What: Retailers are investing heavily in AI, but measurable productivity gains and widespread operational transformation remain limited.

Why it is important: This situation underscores the gap between technological promise and practical results, echoing recent findings on AI’s uneven impact in retail.

Despite significant investment and enthusiasm for artificial intelligence, the retail sector has yet to experience a broad-based productivity boom. While AI has generated pockets of operational improvement and some leading retailers report notable gains, the majority of companies struggle to achieve measurable results at scale. Many retailers face persistent obstacles in integrating AI into core business processes, with only a small fraction successfully transforming workflows or realising substantial returns on their investment. Workforce adaptation remains a challenge, as employees—especially those in entry-level roles—often feel unprepared for the changes AI brings, and upskilling initiatives have not kept pace with technological advancements. Meanwhile, consumer adoption of AI-powered shopping tools is rising, contributing to incremental improvements in customer service and sales efficiency, but these advances have not yet translated into the sweeping productivity gains once promised. The current landscape highlights the complexity of turning technological innovation into tangible business outcomes, as retailers navigate the realities of implementation and organisational change.

IADS Notes:
As reported in Forbes (March 2025), leading retailers achieved notable productivity gains through AI, but most companies have not realised broad benefits. The Wall Street Journal (December 2025) highlighted that only 25% of retailers report substantial returns on AI investment, with just 10% successfully scaling initiatives. BCG (June 2025) emphasised ongoing challenges in workforce upskilling and workflow redesign, while Le Monde (October 2025) noted that only 36% of retail employees feel prepared for AI-driven change. Despite these hurdles, Forbes (March 2025) documented growing consumer engagement with AI-powered shopping, which has led to some operational improvements and efficiency gains, underscoring the persistent gap between AI’s potential and its realised impact in retail.

The AI productivity boom is not here (yet)