Artificial Intelligence (AI) is the single most talked-about topic in technology right now. From transforming the way we live and work to concerns about what happens when the machines outsmart us, the conversations taking place around AI are certainly wide-ranging.

But in the world of business, most of the sentiment around AI is positive. It’s widely recognised as a route to achieving next-level advances in efficiency, productivity, and business intelligence. In the retail and CPG sectors, it has been claimed that Generative AI (think ChatGPT, Copilot, Gemini etc) will deliver a 1.2-2% productivity increase worth $400-660 billion in value creation.

That will grab anyone’s attention. But the downside with AI is just how fast-paced things are moving. ChatGPT, the progenitor of Generative AI, hasn’t even been around for three years yet. Now all the talk is about ‘agentic’ AI and super-intelligent automated decision making.

It sure is hard to keep up when you have a business to run. How exactly can AI help you as a retailer? How do you get on board with it? How does AI work with your POS and other existing systems? What do you need to be wary of?

To help you get a head start on answering these and other questions, here are five things we believe every retailer should know about AI, told from our perspective of how it’s interacting with point of sale tech.

1. AI-Powered Personalization Is Now Possible at Checkout

Personalization has long been something of a holy grail to retailers. The more you can treat customers as individuals and deliver experiences tailored to their personal needs and expectations, the better the chance you have of locking in high levels of satisfaction and loyalty. But you need two things to personalize effectively. Data about your customers. And a powerful enough means of analyzing and decoding that data so you can act on it in real time.

That’s where AI comes in. Your POS system is a great source of customer data – purchase history and patterns, loyalty status, even browsing behavior when combined with modern sensor and video tracking systems. AI can process and make sense of all this information fast enough to do things like suggest personalized promotions and product recommendations right at the checkout. This creates a more engaging customer experience and drives incremental sales.

2. Smarter Inventory and Merchandising Starts with POS Data

There are lots of ways AI can put all that lovely data that flows through your POS systems to good use. Another is to level up your inventory and merchandising. By detecting purchasing patterns in real-time, AI can recommend optimal product assortments, flag underperforming items, and support smarter vendor negotiations. Retailers no longer need to wait for weekly reports to decide what products are hot or not, what promotions to run or what to display where. Decisions can be made on the fly, grounded in live data. This leads to leaner inventories, fewer markdowns, and higher margins.

3. POS Systems Are the Heart of Omnichannel Retail

Today’s shoppers bounce between channels – researching online (which in itself can involve three or four different channels at a time), buying in-store, or vice versa. AI-enhanced POS systems are helping traditional brick-and-mortar retailers make better sense of these multi-faceted customer journeys and deliver seamless omnichannel experiences. AI tools can help automate services like “buy online, pick up in-store” (BOPIS), real-time inventory visibility, and unified customer profiles across channels. Once again, it all comes down to AI’s ability to ‘see’ data in lots of different places at once, and make sense of it in real time. By connecting the dots between physical and digital journeys in this way, POS systems can become powerful tools for customer loyalty and satisfaction.

4. Trust and Transparency Matter More Than Ever

As AI systems go down the ‘agentic’ route and make more autonomous decisions like suggesting discounts or declining returns, retailers should rightly be concerned about accountability. AI outputs must be explainable and transparent, not just fast. Without proper grounding in real business data, AI can make mistakes that damage customer trust and brand reputation. Especially when using AI for purposes such as pricing and policy enforcement, retailers need systems that prioritize accountability.

5. AI Can Help Mitigate Labor Challenges

Finally, staffing remains one of retail’s biggest headaches. AI-enabled POS systems help fill the gap by streamlining tasks: automating inventory lookups, managing loyalty rewards, and even guiding new employees with in-system prompts. These smart tools allow staff to focus on delivering service, not managing systems. It’s not about replacing employees. It’s about empowering people to work more effectively with better tools.

To conclude, AI is already transforming the retail landscape. Retailers who embrace AI-powered POS systems are not just keeping up; they’re gaining a competitive edge through smarter operations, enhanced customer experiences, and greater agility.

For retailers yet to kick off their own journey with AI, there’s no need to panic. Start small, choose AI tools that align with your data, and build trust into your systems from day one. The POS is no longer just the endpoint of a transaction – it’s the starting point of intelligent retail.