The manuscript explains the transforming power of AI-powered virtual simulations on consumer behaviour in retailing, with a focus on impulse buying decisions. Given the changing retail landscapes, integrated with advanced technologies, organizations are banking more and more on AI-enabled tools to enhance operational efficiency and customer experience. On the foundation of resources-based view and dynamic capabilities theory, a conceptual model is proposed identifying customer experience and operational efficiency as major competence that AI can leverage. The efficiency variable will be key mediating variable influenced by AI simulations in the study along with the integration of Consumer Behaviour Theories, such as the Theory of Planned Behaviour and Stimulus-Organism-Response Model, the research clarifies how AI technologies act as stimuli which have an overwhelming influence on consumer attitude and decision-making processes. Systematic literature review will, therefore, contribute to assessing the current state of AI in retail and identify the gaps. It surveys the existing research and highlights the implications for future studies. The findings underline the fact that, in a marketplace becoming ever more digital, thus retailers have to be innovative by embracing new technologies if they hope to maintain competitive advantage and maximize customer satisfaction.