Kyndryl’s Retail Readiness Report found that 9 out of 10 leaders in the retail space agree that AI will “completely” change the roles at their companies within a year.
Despite the sentiment across the industry that AI has reached its tipping point, over 70% of retail enterprises are already using AI in a big way (top use-cases include cybersecurity, enterprise applications like CRM and ERP, and customer experience), and one third (33%) have increased investment in the space this year.
Heading into the new year, the most significant change for retail leaders does not lie in the introduction of AI, but in the way organizations are using it.
Kyndryl’s 2026 forecast predicts growth in agentic AI frameworks to unify communication between buyer, analyst, and store manager networks. Successful AI development will hinge on using AI the right way and “letting technology do its job”.
Report Highlights
- 89% of leaders in the retail industry predict AI will “completely transform” the roles and responsibilities at their organization within 12 months.
- 33% of retail leaders report an average increase of 33% in their AI investments in the past 12 months, and 63% say they feel more pressure to prove ROI on their AI investments vs. a year ago.
- Half of retailers reported they struggle to keep up with technology advancements (lower than the global average of 60%).
- 48% of retail leaders say innovation is delayed by foundational tech-stack issues, and 39% say their organization’s culture stifles innovation
- While over 70% of retail organizations already use various AI tools, the report predicts a need to retrain and recalibrate current usage for optimal efficiency.
“In 2025, the retail industry found itself at a complex inflection point. While the global retail market is estimated to hover around $30 trillion, with e-commerce accounting for roughly 20% of that total, the vast majority of sales still flow through physical stores. At the same time, retailers face mounting pressure from higher costs, supply-chain disruption, cyber-attacks, labor shortages and increasingly sophisticated consumer expectations,” said the report.
“Against this backdrop, technology becomes an enabler. Some 48% of retail leaders report making upgrades to their IT infrastructure, according to the Kyndryl Readiness Report. And that investment in digital transformation is significant during a time when nearly a quarter of those same leaders say technical debt holds their organizations back. But despite the scale of investment, many are struggling to translate it into operational agility, profitable growth or seamless omnichannel execution.
“The result is an industry suspended between ambition and execution — eager to modernize, yet burdened by complexity. Retailers have spent years layering new technologies atop legacy systems, but many are realizing that progress now depends less on adding capability and more on clarifying purpose. The coming year will challenge them to reconcile digital ambition with operational discipline, to turn data into foresight and to make technology not just an investment, but an instrument of confidence.”
Rick Olson, Consult Partner at Kyndryl, said retailers are going back to basic foundational elements of business operations. This includes inventory management, supply chain simplification and refining clear process automation.
“By concentrating on stabilizing, and prioritizing these core processes, they aim to strengthen
their operational backbone. Layering advanced AI solutions on top of a broken system adds increased disruption and added complexities that deteriorate the perceived reliability of using AI systems. Reinforcing basic operational practices first will ensure any future technological advancements are built on a solid foundation,” he said.
“The Kyndryl Readiness Report underscores this approach: nearly half (48%) of retail leaders say innovation is stalled by outdated tech stacks. Furthermore, only 31% feel prepared to manage external risks, and 48% identify IT infrastructure upgrades as the most effective way to mitigate these challenges. These findings highlight that strengthening foundational systems is critical before layering advanced technologies.”
Olson said omnichannel systems can be one of the largest assets for a retailer across customer
personalization, vendor partnerships, and converting BOPIS (Buy Online, Pick Up In Store) to
store traffic.
“Retailers can take advantage of the investment they made by asking what does their customer want in their shopping experience. Unifying data to have real-time visibility across multiple channels is critical to your operations if you promise availability within 30 minutes. Research from multiple sources show 75-85% of consumers want retailers and brands to deliver a personalized experience.
“This is taking full advantage of the first party data their omnichannel systems provide.”
Olson said Agentic AI frameworks present opportunities for enhancing efficiency and reducing the time required for many operational tasks in the retail sector.
“Notable applications are already visible in supply chain orchestration, where agentic AI optimizes delivery schedules and dynamically allocates inventory based on predictive analytics. In customer service, intelligent agents are reducing resolution times and improving personalization at scale. While our research shows leaders increased investments in AI by 33% over 12 months, many struggle to see meaningful returns, with 62% said they have more pilots than they can scale,” he explained.
“They said complexity in technology environments and difficulty aligning business and technology teams remain the top barriers to scaling these investments. As retailers move into the new year, there will be a strong focus on establishing foundational data and organizational structures. Those who prioritize simplification and invest in robust infrastructure and data governance will be best positioned to start to see the ROI of agentic AI.”
More from Retail Insider:
