What: Only a minority of retailers are successfully scaling AI, despite widespread adoption and urgent workforce challenges.

Why it is important: The ongoing struggle to scale AI in retail demonstrates the need for continuous investment in upskilling, infrastructure, and governance.

The article examines the fragmented approach US states are taking toward AI readiness, emphasising the necessity of a coordinated strategy that includes workforce upskilling, industry adoption, innovation clusters, and research and development. This mirrors the current state of the retail sector, where AI adoption is high but effective scaling remains limited to a minority of companies. Retailers face significant challenges, particularly in upskilling their workforce and overcoming infrastructure and compliance barriers, with only 36% of employees feeling prepared for AI-driven changes. Major players such as Amazon and Target have responded to these pressures with substantial job cuts and reskilling initiatives, reflecting the sector’s shift toward automation and new talent strategies. Despite these challenges, leading innovators are leveraging AI to drive product innovation and outperform competitors. Still, the sector as a whole continues to grapple with regulatory complexity and the need for robust governance. The convergence of these trends highlights the critical importance of sustained investment in people, technology, and policy to ensure resilience and growth in the AI era. 

IADS Notes: As reported by BCG in September 2025, foundational skills were identified as central to retail workforce adaptability, with only 36% of workers feeling prepared for AI-driven change. Forbes highlighted in October 2025 that Amazon’s layoffs underscored the sector’s rapid move toward automation. Additional research from BCG and Deloitte throughout 2025 confirmed that only a minority of retailers have successfully scaled AI, despite widespread adoption. These sources collectively emphasise the ongoing need for systematic upskilling, robust governance, and investment in innovation, as leading companies continue to outperform peers by integrating technology and talent strategies.

Are US States ready for the AI economy?

BCG: The AI Maturity Matrix - full report