Generative AI is reshaping visual merchandising in retail, introducing innovative solutions that enhance customer experiences and drive business performance. Key strategies such as virtual try-ons and store layout optimization empower retailers to create interactive, data-driven shopping environments.
Google’s AI Mode (May 2025) integrates commodity‑based chat search, AI try‑ons via user photos, and agentic checkout—its agent automates purchases that meet predefined user criteria.
Virtual Try-Ons: Personalized and Engaging Shopping
Virtual try-ons use advanced AI algorithms to simulate how products like clothing, furniture, or cosmetics will look or function in real-world scenarios, bridging the gap between online and offline shopping.
In June 2025, Google launched Doppl, a standalone app that enables animated virtual try‑ons using full‑body photos or screenshots, including short AI‑generated videos to simulate garment movement. Google’s Doppl app deployment was widely covered on launch day, with Lifewire noting its capability to generate realistic videos from full‑body user images.
Applications Across Sectors
- Fashion: Virtual fitting rooms let customers visualize outfits before purchase, reducing size-related returns.
- Home Goods: AR overlays allow users to digitally place furniture or decor items in their living spaces.
- Beauty: AI-powered applications simulate makeup looks, helping users pick the perfect shades or products.
Tools and Innovations
- Perfect Corp (YouCam Makeup): Provides detailed AR try-ons for cosmetics and skincare.
- ModiFace (L’Oréal): Offers real-time AI-powered facial mapping for personalized beauty experiences.
- CatV2TON (Jan 2025) adds video‑capable diffusion‑transformer models to virtual try‑on, enabling pose‑consistent avatar animations for more dynamic user experiences.
- Recent research, including HF‑VTON (May 2025), introduces high‑fidelity virtual try‑on with consistent geometric alignment and detailed texture preservation.
- IKEA Place App: Allows customers to see how furniture fits in their homes using AR technology.
Benefits
- enhance product visibility, streamline customer flow, and boostCustomer Confidence: Helps buyers make informed choices, reducing uncertainty and hesitation.
- Decreased Returns: Mitigates post-purchase dissatisfaction, particularly in the apparel and furniture sectors.
- Engagement: Creates immersive experiences that encourage longer shopping sessions.
Store Layout Optimization: Designing for Impact
AI-driven layout optimization analyzes customer behavior and generates configurations to improve product visibility, customer flow, and sales.
Applications
- Traffic Flow Analysis: AI identifies high-traffic zones and optimizes layouts to guide customers through key areas.
- Dynamic Displays: Algorithms recommend product placements to maximize visibility and impulse buys.
- In‑store AR mirrors like Vyu Try‑On debuted in 2025, allowing shoppers to interact with virtual overlays in physical fitting spaces
- Real-Time Adjustments: Store layouts adapt dynamically to times of day, seasonal demand, or promotional events.
Tools and Innovations
- RetailNext: Tracks customer movement and heatmaps to suggest optimal layouts.
- NVIDIA Omniverse: Allows retailers to test virtual store layouts using digital twins.
- Symphony RetailAI: Combines layout suggestions with inventory data for seamless merchandising.
Benefits
- Optimized Space Usage: Ensures efficient use of store real estate.
- Higher Sales: Positions high-margin products strategically for maximum exposure.
- Customer Experience: Reduces congestion and creates smoother navigation.
Virtual Storefronts: Bridging Physical and Digital Retail
Generative AI enables retailers to design virtual storefronts that replicate the in-store experience online, offering highly personalized and immersive shopping journeys.
Key Features
- Immersive 3D Stores: Customers navigate digital replicas of physical stores via AR/VR platforms.
- Tailored Content: AI curates virtual displays based on user preferences and browsing history.
- Dynamic Updates: Real-time adjustments to reflect inventory changes, promotions, or customer behavior.
Tools and Innovations
- Obsess Virtual Store: Creates interactive digital store environments.
- Shopify AR: Empowers businesses to integrate AR visuals into e-commerce platforms.
- Google Swirl Ads: Provides interactive 3D ads to captivate online shoppers.
Benefits
- Engagement: Keeps customers connected through interactive, branded experiences.
- Accessibility: Allows customers to explore products remotely, extending reach.
- Efficiency: Offering virtual alternatives reduces the need for frequent physical store updates.
Challenges and Solutions
Integration with Existing Systems
- Challenge: Ensuring AI tools work seamlessly with inventory, CRM, and POS systems.
- Solution: Use APIs and middleware solutions to create unified platforms.
Customer Privacy Concerns
- Challenge: Balancing data collection for personalization with privacy compliance.
- Solution: Adhere to regulations like GDPR, use anonymized data, and secure explicit consent.
Cost and Resource Constraints
- Challenge: High investment in AI tools and staff training can be prohibitive for smaller businesses.
- Solution: Start with scalable AI solutions and leverage partnerships for shared resources.
The Future of Visual Merchandising
Generative AI will continue to redefine visual merchandising, incorporating more sophisticated AR/VR experiences, predictive analytics, and personalization technologies. By embracing these innovations, retailers can create seamless and engaging environments that cater to evolving consumer expectations.
