In a just-released IBM Institute for Business study, Retail and consumer products in the AI era, it is very clear that winning the AI race in retail and consumer products industries means outpacing competitors and meeting and exceeding rising consumer expectations.
Today’s consumers increasingly rely on artificial intelligence for personalized recommendations, frictionless shopping, and smarter decisions. AI also enables brands to automate processes and adapt instantly to market shifts and customer behaviors. Going beyond incremental efficiency improvements, the next leap forward is empowering AI not only to advise but also to act, tapping agentic AI for product development and personalized shopping experiences.
These findings (and datapoints below) are the result of a Summer 2025 survey of 100 executives in retail and consumer products organizations located around the globe in partnership with Oxford Economics. The respondents were CEOs, CIOs, CTOs, COOs, CFOs, or CDOs of their enterprises.
86% of those executives say that AI solutions deliver a clear and measurable competitive advantage.
Where are retailers and brands increasing investment in AI?
As consumers weave the use of AI into the fabric of their lives, business domain leaders are responding by rapidly increasing AI investments, not just through IT budgets, but directly from business domain leaders. By 2027, 35% of total AI spend is expected to be outside of IT budgets.
Where do consumer industry executives say that AI creates the most value?
Two-thirds of retail and CPG executives rank continuously improving customer service as their top driver for using AI. What’s more, 58% of executives say that AI solutions will help improve customer satisfaction and retention. AI has contributed to an average 31% improvement in these areas during the last 12 months.
How do retailers and brands see agentic AI as a driver of innovation?
80% of retail and consumer products companies have a clear strategy to integrate AI into their long-term innovation roadmap. Agentic and autonomous AI will be able to independently coordinate and execute complex tasks across the value chain and drive industry transformation.
To what extent are leading retailers and brands using AI to reinvent operations?
76% of executives are already transforming their business models to leverage AI tools for both operational efficiency and new revenue streams. Additionally, 84% of executives believe AI will significantly enhance their ability to respond rapidly to market trends, disruptions, and evolving customer needs. To drive more benefits from AI, retail and consumer products companies need to increase the use of the considerable proprietary data they collect to train AI models.
How does AI contribute to lasting transformation in retail and consumer products industries?
It happens when AI frameworks move beyond recommendations, carry out actions, and execute complex, multi-step customer interactions in real time. For example, hyper-personalized product suggestions adapt instantly to a shopper’s preferences, loyalty status, and live inventory data. Dynamic pricing strategies and promotions are tailored to context. E-commerce transactions are managed end-to-end without friction, from building a shopping cart and applying discounts to arranging delivery and processing returns.
77% of surveyed retail and consumer product executives report significant revenue growth contributions from AI-powered initiatives.
At IBM, our retail and consumer products company clients are looking for a distinct advantage in today’s rapidly changing environment. They partner with IBM’s researchers and consultants to become more consumer-centric by delivering compelling brand and store experiences, collaborating more effectively with channel partners, and aligning demand and supply. The bottom line is the bottom line: they are seeking help to deliver rapid time to value.
What can retailers and consumer products companies do now to build a competitive advantage with AI?
- Deliver permissioned and hyper-personalized customer experiences.
Harness consumer preferences data to deliver tailored product recommendations, immersive shopping journeys, and real-time service solutions. Pace adoption to customer readiness and acknowledge that not all customers are ready for AI shopping agents. - Meet customers where they are—even outside your channels.
Help ensure that AI intermediaries and partnerships represent your brand truth. Provide governance and guardrails to avoid security, compliance, and trust issues. Redefine and streamline your customer engagement and product experience by deploying AI systems in high-impact areas such as order-to-cash, procure‑to‑pay, and supply chain orchestration. - Enable conversational commerce and automate key tasks.
Build capabilities for generative engine optimization (GEO) with structured facts, schema markup, comparison tables, FAQs, and fresh customer data feeds. Help answer engines find, cite, and recommend your products with confidence. Start operational AI by delivering clear, low-risk value on repetitive tasks such as supplier onboarding, inventory optimization, and order management. - Orchestrate collaboration between AI agents and across consumer ecosystems.
Break down silos and establish seamless connections between business systems, tools, and data. Integrate AI assistants across the full retail value chain, transforming standalone AI helpers into coordinated crews of intelligent, autonomous agents capable of forecasting, complex decision-making, and process execution.
The full Retail and consumer products in the AI era study and report will help retail industry and consumer products organizations better understand how they can pivot to AI-driven business models and build a competitive edge with AI.
The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.
