- The report found that 81 percent of surveyed executives and 96 percent of their teams are already using AI to a moderate or significant extent
- Fewer than 25 percent have fully implemented tools for AI governance frameworks
A new global study from the IBM Institute for Business Value found retail and consumer product executives are dramatically shifting their focus toward artificial intelligence (AI) with spending increasing over 50 percent.
The report, titled “Embedding AI in Your Brand’s DNA,” reveals how brands are preparing for the next phase of AI-driven transformation across the enterprise as, responding indicating project spending outside of traditional IT operations could grow by 52 percent in 2025.
“AI is no longer just a tool; it’s a strategic imperative,” said Dee Waddell, global industry leader, consumer, travel & transportation industries at IBM, in a press statement with the report’s release. “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.”
Budget Allotments
By 2025, retail and consumer products companies surveyed say they plan to allocate an average of 3.32 percent of their revenue to AI. This breathe of investment includes for customer service, supply chain operations, talent acquisition, and marketing innovation.
The adoption of AI has accelerated as 81 percent of surveyed executives and 96 percent of their team are already using AI to a moderate or significant extent. Executives indicate they want to expand AI usage to more sophisticated use cases, such as integrated business planning.
Use in the workforce will continue to grow, as 31 percent of employees will need to learn new skills to work with AI in the next year according to respondents—increasing to 45 percent within three years.
Customer Service Growth
The largest growth area is expected in customer service, as personalized responses and follow-ups, could grow by 236 percent in the next 12 months when compared to the prior year based on survey responses. Notably, responses indicate that 55 percent of these improvements are expected to involve human-AI collaboration, while only 30 percent would be fully automated.
Where the money will be invested is in tools that facilitate exchange of data and AI models. Respondents indicated they expect growth from 52 percent today to 89 percent within three years as their companies look to blend AI capabilities with business and technology partners to accelerate innovation and drive efficiencies.
But for all the talk about increasingly using AI, there remains a significant gap between actual practices being installed. Despite 87 percent of surveyed executives claiming to have clear AI governance frameworks, fewer than 25 percent have fully implemented and continuously review tools to manage risks like bias, transparency, and security. This reveals a critical gap in operational oversight.
Retail at AI Tipping Point
IBM officials emphasized that successful brands can evolve from viewing AI as merely a productivity booster to positioning it as a core driver of enterprise innovation—the transformation will require rethinking traditional governance and reskilling strategies. Retailers will need to tailor AI initiatives to align with their brand priorities and collaborate with strategic partners, including start-ups and technology companies.
Equally important is breaking down silos between finance, technology, and business leaders. By fostering cross-functional collaboration, business can demonstrate how AI can help deliver a long-term competitive advantage.
“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,” said Waddell.
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