The middle of retail is about to get very uncomfortable
I spent a day recently at a retail tech seminar. It was genuinely good — well organized, smart people, real examples of how AI is already reshaping the industry. The energy in the room moved between euphoria and careful scepticism, sometimes within the same presentation.
I sat there feeling slightly out of place. I’ve been out of retail for the past nine months, and that distance has been unexpectedly clarifying. When you’re inside an industry, you move with its rhythms. You read the same newsletters, attend the same events, absorb the same anxieties. Stepping outside of it for a while gives you something rare: the ability to watch it from a distance and notice things you couldn’t see up close.
What I noticed is that the industry is just beginning to get desperate. Not visibly-the presentations were polished, the case studies were impressive. But underneath it all was a question the room was circling without quite landing on.
Alex M H Smith, a strategy consultant and writer whose thinking I follow closely, has been writing about exactly this — that what is hard and rare remains valuable, and AI is rapidly commoditizing everything that used to feel like an edge. I think he’s right, and I’ve been seeing the same thing play out in retail specifically.
The floor is rising. And the question isn’t how to be good anymore. It’s how to be irreplaceable. Retail is about to learn this lesson the hard way.
The seminar was full of predictions. We have a long history of being spectacularly wrong about how technology reshapes society, paired with an impressive ability to sound completely certain while doing it. So I won’t add to the pile.
But I will share one observation.
Most of the conversation at the seminar was about efficiency. AI reducing costs. AI streamlining logistics. AI optimizing pricing. And fine — I believe all of that. AI is genuinely good at making existing operations leaner and faster. But there was a nagging question I kept turning over in my mind that nobody seemed to be asking directly:
Where is the value going to come from?
Efficiency is not value. Efficiency is the absence of waste. Those are very different things. And in a world where every retailer has access to the same AI tools, the same optimization playbooks, the same data-driven personalization engines — efficiency just becomes the cost of being in the game. It stops being an advantage the moment everyone has it.
There were mentions of using AI for better customer experience and personalization. I’ll be honest: I roll my eyes at this. Not because personalization isn’t real, but because I’ve seen this movie before. It’s the same mistake startups make constantly — falling so in love with their own technology and solution that they forget the only thing that actually matters: providing something of genuine value to a real person, in a way they can’t find anywhere else.
AI-driven personalization, at scale, applied uniformly across an industry, is not differentiation. When everyone does it, it stops meaning anything
There were also examples from China — people shopping in a frenzy, led by AI influencers, dopamine loops engineered to perfection. I’ll be straightforward: that stuff makes me sick to my stomach. It might be impressive as a technological achievement. As a vision for what retail should become, it’s a dead end.
Here’s the thing I keep coming back to, and it’s rooted in something very simple about human nature.
Humans value two kinds of things. Things that are rare — that produce the feeling of “wow, that’s something I’ve never seen before.” And things that are traditional — that carry history and familiarity, that produce that warm, fuzzy sense of belonging to something larger than a transaction. What falls into each category is always contextual, always shifting. But the underlying need is constant.
What’s also constant is the dynamic around rarity. People flock to something rare, and then they move on once it isn’t rare anymore. If the rare thing has genuine quality, it gets absorbed slowly into the culture, becomes trusted, becomes what we call brand value. That’s how lasting brands used to be built. Slowly. Through repeated proof of worth.
I’m not sure that process works the same way in a world of infinite acceleration and AI-generated everything. But rarity doesn’t stick the way it used to. The cycle is just too fast now.
My honest worry is overconsumption — a world of frictionless purchasing with nothing meaningful on the other end of it. But if I try to be genuinely optimistic, I can see another possibility: this could be the moment of mass extinction for all the middle-of-the-road brands and products that never really stood for anything in the first place. The ones that survived on convenience, on being good enough, on occupying shelf space and search results. AI levels that playing field overnight. If you don’t stand for something rare or something deeply rooted, why would anyone choose you?
Only a handful of brands will create lasting value at the top — genuine rarity, renewed frequently enough to stay relevant. Everyone else is going to feel the floor rising beneath them.
If I’m being honest about my own instincts — and I said I wouldn’t make predictions, but I’ll predict my own behavior — I find myself drawn in the opposite direction from the AI-optimized shopping experience. More offline. More human interaction. More things that feel like they were made by a person who gave a damn.
I don’t think I’m alone in that.
The industry is asking “what can we do with AI?” That’s the wrong question.
The right question is the one it’s been avoiding:
What do people actually value, and are we still providing it?