AI and Its Impact on Local Businesses

Artificial intelligence isn't just for the tech giants anymore; it's turning into a cornerstone for the local businesses right here on Long Island. From streamlining operations to changing customer experiences, AI is beginning to reshape how small businesses work. But as bright as these technologies may be, they don't come without their problems. Now, let's dive into the latest data, trends, and market insights on how AI influences our local economy and what that may mean for the future of small businesses on the Island.

Streamlining Operations and Boosting Efficiency

AI helps organizations to reduce costs and saves time that no one could think of a decade ago.

Local restaurants have begun investing in AI-powered inventory systems that can predict demand, thus reducing food waste by up to **25%** annually. On their part, retail shops use smart POS systems for real-time inventories and sales tracking. AI payroll and scheduling systems have also gained popularity-of late, businesses can therefore optimize labor costs by evaluating peak customer-traffic times. A 2025 study done by the Small Business Association found companies that applied AI to their business model averaged **20% of overhead costs reduced**. But here's the real kicker: most small businesses are very hesitant to adopt, as the setup costs range anywhere from **$10,000 to $50,000**, creating a divide between tech-savvy businesses and those clinging to older methods.

Enhancing Customer Experiences

Customer experience today is no longer about a smile and good service; it's all about personalization. Artificial-intelligence-powered tools like chatbots and recommendation engines therefore help local businesses. Your favorite deli, for instance, knows when you are likely to order that pastrami on rye and sends along a discount at the perfect time. AI powers loyalty programs, tracking buying habits to offer customized rewards that keep customers coming back for more.

A 2024 Salesforce study reports that **65% of customers expect personalized interactions**, with businesses that are able to answer these expectations reporting **30% higher customer retention rates**. But too much AI is creepy. No one wants a lunch order tracked like a stock portfolio.

Revolutionizing Marketing and Outreach

Gone are the days of putting up flyers blindly.

AI can use businesses to scan through customer data in running hyper-targeted ad campaigns. Long Island businesses can market all the way down to very specific neighborhoods-even individual zip codes-with the help of various tools, including Google's AI-powered ad manager and Meta's predictive analytics. According to HubSpot, AI-driven marketing campaigns saw an **average ROI increase of 32%** compared to traditional methods in 2024. AI further allows local businesses to create dynamic content, such as videos or social media posts, that change based on audience behavior. But businesses must tread carefully: too much personalization in ads can lead to customer pushback. Transparency about how data is used will be key to maintaining trust.

AI in Hiring and Workforce Development

AI is revolutionizing how local businesses can hire and manage employees. Machine learning-powered resume-scanning tools help surface the best candidates faster, while predictive analytics optimize employee schedules to match peak times of business. AI is being used to design training programs customized for individual employees, boosting productivity and job retention. A report by the National Workforce Council in 2025 found that businesses using AI-driven hiring systems reduced recruitment times by an astonishing **50%** and reduced employee turnover by **18%**. But concern over bias in AI hiring algorithms remains the hot topic. Meanwhile, with automation streamlining operations, some jobs get displaced and require upskilling/retraining programs.

Supply Chain and Inventory Management

The pandemic taught businesses the importance of adaptability, and AI is leading from the front in supply chain disruptions. Predictive analytics tools let businesses predict demand for merchandise to avoid stockouts and reduce overstock. Long Island retailers reported a ***15% reduction in excess inventory*** with AI-based forecasting during this 2024 holiday season.

For example, supermarkets are now using AI to predict exactly which products will be bought at what hour of the day so that the shelves can be filled. But all such systems need correct data to be effective. One glitch in an algorithm-say, misjudging holiday demand-can create chaos, leaving store shelves empty or warehouses overflowing. It's a reminder that even AI is not immune to human error.

 The Role of Generative AI

From creating content to designs and even code, the generative AI revolution is sweeping the world over and taking local businesses by storm. Real estate agents tap into it for virtual tours that are beautiful and marketing, while restaurants are trying their luck with everything from menus to promotions. A recent report by McKinsey noted that **40% of small businesses** adopted generative AI tools in 2025, finding them particularly effective for automating content creation.

On the other hand, such tools raise questions about creativity and authenticity. Businesses have to create some sort of balance in order to be both efficient and single out their brand voice.

Challenges and Concerns

It's not all sunshine and rainbows with the adoption of AI. Cost has to be the major obstacle most local businesses face. High costs in investing in AI tools and systems make the playing field uneven between different players, where some are able to invest and enjoy the advantages while others cannot.

Besides, ethical issues are a big concern. In fact, **48% of small business owners** in 2025 expressed concerns about impacts created by AI on data privacy, job security, and customer trust, a survey by Pew Research found. There is also a fast-growing cybersecurity concern. While AI-powered systems process sensitive data, businesses have to invest in robust security measures to prevent breaches.

And then, of course, there is the human side: AI can take care of certain aspects, but the human touch-one of the things so many local businesses depend on-just can't be replicated.

The Future of AI for Local Businesses 

The influence of AI is only going to rise further locally in businesses, new technologies such as conversational AI, and increased robotics in the suite that will really automate the processes for an improved customer service experience. By 2030, a 2025 study from Gartner estimates that **75% of small businesses** will use at least one AI-powered tool. The only challenge will then be to see whether these tools continue to be practical and accessible for the average professional. For the mom-and-pop shops, the key to success in the face of an AI-led world will all come down to adapting, educating oneself about the technology, and setting up a cautious integration. That is where being able to blend and utilize the technology and still retain some personal touch earns them distinction. 

AI is revolutionizing the way we live, work, and do business on Long Island. Whether you’re a small business owner looking to optimize operations, a homebuyer navigating an evolving market, or an investor seeking data-driven insights, staying ahead of the curve is essential.

As Long Island’s only AI-certified real estate agent, I combine cutting-edge technology with local expertise to help you make informed decisions—whether in real estate or business.

📩 Email me at Dean@TheBeaconTeam.com
🌐 Visit www.TheBeaconTeam.com

🏡 Let’s harness the power of AI to create smarter opportunities—together! 🔥