What: GenAI is transforming retail supplier negotiations and operational processes, enabling data-driven decision-making and continuous improvement.

Why it is important: The integration of GenAI across retail operations is essential for sustained competitive advantage, as only a minority of companies have successfully scaled these solutions.

GenAI is fundamentally reshaping how retailers approach supplier negotiations and operational processes by providing the ability to rapidly synthesise complex data and generate actionable insights. This technological shift allows retailers to move away from rigid, manual planning cycles and instead adopt continuous, data-driven engagement with suppliers, resulting in more favourable cost management and improved service levels. Automation of planograms, pricing, and assortment strategies is now becoming standard, replacing outdated Excel-based systems and enabling more dynamic, responsive decision-making. However, the true value of GenAI is realised only when organisations redesign their workflows and foster a culture of innovation and adaptability. Despite the widespread enthusiasm for AI adoption, only a small fraction of retailers have managed to scale these solutions effectively, highlighting the importance of organisational change and robust implementation strategies. Early adopters are already seeing measurable gains in revenue and operational efficiency, signalling that the future of retail will be defined by those who successfully integrate GenAI across all facets of their business.

IADS Notes: As highlighted by BCG in November 2024, 87% of retailers implementing GenAI reported revenue increases of at least 6%, demonstrating the technology’s ability to overcome long-standing disadvantages in supplier negotiations by synthesising vast amounts of data and generating actionable insights. AI agents are revolutionising store supply chains, delivering measurable productivity gains and reducing procurement risk management time by 75%, as seen in February 2025. The shift from manual, Excel-based planning to AI-driven automation is now universal, with all surveyed retailers in April 2025 planning AI-enabled merchandise initiatives to address inefficiencies that previously cost up to 4.5% of gross sales. However, the full value of GenAI is only realized when organizations redesign work processes and foster employee-driven innovation, as only 10% of companies have successfully scaled these solutions according to BCG in September 2025. The challenge of integrating GenAI across end-to-end operations remains significant, with technical and behavioral hurdles persisting, yet early adopters continue to report substantial gains in both revenue and operational efficiency, confirming that strategic, organization-wide implementation is essential for sustained competitive advantage.

GenAI gives retailers an edge in supplier negotiations