In recent years, Artificial Intelligence (AI) has emerged as a transformative force across industries, with the retail sector witnessing particularly significant disruption. As consumer expectations evolve and digital transformation accelerates, AI technologies offer unprecedented opportunities for modern retail management in areas such as inventory control, customer engagement, pricing optimization, and demand forecasting. This research paper explores the strategic applications of AI in the retail ecosystem and evaluates its contribution to improving efficiency, personalization, and profitability. The study is based on secondary data sources including academic publications, industry reports, case studies, and global benchmarks. Key themes examined include AI-enabled customer experience tools like chatbots and recommendation engines, supply chain automation through predictive analytics, AI-driven pricing strategies, and computer vision in visual merchandising. The paper also addresses challenges such as data privacy concerns, algorithmic bias, workforce displacement, and the digital divide among small retailers. Through case examples of leading global and Indian retailers such as Amazon, Walmart, Sephora, Reliance Retail, and Flipkart, the study illustrates the practical implications and impact of AI adoption. The paper concludes with policy and strategic recommendations to facilitate inclusive and ethical AI integration in retail. Ultimately, the research emphasizes the critical role of AI in redefining competitive advantage and customer value in the contemporary retail landscape.