By Charles de Brabant, Executive Director, Bensadoun School of Retail Management, McGill University
Artificial intelligence is transforming retail. While that observation is hardly new, the growing adoption of generative and now agentic AI is accelerating change at an unprecedented pace and scale.
For retailers, especially SMEs, the speed of this transformation can feel both exciting and daunting. Yet amid all the discussion about technology, a more fundamental question is emerging: what will continue to make retailers relevant when AI becomes increasingly capable of performing tasks that once required human expertise?
Retailers should absolutely embrace AI to improve business performance. However, even the most successful implementation of AI may not be enough to guarantee long-term relevance. In my view, the retailers that thrive in the years ahead will be those that continue investing in something technology struggles to replicate: the human touch. Relationships, empathy, advice and trust will become increasingly important sources of competitive advantage.
The work of McGill Professor Henry Mintzberg offers a useful framework for understanding why this human dimension may become even more important in the age of AI.
What Mintzberg’s Framework Reveals
Over the course of my career, Mintzberg’s work has been instrumental in shaping my understanding of successful organizations and business models, particularly in industries driven by creativity, experience and customer engagement. His ideas helped explain why companies such as L’Oréal developed distinctive cultures and organizational models that contributed significantly to their long-term success. They also informed many of the courses I taught at China Europe International Business School, EM Lyon and McGill on what drives success in luxury, fashion, beauty and other creative industries.
In his influential 2005 book Managers, Not MBAs: A Hard Look at the Soft Practice of Managing and Management Development, Mintzberg argues that successful management exists at the intersection of three dimensions:
Managerial science: analytical thinking, quantitative decision-making and data-driven management. This is the “dollar” dimension.
Art: creativity, vision, innovation and strategic imagination. This is the “magic” dimension.
Craft: experience, intuition, engagement and human understanding. This is the “human-heart” dimension.
For many years, advances in technology have steadily expanded their influence over the managerial science dimension. Machine learning, predictive analytics and large language models excel when vast quantities of data are available. This helps explain, in part, the success of highly data-driven retail organizations such as Amazon and Alibaba.
Today, generative AI is moving increasingly into the artistic dimension as well. It is becoming a powerful tool for ideation, content creation, product design, marketing and even store design. The pace of progress has been remarkable.
The third dimension, however, remains fundamentally different.
While AI will continue making inroads into customer-facing functions and repetitive tasks, it faces far greater challenges when it comes to replicating human judgment, empathy, trust and lived experience.
Trust May Become Retail’s Most Valuable Asset
Recent events have highlighted why the human dimension remains so important, and why AI’s growing influence within Mintzberg’s “art” dimension presents both opportunities and risks.
Generative AI is becoming increasingly capable of producing compelling stories, persuasive marketing content and emotionally resonant brand narratives. While these capabilities can help legitimate businesses connect with consumers, they can also be misused.
A notable example involved Juliette & Lea Montreal, a supposedly local mother-daughter business that promoted an emotional story about a closing-down sale that would allow the daughter to pursue her dream of studying fashion in Europe.
The story resonated with consumers. It was also entirely fabricated.
Customers who placed orders later discovered they were purchasing products shipped directly from overseas suppliers, often with disappointing results. The incident illustrates how AI-powered storytelling and digital marketing can be used to manufacture credibility and emotional connection where neither actually exists.
Retail strategist and McGill University lecturer Carl Boutet recently warned that increasingly sophisticated scams may make it harder for consumers to distinguish legitimate businesses from fabricated ones.
“It’s getting scary out there. And it makes it tougher for legitimate businesses. I feel for the legitimate brands that are starting out, which you wouldn’t know either because they are literally getting off the ground and you might be more doubtful.”
As AI-generated content becomes increasingly convincing, consumers may become more skeptical of what they see online. That reality creates new challenges for legitimate businesses attempting to establish credibility and trust.
In such an environment, authentic human relationships, real expertise and genuine customer engagement may become even more valuable competitive advantages.
Why Physical Stores Still Matter
This growing trust gap reinforces the continued importance of physical retail.
Many occupations that appear least vulnerable to AI disruption share common characteristics. Nurses, electricians, hairstylists, fitness trainers and countless other professionals create value through expertise, judgment, empathy and personal relationships.
Technology can support these professions, but it cannot fully replace the human connection at their core.
Retail operates under similar principles.
