Artificial intelligence is reshaping the retail industry and providing new opportunities to engage customers, streamline operations, and innovate products. However, for AI to truly take off in the industry, customers and businesses alike must trust that it can do its job securely. Currently, many of them don’t.
Why AI will drive the future of retail
The retail industry is at a crossroads, with AI already proving its transformative power. A striking 90% of retail and consumer packaged goods companies are using or evaluating AI, and an overwhelming 97% plan to increase their AI investments next year. The reason? AI enhances efficiency, reduces operational costs, and, crucially, creates personalized customer experiences at scale. Whether it's managing inventory, enhancing product recommendations, or automating customer interactions, AI is becoming an indispensable tool for staying competitive.
But as AI usage grows, so do concerns. Data privacy and security rank among the top worries regarding AI in the retail industry, with 60% and 49% of retailers citing them as concerns, respectively. If retailers can't assure their customers' data security, adopting AI could turn into a liability.
Key use cases of AI in retail today and tomorrow
Retailers are leveraging AI in several exciting ways today, with even greater potential on the horizon:
- Hyper-personalized shopping experiences: AI agents analyze vast amounts of customer data (browse history, purchase habits, demographics, and preferences) to provide highly personalized product recommendations, dynamic pricing, tailored promotions, and customized marketing content. This can foster customer loyalty and drive sales.
- Virtual try-on: Generative AI allows customers to visualize products, such as clothing or furniture, directly within their personal spaces, significantly reducing returns and improving customer confidence.
- Customer assistants: AI-powered virtual agents provide real-time, personalized customer service, improving customer experience and operational efficiency simultaneously.
- Data and analytics: Generative AI can help guide business users to key insights in consumer behaviors by enabling them to combine data from various sources through natural language queries and summarizing issues to action without needing the help of dedicated analysts.
Looking forward, AI promises innovations like automated trade promotions planning, advanced data analytics through natural language queries, and streamlined product design and prototyping.
Why AI agents need to be secure
AI agents represent a gateway for cyber threats because they deal with and can expose sensitive customer data. Retailers now face the challenge of balancing innovation and security and must ensure that AI agents are robustly protected from abuse, data leaks, and other vulnerabilities.
Despite the enormous potential benefits, customer trust in AI remains fragile. Currently, 44% of consumers state that they don’t trust AI agents with personal data. This lack of trust can critically hinder the adoption and success of AI-driven retail initiatives. If customers are unwilling to give sensitive information like payment information, personal information or preferences due to security concerns, the promise of AI may certainly hit a speed bump.
As AI agents become more autonomous and involved in more complex decision-making, the repercussions of compromised security magnify significantly. Organizations must apply comprehensive security frameworks to their non-human AI identities just as they would with human identities.
How Auth0 can help
Auth0 offers a robust solution to help secure AI agents by incorporating identity as a foundational element of AI security strategy. By providing more secure authentication, authorization, and identity management capabilities, Auth0 helps ensure that AI agents operate safely within defined boundaries, reducing risks associated with unauthorized access and misuse.
Key capabilities Auth0 provides include:
- Seamless and secure authentication: Auth0 helps verify user identities seamlessly, maintaining a frictionless customer experience while enabling more secure AI interactions.
- API security: Auth0 helps secure the APIs that AI agents use to interact with backend systems, preventing unauthorized data access and leaks.
- Dynamic authorization: Auth0 enables retailers to dynamically manage and update AI agent permissions, ensuring they have just enough access to perform their tasks without posing unnecessary risks.
- Asynchronous user confirmation: Retail-specific use cases that involve delayed decision-making or transaction processing benefit from Auth0’s more secure handling of asynchronous workflows, helping to ensure that agents authenticate accurately at the right moments.
Auth0's platform allows retailers to implement sophisticated security without sacrificing user convenience, making the promise of AI not just a theoretical advantage, but a securely deployable competitive edge.
Where we go from here
AI represents the future of retail, offering transformative potential that promises increased efficiency, enhanced customer experiences, and novel market opportunities. However, to fully realize these benefits, the industry must place greater emphasis on securing AI agents. Customer trust and the security of sensitive information are on the line.
With Auth0, retailers can confidently navigate the complexities of AI security, helping ensure their innovative investments yield maximum returns while maintaining the trust of their valued customers.
The future of retail is indeed AI-driven, but it must also be securely managed.
Ready to learn more? Download the Auth0 Customer Identity Trends Report 2025, and talk to a member of our team to explore how Auth0 can transform your retail identity strategy today.