We are moving from traditional e-commerce to an “algorithmic customer journey,” where AI agents and chatbots increasingly guide discovery and purchasing. Global retail leaders are already transforming their organisations through AI and automation, but how prepared are Swedish retailers, and how should they adapt? We spoke with Josephine Darlington of AI Sweden, about why AI transformation is ongoing, the return of physical retail, and how to compete in an ultra-streamlined future.

We are moving increasingly towards an algorithmic customer journey where customers begin their search in AI chats rather than traditional search engines. How ready are Swedish retail companies for this new “customer channel”?
My feeling is that many retailers are quite tentative right now. They know something is happening, but many are still standing somewhat still, struggling with how to get started. To succeed, companies have to rethink their digital presence. AI chatbots require enriched and machine-readable product information to build context and understand what the customer is actually looking for. You have to stop hiding vital information, like return policies, in PDF files; everything must be available in plain text.

It sounds like a significant internal transition is required. We know most retailers are in legacy work processes. What are the biggest organisational pitfalls you see among retailers today?
The most common mistake is viewing AI as an IT issue or an isolated project. Enriching data and transitioning requires a cross-functional effort where e-commerce, marketing, product teams, and IT must collaborate. Another challenge is leadership understanding. It requires educating the entire organisation, from both the top and the bottom, and for management to provide the resources and mandate to drive the work forward. It is a massive transition. “This is the new electricity, so to speak. Not just the ’new internet’. It will completely transform everything. I don’t think many retail leaders have truly grasped the magnitude of the pending change yet.”

With all this digital automation, we know there is always an anti-trend, but is there a risk that the physical shop will lose its relevance?
Actually, quite the opposite! If we look at the US, which is often a step ahead, we see a backlash against all this frictionless automation. People are drawn to what is genuine and want physical spaces that aren’t just about efficiency, but where they can browse, touch, and feel products. On the other hand, AI plays a huge role in the physical shop by empowering staff. With so-called “quick-tech” on a tablet or phone, shop assistants can quickly understand both the customer’s history and stock levels, providing a significantly better and faster customer experience.

Finally, Swedish companies such as H&M and IKEA have been global role models through their efficiency and scalability. We know that brand building is a vital point of success. In a future where every company is hyperefficient and uses AI to be relevant and scalable, what will be the deciding factor for Swedish brands to stand out?
Firstly, you must be able to withstand scrutiny. AI makes it incredibly easy for consumers to pick apart company claims, especially regarding sustainability and ingredients or materials. Transparency and accountability therefore become more important than ever; otherwise, you risk a major backlash. Secondly, it’s the brand. The dream is for the consumer to actively ask their AI assistant for your specific brand when they need to buy a new jacket, for example. At that point, it’s no longer about AI, but about strong customer relationships, PR, and building a brand that people want.

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