By Andrea Leigh
AI is reshaping how shoppers engage with retail — especially in the health and beauty sector. From defining the new shopper path to purchase to predictive personalization, artificial intelligence is altering the shopper journey, expectations and, ultimately, where media budgets go.
But while the tech is exciting, the stakes are pretty high. Applied poorly, AI can alienate shoppers instead of serving them. The goal is to use AI strategically to enhance the shopper journey and build trust.
AI’s current impact: the answer engine economy
Shoppers are increasingly turning to AI-driven tools like ChatGPT and Gemini instead of traditional search or retailer sites. A recent Gartner forecast predicts a 25% drop in search engine volume in 2026 as AI-generated answers become a preferred discovery path. And eMarketer found that nearly half of Gen Z and over a third of Millennials prefer discovering brands through social and conversational platforms.
Amazon’s launch of Rufus, its AI shopping assistant, and the testing of an AI-native search engine (codename: Cosmo), show how serious they are about owning this AI-powered discovery journey. But most retailers don’t have Amazon’s resources. Because of this, their best move is AI-readable product content feeds. Think rich Q&A, accurate specifications, use-case imagery, ingredient clarity and social proof through reviews — like 20 times more content than what you can see on the product detail pages. Because the more answer-ready your product listings are, the more likely they are to surface in AI queries — whether through Amazon, Google or a third-party engine.
Expect a big shift in retail media budgets to follow. Media budgets follow traffic. If discovery starts elsewhere, the value of retailer search ads may decline.
Retail media networks need to adapt: Think “sponsored answers” or licensing high-quality content to third-party AI tools. Brands should also expect media measurement to evolve, moving from click-path analysis to attribution models designed for multi-modal, AI-assisted journeys.
In-store: enhancing the human, not replacing it
For health and beauty retailers, AI in-store isn’t about replacing humans … it’s about using tech to empower staff and streamline operations. AI-driven forecasting and inventory management can reduce stockouts on key health SKUs or seasonal beauty products. AI can also improve dynamic pricing, promotion targeting and loyalty customization.
But physical retailers are slow to evolve. For example, self-checkout remains clunky; yet there is visual AI available that can recognize items without barcodes, improving speed and reducing loss.
But traditional drug and grocery retailers operate on tight margins. The trick is to prioritize AI investments that drive cost savings or materially reduce shopper friction. Overhauling self-checkout, automating planogram checks or adding AI to loyalty engines can all offer measurable returns.
Underestimated trend: AI and personalization in wellness
In fashion, digitized closets and social styling tools are catching fire. In wellness and beauty, we’re seeing a similar trend: AI-driven personalization of routines.
Devices like the Oura Ring and apps like Skin360 use AI to offer personalized wellness insights. These tools don’t just track sleep or skin tone — they recommend behavior or product changes. Consumers now expect skin care to match their specific concerns, or supplements to match their diet, stress level or biometrics.
Retailers can meet this need by partnering with personalized wellness brands, offering AI-assisted quizzes in stores or enabling shoppers to scan products and receive real-time, personalized recommendations.
As AI learns our habits, needs and biology, shoppers won’t just ask, “What’s popular?” They’ll ask, “What’s right for me?”
Scaling AI responsibly
We’ve all seen failed tech investments in retail — like digital fridge “cooler screens” that blocked product visibility. Retailers chased monetization and alienated the shopper. AI could follow the same path if it is not applied thoughtfully.
Here’s how to scale responsibly:
• Start with shopper needs. Use AI to solve real pain points. Don’t deploy flashy tools that feel like surveillance or cost-cutting. Shoppers can smell cost-cutting initiatives and monetization strategies a mile away …
• Test and learn. Set up pilot programs with clear KPIs. Scale what works, divest from what doesn’t. Don’t go “all-in” until you’re sure it will be accretive to the shopper experience (and you’ve gotten feedback as such).
• Leverage your brand partners. Brands often bring the strategic insight, category context and content muscle. This collaboration between brands and retailers — from PDP engagement to AI search trends — can create a fuller, faster picture of what today’s shopper actually wants.
• Prioritize transparency and trust. If shoppers are interacting with AI (e.g., chatbots), tell them. Don’t pretend something’s human that’s not. Also, respect data privacy. Ensure recommendations are ethical and evidence based.
AI in retail is inevitable. The winners will be those who use it to make shopping easier, more personalized and more human. In the health and beauty sector, where trust and nuance matter deeply, AI has to work in service of the shopper. Not as a shortcut, but as a tool that makes people feel seen, understood and delighted.
AI can build trust with our shoppers and bring them closer, if used thoughtfully and wisely.
Andrea Leigh is founder and chief executive officer of the Allume Group.
