What: Persistent misalignment between executives and middle managers is slowing AI adoption and value realisation in retail.

Why it is important: The gap between executive ambition and operational reality explains why only a minority of retailers achieve scalable AI value, despite sector-wide investment.

AI adoption in retail is being hampered by a significant disconnect between senior executives and middle managers, with each group experiencing and evaluating the technology’s impact differently. While executives are optimistic and report high levels of engagement and perceived returns, middle managers—tasked with integrating AI into daily operations—are more cautious and less convinced of its immediate value. This divide is reflected in the numbers: less than 10% of companies are capturing meaningful AI value at scale, despite widespread investment and strategic commitment. Middle managers face the brunt of operational challenges, from workflow disruptions to increased administrative burdens, which can make AI feel more like an added pressure than a solution. The result is a “messy middle” where ambitious strategies often fail to translate into tangible business outcomes. Closing this gap requires not only technological investment but also cultural change, clear communication, and practical support for those responsible for execution. Without alignment and readiness across all leadership levels, the promise of AI in retail will remain largely unrealised.

IADS Notes: Harvard Business Review (Feb 2026) identifies organisational barriers and leadership misalignment as primary reasons for stalled AI adoption in retail, with only about 10% of retailers managing to scale initiatives. The Economist (Feb 2026) confirms that most retailers have yet to achieve broad productivity gains from AI, as workforce adaptation lags behind investment. The Economist (Oct 2025) highlights the mounting pressure on middle managers as AI and automation reshape roles, making their engagement crucial for operational resilience. BCG (Apr 2025) stresses that cultural transformation and CEO leadership are more decisive than technology alone, while BCG (Jun 2025) finds that only 36% of retail employees feel prepared for AI-driven change, underscoring the need for workflow redesign and stronger leadership support.

Managers and executives disagree on AI—and it’s costing companies