According to findings from the IBM Institute for Business Value, 86% of organizations report that AI already delivers a clear and measurable competitive advantage, while 77% say it is driving significant revenue contributions today.
Those numbers are a wakeup call for enterprises still in the experimental phase of AI integration: the competition is moving fast and capturing real, bottom-line value with their AI investments.
At the same time, 84% of executives say AI will significantly enhance their ability to respond to disruption and evolving customer expectations. That matters, because the competitive frontier has moved. It’s no longer defined by price or product alone, but by experience, adaptability, and intelligence at every touchpoint.
The implication is clear: AI is not just transforming retail and consumer products but also what it takes to compete.
The Next AI Investment Shift: From Efficiency to Innovation
Just as important as how much organizations are investing is where they’re investing.
On the whole, AI investment is accelerating rapidly across the enterprise. Perhaps more surprisingly, however, is the revelation that said investment is no longer confined to IT. By 2027, 35% of AI spend is expected to sit outside of IT budgets, driven by business leaders who see AI as a direct lever for growth.
The focus of AI spending in retail is shifting:
- Operational efficiency is declining as the primary use case (from 44% to 33%)
- Product and service innovation is rising (from 35% to 41%)
- Business model innovation is gaining traction (from 21% to 26%)
This marks a critical transition. AI is no longer just about doing things better. It’s about doing entirely new things.
In fact, 80% of retail and consumer products companies now have a clear strategy to integrate AI into long-term innovation roadmaps. The leaders are not simply optimizing existing workflows, but are reimagining them from the ground up.
From Recommendation to Execution: The Rise of Agentic AI
The next phase of AI is defined by action. Retailers and brands are moving beyond systems that generate insights to systems that execute decisions. Agentic AI, capable of autonomously coordinating tasks and workflows, is emerging as a key driver of this shift.
This matters because the speed of business has changed. Markets are moving faster, customer expectations are evolving in real time, and static insights are simply no longer enough.
AI must act. That’s why 84% of executives believe AI will enhance their ability to respond rapidly to change. It’s also why 76% are already transforming their business models to leverage AI for both efficiency and unlocking net new revenue streams.
Across the value chain, AI is being embedded into critical workflows:
- Personalization and customer engagement.
- Supply chain and demand planning.
- Marketing and campaign orchestration.
- Customer service and issue resolution.
The result is a more responsive, adaptive enterprise that can sense and respond to change as it happens.
Customer Experience Is the New Battleground
If there is one area where AI is making the most immediate impact, it’s customer experience.
According to the research, two-thirds of executives rank improving customer experience as the top driver for AI adoption, and 58% say AI directly improves customer retention and satisfaction. Over the past year alone, organizations report an average 31% improvement in these areas.
Why? Because AI enables something retailers have long pursued but struggled to scale: true personalization.
AI can analyze vast amounts of behavioral and transactional data to:
- Deliver hyper-relevant product recommendations.
- Personalize marketing messages in real time.
- Enable conversational and frictionless commerce.
- Anticipate customer needs before they are expressed.
In a world where customers expect every interaction to feel tailored to their needs, AI becomes the foundation of loyalty and growth.
The Data Gap: A Barrier to Scale
Despite the momentum, a critical challenge remains: data readiness. While 64% of organizations say their proprietary data is accessible to AI, only 49% say it is usable, and just 26% is actually being used.
This gap is one of the biggest barriers to unlocking AI’s full potential. Retail and consumer products organizations sit on vast amounts of valuable data: from customer transactions, to supply chain signals, to inventory data. To their consternation, much of it remains fragmented across systems and silos.
For AI to move from insight to action, it must operate on real-time data, integrated systems, and secure, governed environments. Without this foundation, AI cannot scale. With it, AI becomes a true operational partner.
AI Across the Value Chain
The impact of AI is expanding rapidly across every part of the business. By 2027, organizations expect significant increases in AI adoption across:
- Customer relationship management (up to 66%).
- Personalized responses and engagement (up to 78%).
- Supply chain and demand planning (up to 90%).
- Logistics and warehouse operations.
- Content and campaign management.
This expansion reflects a broader shift: AI is becoming the connective tissue of the enterprise.
It links systems, automates processes, and enables end-to-end orchestration across the value chain. Instead of isolated tools, organizations are building interconnected AI ecosystems that drive continuous optimization and innovation.
From Systems to Ecosystems
The future of AI in retail is collaborative.
Agentic and autonomous AI systems are beginning to operate across ecosystems, connecting brands, partners, suppliers, and platforms. These systems enable seamless experiences that extend beyond a single organization.
But this requires a new way of thinking. Organizations must find ways to:
- Break down internal silos.
- Enable secure data sharing across partners.
- Build API-first, modular architectures.
- Establish governance frameworks for AI collaboration.
Those that succeed will be able to deliver integrated, end-to-end experiences that redefine customer expectations.
Leading in the Intelligent Retail Era
The message from the data is clear: AI is already delivering value and the pace is still accelerating.
Organizations that lead in this new era are doing three things well:
- Investing beyond IT, embedding AI across business functions.
- Focusing on innovation, not just efficiency.
- Building the data foundation required to scale AI across the enterprise.
The opportunity is significant, but so is the risk of inaction. As AI becomes central to how businesses operate, those that fail to adapt will struggle to keep pace with more agile, data-driven competitors. The question of the day is no longer whether to invest in AI, but how quickly you can turn that investment into impact.
Ready to accelerate your AI journey? Let’s talk today to explore how Hakkoda can help you operationalize AI, unlock the value of your data, and build a competitive edge in the AI era.
