effective, they're beginning to explore how they can incorporate these technologies into their own spaces. It's creating a 'trickle-down effect' in terms of adoption. 

At the front-end store experience level, what are some of the best cases of AI that you see?  

Some of the most compelling use cases are emerging in three core areas that directly impact the customer experience. 

First, space optimization, which I believe is one of the most powerful applications we're seeing. What's fascinating is how AI can now analyze customer traffic patterns in real-time and help us understand exactly how people are moving through and utilizing the space. For instance, AI analysis can reveal unexpected bottlenecks in what was thought to be a well-designed flow pattern. This kind of insight allows us to make data-driven adjustments to layout and space allocation that we might never have identified through traditional observation methods. 

The second area that I find particularly exciting is the optimization of store atmospherics. AI is revolutionizing how we approach environmental design elements like lighting, music, and even temperature control. The technology can now help us understand how these atmospheric elements influence customer behavior and purchasing decisions.  

The third key application is product placement and adjacency optimization. AI's ability to analyze purchasing patterns and product interactions is transforming how we approach merchandising strategies. For example, we can now understand not just which products sell well together, but also how their physical proximity affects customer engagement and purchase decisions. This allows us to create more intuitive and effective product arrangements that naturally align with customer shopping patterns. 

However, I always emphasize to clients that the key to success is integrating these technological capabilities while maintaining the human elements that make retail spaces engaging and emotionally resonant.  

How do you see AI applications in front end retail making a difference to the brand's business objectives?  

What's really compelling about AI's impact on front-end retail is how it directly ties to business objectives and ROI. We're seeing several transformative effects that are making a tangible difference to retailers' bottom lines. 

First, AI is revolutionizing how we approach personalization and customer engagement. I've seen cases where AI-optimized store layouts and product placements have led to significant increases in dwell time and, consequently, higher average transaction values. This kind of direct impact on sales performance is something that really catches the attention of C-suite executives. 

Also, through smart space optimization and traffic flow analysis, we're seeing reduced congestion during peak hours, more efficient staffing allocations, and better inventory placement. These improvements not only reduce operational costs but also contribute to higher customer satisfaction scores – it's a win-win situation that directly supports business objectives. 

Another aspect is how AI is helping brands stay competitive in an increasingly challenging retail landscape. By providing deep insights into customer preferences and behaviors, it enables brands to be more agile and responsive to changing market conditions.  

Perhaps most importantly, I'm seeing how AI is helping brands build stronger customer loyalty. When a store environment is intuitively designed around actual customer behavior patterns, when the atmospherics are optimized for comfort and engagement, and when products are placed in ways that make shopping more convenient – customers notice. They may not consciously recognize that AI is behind these improvements, but they experience the benefits through more satisfying shopping experiences, which ultimately drives repeat visits and brand advocacy. 

How do you see the role of AI evolving in the near future as far as store design and experience is concerned?  

We are just scratching the surface of AI's potential in retail design. We're currently in the early adoption phase of this technology. We're going to see significant evolution in how designers utilize AI tools.As more proof-of-concept projects demonstrate tangible results, I expect we'll see a dramatic shift in how widely AI is adopted across our industry.  

AI tools will become increasingly sophisticated while simultaneously becoming more accessible to designers. Right now, many designers might view AI as something complex or specialized, but I anticipate it becoming as fundamental to our toolkit as CAD software is today. 

One thing I'm particularly optimistic about is the network effect we'll see as more designers adopt these tools. Each successful implementation provides valuable insights that can be applied to future projects, creating a virtuous cycle of innovation and improvement. As we gather more data and see more real-world applications, the value proposition for AI in retail design will only become stronger. 

Do you think the use of AI will change the retail design industry in more ways than we can anticipate? Any challenges that this entails for the industry?   

From an industry evolution perspective, I see AI reshaping how we approach the entire design process. We're already moving from what has traditionally been a largely intuition-based creative process to one that's increasingly data-driven and validated. This shift is requiring design firms to develop new capabilities and expertise. For instance, we're seeing the emergence of hybrid roles that combine traditional design skills with data analysis capabilities – something that wasn't even on our radar a few years ago. 

However, this brings me to one of the major challenges facing our industry: the skills gap. Many experienced retail designers who are brilliant at their craft are now finding themselves needing to adapt to and understand AI tools and data-driven decision making. I believe this presents a significant challenge for both design firms and individual professionals in terms of training and development. It's not just about learning new tools; it's about developing a new mindset that combines creative intuition with analytical thinking. 

Cost is also a significant consideration. Implementing AI tools and building the necessary infrastructure requires substantial investment, which can be challenging for smaller design firms. This could potentially create a divide in the industry between larger firms that can afford to fully embrace AI capabilities and smaller firms that might struggle to keep pace. 

There's sometimes a tendency to view AI as a magic solution, and we need to be clear about what it can and cannot do. Managing these expectations while demonstrating the real value of AI-enhanced design will become an increasingly important part of client relationships. 

Any message to the industry in terms of how retail design consultants and the whole ecosystem including suppliers and retail solutions providers can integrate their work with a tech-led store experience as a whole?  

One thing I always emphasize is that AI will not – and should not – replace the need for skilled, creative retail designers. At the end of the day, this technology is simply a tool, albeit an incredibly powerful one, that enhances and amplifies our human capabilities. The core design expertise, the intuitive understanding of how people interact with physical spaces, the ability to craft emotionally resonant experiences – those innately human qualities are still vitally important, perhaps now more than ever. 

But make no mistake, successfully integrating AI into the retail design process requires a fundamental shift in mindset and skillset. We must be willing to embrace a more analytical, data-driven approach, while also maintaining that crucial creative spark.  

There is also an undeniable need for much tighter integration across the entire retail design ecosystem as we navigate this shift towards more tech-driven store experiences.The traditional siloed approach simply doesn't work anymore. Retail designers, suppliers, solutions providers, and the brands themselves – we all need to be operating from a shared understanding and a coordinated strategy when it comes to leveraging technology to enhance the customer journey. 

At the same time, I believe industry bodies and technology providers have a critical role to play in developing common frameworks, APIs, and platforms that make this integration seamless and scalable. 

While we may be at the dawn of this AI-driven transformation, I firmly believe the best is yet to come. It's an exciting time to be in this industry, and I can't wait to see what the next chapter holds. 

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