What: CEOs plan to increase AI spending in 2026 despite mixed returns, with most seeing the greatest impact in marketing and customer service.

Why it is important: Persistent investment in AI, despite spotty results, highlights the sector’s belief in technology’s potential to drive future growth and competitive advantage.

Despite less than half of current artificial intelligence projects delivering positive returns, 68% of CEOs from major public companies plan to increase AI spending in 2026. The Teneo survey of over 350 CEOs reveals that while the most tangible benefits have been realized in marketing and customer service, higher-risk areas such as security, legal, and HR remain challenging for AI adoption. There is a notable divergence in expectations: 53% of institutional investors anticipate returns within six months, but 84% of large-company CEOs expect it will take longer. Interestingly, two-thirds of CEOs believe AI will increase both entry-level and senior leadership headcount, signaling a shift in workforce structure and talent strategy. The survey also reflects broader economic caution, with only 31% of large-company CEOs expecting global economic improvement in early 2026, and a strong majority predicting increased merger-and-acquisition activity. This ongoing commitment to AI investment, even amid uncertain returns, underscores the technology’s perceived strategic value for future growth and competitive positioning in the retail sector.

IADS Notes: Recent IADS database sources confirm that AI investment remains a top priority for retail CEOs, even as measurable returns remain elusive for many. BCG’s January 2025 report highlights that nearly half of retailers have seen revenue increases from AI initiatives, but only 25% report substantial value, with persistent challenges in scaling, data privacy, and cybersecurity. Bain & Company’s December 2025 executive survey echoes these findings, noting that just 10% of retailers have successfully moved from pilot projects to full-scale AI deployment, with leadership, workflow redesign, and workforce upskilling emerging as critical success factors. The workforce impact is particularly notable: BCG’s September 2025 research shows only 36% of retail employees feel prepared for AI-driven change, underscoring the urgent need for systematic upskilling and balanced integration of human and machine capabilities. Despite these hurdles, early adopters are achieving significant gains—Forbes (March 2025) reports that leading retailers have realized 6% or more revenue growth and up to 30% improvements in customer service efficiency through AI. The sector’s rapid AI adoption is also transforming internal processes, with major players like Walmart and Sephora leveraging AI for both automation and enhanced customer experience (BCG, November 2025). Collectively, these sources illustrate that while the path to AI-driven value is complex, sustained investment, leadership commitment, and workforce transformation are essential for long-term competitiveness in retail.

CEOs to keep spending on AI, despite spotty returns