Microsoft introduces xPilot with Hanshow, a retail AI platform that uses Azure to connect in-store data with digital twins and AI agents for store operations

Microsoft has introduced xPilot with Hanshow, a retail-focused platform that applies real-time AI to physical store operations. Rainbow Department Store is an early adopter providing a live testbed for operational and process improvements.

xPilot turns in-store sensor data into a digital replica of the store (a digital twin) and uses AI agents (software that can autonomously suggest or trigger actions) around shelf availability, planogram compliance and staff tasks. The solution is built on Azure and uses Microsoft Fabric and Foundry.

For Microsoft's investment narrative, xPilot demonstrates a full-stack use case spanning IoT devices, data infrastructure and AI agents running on Microsoft platforms—a reference deployment that can matter when global retailers compare Microsoft against alternatives such as Amazon Web Services and Google Cloud for store-modernization projects.