Retail stores play a pivotal role in the distribution network of manufacturing companies, serving as the final channel directly connecting customers with products. Customers constantly seek the right product, reasonable prices, convenient locations, and effective promotional offers (Philip Kotler, 2000). This paper examines Artificial Intelligence's impact on enhancing the in-store customer experience in retail. AI applications like computer vision, recommendation systems, chatbots, and voice search drive personalized shopping, boosting customer satisfaction and sales (Davenport et al., 2020). However, challenges in the Indian retail sector include data privacy, high costs, and a lack of skilled professionals. The study employs a literature review and secondary data analysis to evaluate AI's impact, using sources like academic papers, industry reports, and case studies. Findings suggest strategies such as investing in data security, leveraging cloud-based solutions, upskilling the workforce, starting with pilot projects, and adopting omnichannel approaches. The research underscores that while AI-driven personalization is transforming retail, overcoming these challenges is crucial for retailers to fully leverage AI's potential. By fostering innovation and collaboration, retailers can align with evolving consumer expectations and secure sustainable growth.