Age of smart retail in Africa is here

As AI systems become more localized, Africa’s retail sector is evolving from shelves and checkouts into smart, seamless personalized experiences, transforming how Africans shop and interact with brands. The sector is billed to have the potential for unlocking the highest economic value from gen AI in Africa.

SPECIAL REPORT | BIRD AGENCY | The age of smart retail is unfolding in Africa.

Albeit at a small scale, consumers have started interacting with intelligent systems that anticipate their needs, speak their languages and turn routine purchases into personalized journeys.

“Whether you’re shopping on Alibaba or local e-commerce platforms like Jumia or Jiji, you’re always interacting with AI before you’re connected to a vendor,” said Alfayo Nyakundi, a regular online shopper based in Nairobi, in an interview with bird.

Nyakundi said he enjoys online shopping because it helps him compare prices, discover where to find specific products, and spot major discounts and deals on a variety of brands that suit his budget.

“Just yesterday, a friend mentioned a 10-litre air fryer priced at Ksh 17,000, which I thought was expensive. I found cheaper alternatives online, some going for as low as Ksh 3,600,” he recalled, referencing recent product prompts that appeared on his smartphone.

Similar sentiments were echoed by Offie Otieno, a clothing and footwear retailer with a physical store in Nairobi’s Central Business District, who conducts most of his sales via WhatsApp.

He affirmed that more businesses are increasingly adopting artificial intelligence (AI) for customer management.

“Before a seller even gets the chance to respond, AI can step in and reply to customer inquiries. It’s already been trained on frequently asked questions, and it suggests responses that help customers find exactly what they need. AI is already here with us,” he explains.

Otieno acknowledges the transformative potential of AI in enhancing customer experience—especially in terms of response time—as more shoppers turn to online platforms.

“It’s fast, it gives direct answers, and it doesn’t waste time,” he adds.

As he plans to expand his business, Otieno is seriously considering incorporating AI tools to streamline customer service.

“I’m thinking of deploying AI in the future. Going through 50 customer questions a day about product details or prices is exhausting. AI could help make that process much easier and quicker,” said Otieno.

At the center of this transformation are African retailers who are accelerating the adoption of generative AI (gen AI) to enhance every facet of the shopping experience and countries racing to create a favourable environment for this to happen.

Several African countries are at different stages in adopting or developing national AI policies.

According to a new report by global Consultancy McKinsey and Company, the retail sector on the continent holds the highest potential for unlocking the biggest economic value from gen AI—estimated at between US$6.6 billion and US $10.4 billion.

Authors of the report titled, “Leading, not lagging: Africa’s gen AI opportunity,” say African retailers are deploying conversational AI bots that serve as digital shopping assistants—offering personalized recommendations, answering real-time questions, and enhancing customer service in multiple languages and dialects.

These bots, the authors affirmed are becoming the digital frontlines of modern African commerce.

“Prominent retailers with a well-established physical presence across the region have expanded into the online market and are reimagining the shopping experience with gen AI–powered conversational bots,” according to the McKinsey report.

While the report does not list these retailers, our spot check on some of Africa’s big retailers and e-commerce platforms point to these developments.

Jumia, Africa’s largest e-commerce platform, uses AI for personalized product recommendations, fraud detection, and automated customer service through chatbots.

South Africa’s largest online retailer, Takealot, employs the technology to enhance its warehousing, delivery logistics, and customer engagement leveraging tailored suggestions.

Shoprite and Massmart, two of South Africa’s major retail chains, have adopted AI tools for inventory management, pricing optimization, and customer data analysis.

In Kenya, Twiga Foods, which links smallholder farmers with urban vendors uses AI to forecast demand and optimize supply chains.

Smart-shopping assistants have significantly improved several key metrics of the online shopping experience, including time to check out and user effort, by more than 50 percent by reducing screens and clicks, and they have the potential to improve basket size and online adoption, according to The McKinsey report.

To further highlight the growth of the retail sector in the digital age, Nigeria-based, OmniRetail—an e-commerce startup that digitizes the supply chain for informal retailers using a retailer-first, asset-light model—was recently named Africa’s fastest-growing company for the second consecutive year in the 2025 Financial Times and Statista’s annual rankings.

“This recognition reinforces our commitment to transforming traditional trade and creating a lasting impact across the continent,” said OmniRetail on its LinkedIn handle.

OmniRetail’s annual revenues grew from US$ 0.28 million in 2020 to US$ 120 million in 2023, a period that the number of traditional retailers it has digitised rose from just 1,000 to over 140,000 across three countries-Nigeria, Ghana and Ivory coast.

The McKinsey report also points to significant opportunities in hyper-personalization where retailers leverage AI to deliver tailored marketing content, design individualized promotions, and craft localized campaigns that resonate deeply with diverse African audiences.

Gen AI use it reports also extend to store operations, layouts, and in-store experience; commercial support in making decisions about merchandising and suppliers.

While retail leads the charge, McKinsey’s findings show that six other sectors—banking, consumer packaged goods, telecommunications, insurance, mining and heavy industry, and the public sector—are also deploying gen AI to varying degrees.

It singles out, Kenya’s use of personalized educational curricula and South Africa’s AI tools for small business financial planning as early indicators of the continent’s wider AI readiness.

Now more than 40 percent of institutions in Africa have either started to experiment with gen AI or have already implemented significant solutions, according to McKinsey.

Overall, Gen AI has a huge potential to unlock up to U$103 billion in annual value if Africa embraces AI at scale.

But there are caveats, McKinsey cautions, current use cases only scratch the surface.

“These use cases represent just the tip of the value iceberg,” the report’s authors affirm, emphasizing that the vast untapped potential across Africa’s digital landscape.

Again, institutions have to overcome huge infrastructure gaps, data quality issues, the need to grow a pool of specialized AI talent and address ‘uncertain’ regulatory issues.

“Africa’s gen AI regulations are still evolving, with data protection, privacy, and cross-border transfer laws varying by country and no comprehensive regulations in place,” according to the authors.

Rwanda, Egypt, Mauritius, Tunisia, Ghana, and Morocco have already published national AI strategies, focusing on areas such as healthcare, education, agriculture, ethics, and digital transformation.

South Africa, Kenya, Nigeria, and Senegal are developing their AI policies, with strategic frameworks and stakeholder engagements already underway.

Other countries like Uganda, Namibia, Botswana, Ethiopia, and Zambia are in the early planning stages of formulating AI strategies.

At the continental level, the African Union adopted a Continental AI Strategy in July 2024, aiming to harmonize national efforts and promote ethical, inclusive AI development across the continent.

During the recent High-Level Policy Dialogue on the Development and Regulation of Artificial Intelligence in Africa, held in Addis Ababa, Ethiopia, as part of the Ethio Tech Expo (ETEX) 2025, leaders from 40 African countries underscored AI as a strategic investment priority.

The gathering emphasized the need for collaborative strategies to accelerate AI adoption across the continent.

“We made a deliberate choice not to remain passive consumers of imported innovation, but to become active contributors—leveraging AI to address challenges grounded in our own realities,” said Ethiopian Prime Minister, Abiy Ahmed.

Echoing this sentiment, African Union Commission Deputy Chairperson Selma Malika Haddadi said the AU’s vision is harnessing AI for Africa’s Development and Prosperity.

“Our focus is on making AI accessible for socio-economic development, fostering homegrown and domestic AI capacity, advancing a multisectoral and multistakeholder governance approach, and promoting innovative regulatory frameworks that support AI uptake while safeguarding African citizens,” said Haddadi in statement.

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SOURCE: bird story agency