What: Retailers and CPG companies are using AI to improve margins, decision-making, customer engagement, and operational execution, but only a minority are scaling it effectively.

Why it is important: This trend highlights a widening competitive divide between retailers that embed AI into core decision-making and those that remain focused on disconnected pilots.

A Consumer Goods Forum and Boston Consulting Group board brief argues that AI is increasingly tied to measurable retail and CPG performance, but only for organisations that move beyond experimentation. While most companies have launched AI pilots, relatively few are scaling use cases across the enterprise or linking them clearly to financial outcomes. The report identifies high-value applications across forecasting, replenishment, pricing, merchandising, transport, marketing, customer engagement, and store operations. It also highlights emerging areas such as generative engine optimisation and agentic commerce, where AI assistants may increasingly influence product discovery and purchasing decisions. The brief stresses that lasting competitive advantage requires more than technology adoption — it depends on use-case discipline, data quality, and organisational redesign. Winners are prioritising use cases with measurable EBIT impact, building stronger data foundations, redesigning operating models, upskilling teams, and creating governance structures to manage risks. Retailers appear ahead of many CPG companies in AI maturity, particularly in demand forecasting and supply chain execution. Scale, discipline, and redesigned operating models separate measurable AI performance from inconclusive experimentation.

IADS Notes: Retailers gaining traction with AI have moved from experimentation to deployment: domain-specific models trained on proprietary data (Retail Touchpoints, January 2026), GenAI embedded in supplier negotiations and pricing workflows (BCG, September 2025), and merchandising shifted from periodic planning to continuous agent-driven coordination (BCG, April 2026). The emerging frontier — agentic commerce, generative engine optimisation, and the workforce and governance redesign these require — is where the next separation will occur (Inside Retail, April 2026; BCG, November 2025).

AI in CPG and retail: how winners are pulling ahead