AI in retail: the opportunity for software development companies
According to a Gartner forecast, over 80% of enterprises will have used generative AI APIs or deployed AI-enabled applications in production by 2026. This is a sharp increase from less than 5% in 2023. Such explosive growth signals a massive opportunity for software development companies (SDCs) to build, scale and monetise AI-powered retail solutions.
In addition, a McKinsey report states that generative AI could unlock between $240 billion to $390 billion in value for retailers. When combined with non-generative AI and analytics, the total value created could reach into the trillions.
These reports suggest the retail industry is at a pivotal moment. Generative AI is no longer a future concept – it’s actively reshaping how retailers operate and compete. For software development companies, this shift isn’t just a trend to watch, it’s a transformation to build for.
From experimentation to execution
Retail-focused software development companies are no longer just exploring generative AI – they’re deploying it at scale. Microsoft partners are leading the charge, embedding AI into retail operations to deliver measurable outcomes.
Here are four standout examples:
- Blue Yonder is working with Microsoft to build next-generation supply chain solutions powered by generative AI. Their AI copilots help retailers create agile, resilient and sustainable supply chains, connecting data across ecosystems to identify issues and optimise performance in real time.
- Adobe is leveraging Microsoft Azure to deliver personalised customer experiences at scale. Through Adobe Experience Platform and Adobe Campaign, retailers can unify customer data and orchestrate AI-powered journeys across channels – turning insights into action with speed and precision.
- VusionGroup, a global leader in IoT and data solutions for physical commerce, is transforming bricks-and-mortar stores into intelligent, connected assets. By combining generative AI with Azure’s global infrastructure, they enable retailers to optimise store operations, reduce waste, and deliver seamless omnichannel experiences.
- Promo.com, supported by Microsoft partner 2bcloud, scaled its PromoAI product using Azure OpenAI Service. The platform empowers small businesses and agencies to generate branded marketing videos in minutes.
Ultimately, these examples reflect a broader industry shift in how SDCs are building for the future of retail. By co-innovating with Microsoft, partners are accelerating time to value, expanding their reach, and shaping the next wave of AI-powered retail transformation.
Implications for software development companies
For software development companies, the rise of generative AI in retail is more than a technical shift, it’s a strategic inflection point. To support this transformation, Microsoft’s perspective on AI in retail is grounded in four key transformation areas, each offering a blueprint for how SDCs can build differentiated value:
- Enriching employee experiences
AI can empower frontline and back-office retail employees with intelligent tools that reduce friction and boost productivity. SDCs can build copilots and task-specific agents that automate repetitive work, surface insights in real time and support decision-making, whether in stores, warehouses or HQ. - Reinventing customer engagement
Today’s consumers expect personalised, seamless experiences across channels. Generative AI enables hyper-personalised content, conversational commerce and adaptive interfaces. SDCs can help retailers deliver these experiences by embedding AI into customer relationship management (CRM), marketing and service platforms. - Reshaping business processes
From supply chain optimisation to fraud detection, AI is transforming core retail operations. SDCs can create modular, API-first solutions that integrate with legacy systems and modernise workflows, driving efficiency, agility and resilience. - Bending the curve on innovation
Generative AI lowers the barrier to experimentation and accelerates time to value. SDCs that embrace co-innovation, working closely with retailers to prototype, test and iterate, can unlock new business models and revenue streams. Leveraging Microsoft’s ecosystem for co-sell, scale and technical enablement can further amplify impact.
How Microsoft partnership supports growth
We view our relationship with software development companies not just as a platform and AI provider, but as a strategic growth partner. Working side-by-side with SDCs, we help them unlock new markets, co-innovate and scale their impact globally.
Whether you’re building a new AI-powered retail solution or modernising an existing platform, Microsoft offers more than just infrastructure. We offer partnership support that includes:
- Collaborating early to shape product direction and align with market needs.
- Co-selling together through our global commercial marketplace.
- Connecting you with customers through curated industry programmes and events.
- Investing in your success with go-to-market support, technical enablement and funding opportunities.
We’re seeing the most successful SDCs treat Microsoft not just as a cloud provider, but as a business development partner – one that helps them move faster, reach further and grow stronger.
Looking ahead
If you’re a software development company building for the retail industry, now is the time to act. By harnessing generative AI, those who move early will shape the future.
As a Partner Development Manager at Microsoft, I work directly with SDCs to help them scale faster, co-innovate with confidence and unlock new commercial opportunities. Whether you’re exploring your first AI-powered solution or looking to expand into new markets, let’s connect and explore how we can grow together in this era of AI-powered retail.
Join the Microsoft AI Cloud Partner Programme
You can start accelerating success today by joining the Microsoft AI Cloud Partner Programme. Meanwhile, we invite you to explore two key SDC resources via our links below – an e-book explaining how to build intelligent apps that elevate user experiences, and a webinar outlining our latest ISV Success resources and incentives.
Find out more
Download the e-book: Transform ISV Applications with Intelligent AI Personalisation
Watch the webinar: What is New in ISV Success – AI Benefits and More
Join the Microsoft AI Cloud Partner Programme
AI-powered retail: Elevating customer experience and operational efficiency
About the author
As a Partner Development Manager at Microsoft, James specialises in strategic engagement with software development companies in the retail and consumer goods sectors. He focuses on identifying and accelerating high-potential partners, particularly those innovating with AI and disruptive technologies. James plays a key role in enabling partner growth through co-innovation, go-to-market strategy and ecosystem alignment.
