Australian retailers have no shortage of AI to choose from. From age verification and intelligent loss prevention to self-checkout and customer service, AI is increasingly becoming part of everyday retail operations.

Most conversations about AI in retail are about capability. What the technology can do, how quickly it can be deployed, what it might replace. Those are reasonable questions. But they are not the ones holding retailers back.

The barrier is quieter, and it sits with the customer. When we brought together senior Australian retail leaders at a recent roundtable, the discussion kept returning to a single, uncomfortable point. The technology is ready. The trust is not.

A confidence gap retailers can’t ignore

The numbers put it plainly. Research from the Australian Retail Council, discussed at the roundtable, found that 87 per cent of Australians have concerns about privacy when it comes to AI, and only 5 per cent say they trust AI companies. For a sector that is steadily building AI into everyday operations, from checkout to loss prevention, that is not a statistic to file away. It is a live commercial risk. The challenge is that trust cannot be assumed simply because a technology works. Customers increasingly want to know how decisions are being made, how data is being used and whether their privacy is being protected.

It matters because retail AI is not hidden in a back office. It sits at the most visible, most personal moment of the visit: The point where a customer is scanning their own shopping, having an item checked, or being asked to verify their age. If people are uneasy about how their data is used, that unease surfaces exactly where the retailer can least afford friction.

Trust is built at the point of experience

The reassuring part is that trust is not an abstract problem. It is built, or broken, in the specific design choices retailers make. The most effective way to earn it is to show, through the way a system actually works, that the customer’s interests were considered first.

A good example is age verification. In grocery markets overseas, AI is now approving the majority of age-restricted transactions at self-checkout in seconds. The detail that matters, from a trust perspective, is that the better systems do this without storing the customer’s personal data. The customer gets a faster, less intrusive experience, and the retailer never becomes the custodian of sensitive information it did not need to hold. Privacy is designed in, rather than promised after the fact. The same principle applies to loss prevention. Some of the most effective AI-powered solutions don’t assume malicious intent. Instead, they help shoppers correct honest mistakes through prompts and nudges before staff intervention becomes necessary. The outcome is lower friction for customers, fewer escalations for store teams and a better overall experience.

That principle, solving the operational problem while quietly protecting the customer, is what turns a piece of technology into something people are willing to trust.

Transparency and guardrails are now table stakes

Beyond individual systems, the roundtable pointed to a broader need. As AI moves from experimentation into everyday retail operations, retailers and the industry as a whole will need clear operating principles: transparency about where AI is used, restraint about what data is collected, and consistency in how these tools are applied. There was real interest in the idea of a retail-specific code of practice for AI, something that would give the sector a shared standard and give customers a reason for confidence. Whether or not that emerges formally, retailers increasingly recognise that trust must be actively designed into the customer experience rather than assumed.

Trust is part of the connected store

Trust is also becoming an important part of the connected-store conversation we see across Australian retail. The most successful technology is not deployed in isolation. It works as part of a connected store, where checkout, AI, payments and loss prevention operate together rather than as separate systems.

Trust belongs in that picture too. When retailers operate multiple technologies across checkout, payments, loss prevention and customer engagement, consistency becomes critical. Customers should not have one experience at self-checkout and a completely different standard applied elsewhere in the store. A connected approach helps retailers apply privacy, transparency and operational standards consistently across the customer journey.

The retailers who will win

AI is not the destination. Better retail outcomes are, and those outcomes depend on people being willing to engage with the technology in the first place. The retailers who will get the most from AI are not necessarily the ones deploying the most of it. They are the ones who earn and keep the trust of their customers while they do it.

The technology is ready. The opportunity now is to deploy it in ways that reduce friction, improve customer experiences and demonstrate clear value while maintaining customer trust. Retailers that get this balance right will be the ones that realise the greatest returns from AI in the years ahead.

• Diebold Nixdorf’s research report, The Evolution of Self-Checkout in Australia, is available now. Download it to see what the research means for your business, or contact the Diebold Nixdorf Retail ANZ team.

• About the author: Kristie Longhurst is GM Retail ANZ at Diebold Nixdorf.