Despite years of e-commerce growth, approximately 80 per cent of global retail sales continue to be completed in physical stores, with the percentage remaining even higher in North America. Store teams therefore continue to play a critical role in helping customers make informed decisions, building confidence in purchases and creating lasting relationships.
While AI and automation will continue transforming retail operations, they are unlikely to diminish the importance of physical stores where trust, expertise and personal relationships remain central to the customer experience.
Retailers That Invest in People Win
Some of the world’s most successful retailers demonstrate that lasting differentiation often comes from people rather than technology.
Apple has intentionally designed its stores as places where customers can learn, ask questions and solve problems. Employees act as trusted advisors who help demystify technology and build confidence. The store experience is built around expertise, reassurance and human interaction.
Costco takes a different approach but achieves a similar outcome. The company invests heavily in employee training and compensation, creating a culture that reinforces trust and loyalty among members. Customers return not only because of value, but because they know what to expect from the experience.
Nespresso has elevated everyday purchasing into a premium retail experience. Boutique advisors guide customers through products, preferences and rituals, transforming routine transactions into meaningful interactions.
In each case, the store serves as a human expression of expertise, empathy and trust.
The value of those interactions remains particularly evident in specialty retail. Carlos Oyanguren, President of Nespresso Canada, believes physical stores continue to play a unique role even as digital channels become increasingly sophisticated.
“An omnichannel strategy is essential. Our online platform and app must be outstanding. However, the human interaction in a boutique remains irreplaceable. E-commerce can deliver convenience, while great advisors in our boutiques deliver trust, reassurance and a sense of recognition that no screen can fully replicate.”
Canadian research supports the same conclusion.
Léger’s WOW In-Store studies consistently show that retailers with highly engaged and knowledgeable store teams continue to outperform many competitors in customer experience rankings. Retailers such as Costco, Lee Valley Tools, Long & McQuade, Lindt, Nespresso, Familiprix, Imaginaire, SAQ, Avril and Yves Rocher consistently perform well because customers feel welcomed, advised and recognized by knowledgeable staff.
According to Stéphane Drouin, Executive Vice President of Shopper Insights at Léger, retailers that excel are often those that continue investing in the quality of human interactions.
“As AI and omnichannel continue to reshape retail, the role of the store, and especially in-store teams, is not diminishing; it is evolving and gaining value. Our WOW studies clearly show that top-performing retailers are not just those investing in technology, but those prioritizing the quality of human interactions.”
In a retail environment increasingly shaped by automation and digital tools, these findings serve as an important reminder. Technology can enhance efficiency and convenience, but customer trust, service quality and emotional connection remain powerful drivers of long-term success.
A Message for the Next Generation
The implications extend beyond retailers themselves and may also shape the future of retail careers.
Many white-collar occupations are already experiencing significant disruption from automation and artificial intelligence. By contrast, retail roles grounded in judgment, communication, empathy and relationship-building remain among the most resilient.
Store operations provide a unique opportunity to understand customers, brands, products and business fundamentals firsthand. They also help develop skills that technology cannot easily replicate.
For young professionals entering the workforce, this reality deserves greater attention. Retail careers are sometimes overlooked in favour of more traditional corporate pathways. Yet in many respects, retail offers an exceptional environment for developing leadership skills, commercial awareness and customer understanding.
Far from being a fallback option, retail can offer some of the most meaningful and future-relevant career opportunities available today.
Working in stores provides a front-row seat to how businesses create value, how customers make decisions and how brands build loyalty. These lessons remain highly relevant regardless of where a career ultimately leads.
The Human Advantage
Artificial intelligence will continue transforming retail. Retailers should embrace the opportunities it creates and use technology to improve efficiency, decision-making and customer experiences.
Those who fail to adapt risk falling behind competitors that are moving faster and operating more efficiently.
However, as AI becomes increasingly powerful and accessible, technology alone may no longer be enough to create lasting differentiation.
The retailers that continue investing in trust, expertise, empathy and meaningful human relationships will be best positioned to thrive in the years ahead.
As the Financial Times editorial board argued in a 2025 commentary on artificial intelligence and the future of work, the defining advantage in an AI-saturated economy may lie less in our ability to code and more in our capacity to care.
For retailers navigating rapid technological change, investing in AI will be essential. Investing in people may prove even more important.
As technology becomes increasingly accessible, trust, expertise, empathy and meaningful human relationships may emerge as some of retail’s most valuable competitive advantages.
In the age of AI, the human touch may become retail’s most valuable asset.
