A significant 75% of retail leaders prefer to wait for the AI landscape to stabilize before making substantial investments, according to the latest KPMG International report, Intelligent retail: A Blueprint for Creating Value through AI-Driven Transformation.
Over half (60%) feel overwhelmed by the sheer volume of AI-related information and hype.
This research was based on insights from nearly 1,400 industry leaders across key global markets.
Outdated legacy systems, concerns about AI-specific risks, and regulatory compliance, can slow progress.
Other key retail findings:
- A staggering 74% of retailers identify data management as a primary barrier to scaling AI.
- Only 19% of retailers have a highly specialized and influential AI team driving strategy across their organization.
“Artificial intelligence isn’t just transforming retail; it’s disrupting it at its core, unlocking game-changing opportunities while forcing retailers to rethink how their entire business functions, from product design through to customer engagement. AI is the ultimate double agent — on one hand, it gives retailers the power to craft immersive, hyper-personalized experiences that captivate customers and streamline operations,” said the report.
“On the other, smarter tools empower consumers to hunt for better deals, compare products instantly and align purchases with their personal values — all with just a few clicks. The customer experience is now a high-stakes battleground, where loyalty can be won or lost in seconds. As consumer expectations escalate, retailers face relentless pressure to deliver seamless, frictionless and deeply personalized interactions across digital and physical spaces.
“The collision of e-commerce, social commerce, omnichannel shopping and rapidly shifting buying behaviors has pushed traditional retail technology and operating models to their limits. To survive, retailers need more than just smarter tools; they need a radically more intelligent and adaptable approach. Retailers are already harnessing AI to supercharge personalization, predict customer needs before they arise, automate customer service with near-human precision and optimize inventory in real time. But this is just the beginning. Over the next five years, AI will likely obliterate the line between online and offline experiences, transforming retail into a seamlessly intelligent, hyper-personalized ecosystem where every interaction feels frictionless.
“But here’s the catch — getting there isn’t automatic. To unlock this future, retailers need more than scattered AI experiments or isolated tools. They need a clear, strategic AI roadmap, modernized systems and collaborative teams that can bridge the gaps between data, technology and customer experience. This report, based on extensive research and interviews with leading retailers, is your guide to navigating this transformation. The future is still being shaped, but emerging trends and patterns provide a clear path forward. By identifying key actions that form a no-regrets approach, we’ll explore how to scale AI effectively, navigate common challenges and help unlock new opportunities for growth. Those who move fast, adapt wisely and embed AI at the core of their business won’t just keep up — they’ll set the pace.”
“In a sector already challenged by a high technology debt, retailers cannot look at AI as yet another line to manage in constrained budgets, or as the panacea for their current challenges. To unlock its potential, retailers must overcome inertia, embrace transformation and integrate AI as a core enabler of customer-centric sustainable growth,” said Isabelle Allen Global Head of Consumer & Retail.
The survey found that 82% of respondents believe that retailers that embrace AI will develop a competitive edge over those who do not.
The report said former Costco CEO Jim Sinegal famously observed that “retail is detail” success is about getting one million small details right every single day.
“For decades, retailers built intricate, interdependent workflows to handle that complexity. But those legacy operating models and legacy systems, designed for a world of in-store, physical transactions, are now struggling under the pressure of today’s hyper-connected, always-on, infinite-choice shopping landscape. Historically, retailers would call all the shots; now the tables have turned and there has been a systemic shift from transaction to relationship-based commerce. Retailers have rushed to plug the gaps — rolling out AI in silos to boost efficiency and control costs, personalize experiences and drive sales. However, our research finds that most of these AI efforts are stuck behind departmental walls, with data trapped in isolated systems. Online, in-store, mobile, marketing, inventory, payments and last-mile delivery — none of them share data in the way AI needs it to, it said.
“Traditional retail tech, built for linear supply chains and one-size-fits-all customer journeys, simply can’t keep up with AI’s real-time requirement for data and speed.
“In the future, autonomous AI agents (agentic) won’t just support retail operations — they’ll run them. Imagine intelligent systems that autonomously interact with customers, adapt in real time to shifting preferences, manage end-to-end shopping experiences, and dynamically optimize inventory, pricing and service.”
“AI agents will likely become always-on digital advisors, delivering hyper-personalized experiences, anticipating needs before customers even think of them and automating routine service with near-perfect precision.”
