IBM survey reveals how retailers are using AI
A new survey indicates the use of artificial intelligence is growing and expanding in the retail industry.
Retail and consumer product executives are "dramatically" shifting their focus toward AI, according to "Embedding AI in Your Brand’s DNA," a new global study of retail and consumer products executives from the IBM Institute for Business Value.
In 2025, respondents say they plan to allocate an average of 3.32% of their revenue to AI — equivalent to $33.2 million annually for a $1 billion company. Survey data indicates this investment is set to span functions such as customer service, supply chain operations, talent acquisition, and marketing innovation.
Respondents also expect AI to evolve from a back-end tool to a core business driver, with projected AI technology investments beyond the IT function growing by 52% during the next year.
[READ MORE: Survey: Retail leaders optimistic on AI's holiday impact]
The study revealed that 81% of respondents and 96% of their team members are already using AI to a moderate or significant extent. Respondents said they want to expand AI usage to more sophisticated use cases, such as integrated business planning, where they plan to increase its usage by 82% in 2025.
Also, respondents expect that 31% of their employees will need to learn new skills to work with AI in the next year, increasing to 45% within three years.
In other findings:
- AI use in customer service, particularly for personalized responses and follow-ups, could grow by 236% in the next 12 months when compared to the prior year based on survey responses. Survey data indicates that 55% of these improvements are expected to involve human-AI collaboration, while 30% would be fully automated.
- Despite 87% of respondents claiming to have clear AI governance frameworks, fewer than 25% said they have fully implemented and continuously review tools to manage risks like bias, transparency, and security.
IBM suggests that retailers should tailor AI initiatives to align with their brand priorities and collaborate with strategic partners, including start-ups and technology companies. They are also advised to break down silos between finance, technology, and business leaders.
By fostering cross-functional collaboration, IBM says these AI stakeholders can jointly build strong business cases that demonstrate how AI can help deliver a long-term competitive advantage.
"AI is no longer just a tool; it’s a strategic imperative," said Dee Waddell, global industry leader, consumer, travel & transportation Industries at IBM. "Retail and consumer product companies are at a tipping point where embedding AI across their operations can help define not just productivity gains, but the future of brand relevance, engagement and trust."
These findings contradict the results of a recent survey of business and IT decision-makers in retail from AI-based application performance monitoring technology provider Riverbed in which 95% respondents said AI is a top C-suite priority and 84% agreed it provides a competitive advantage.
However, only 40% of respondents to that survey said they are fully prepared to implement AI projects now.
The IBM Institute for Business Value, in cooperation with Oxford Economics, surveyed 1,500 global retail and consumer products executives in 15 countries in the third quarter of 2024.
