AI in Retail: Two Recent Success Stories and a Cautionary Misstep

Artificial intelligence continues to reshape the retail sector, helping brands better manage inventory, personalize experiences, and streamline operations. But while AI adoption often delivers results, not every implementation goes as planned. Here's a snapshot of two recent success stories—and one cautionary tale.

Success: Old Navy’s RADAR System Gets Customers What They Want, Faster

In the U.S., Old Navy is deploying a system called RADAR, which blends RFID, AI, and computer vision to locate items in real time across all 1,200 of its stores. This AI-enhanced inventory tracking helps staff locate and restock products faster, while also enabling smoother fulfillment of online and curbside orders.

The result is fewer “out of stock” moments for customers—and fewer missed sales for the brand. According to The U.S. Sun, Old Navy’s parent company, Gap Inc., sees this as a scalable solution that could roll out to other retail brands in its portfolio.

Success: TOPTEN Boosts Sales with AI-Powered Inventory Optimization

Israeli fashion brand TOPTEN is proving that even fast-moving apparel categories like accessories can be tamed with the right tech. By using Buffers.ai's algorithms to analyze real-time sales trends, the company now accurately predicts demand for high-turnover items, minimizing overstock while avoiding lost sales due to understocking.

The result? A noticeable uptick in conversions and fewer markdowns. As detailed in Just AI News, TOPTEN’s AI engine continuously adjusts product flow across its stores, allowing human merchandisers to focus on big-picture strategy instead of chasing anomalies.

Failure: Wendy’s AI Chatbot Leaves Drive-Thru Customers Frustrated

But not all retail AI launches go smoothly. Wendy’s recently introduced a conversational AI chatbot to take drive-thru orders, only to face immediate pushback from customers. Reports of misheard orders, awkward interruptions, and difficulty customizing items surfaced across social media and news outlets. One customer described the system as “It. Is. Horrible.”—echoing broader complaints that the bot failed to understand basic requests and posed usability issues for those with speech impairments. Still, the fast-food chain plans to expand the AI system to hundreds more locations, as noted in Southern Living’s report.

The Takeaway

AI’s promise in retail is real—but so are the risks. As TOPTEN and Old Navy demonstrate, well-targeted AI can drive revenue and improve experience. But when implementation outpaces user empathy, as with Wendy’s, brands risk turning innovation into irritation.