Why most retailers still struggle with advanced AI?
Is retail truly ready for artificial intelligence that promises autonomous decision-making and real-time operations?
A new global study suggests that most players are still just scratching the surface.
Every time a consumer opens an online chat to resolve a question, they expect an immediate response. Behind this automated exchange lies the most widespread application of artificial intelligence in retail today: chatbots and virtual assistants.
However, while the digital customer experience is advancing, the adoption of more sophisticated capabilities remains limited internally. This is revealed in the TCS Global Retail Outlook 2026 report, produced by Tata Consultancy Services (TCS) (BSE: 532540, NSE: TCS), which analyzes the state of technological transformation in the sector.
The study concludes that most retailers are not yet prepared for so-called agentic AI or multi-agent AI systems: 85% report that they have neither started implementing nor even planned such solutions. Nearly half (48%) of retailers have no plans to implement these advanced AI systems.
AI Still Superficial
Currently, only 24% use AI for autonomous decision-making. Additionally, 51% focus their primary AI initiatives on basic technologies such as chatbots and virtual assistants. This suggests that the adoption of advanced, potentially transformative capabilities remains nascent.
The report is based on responses from over 800 senior retail executives across 18 countries and five major subsectors. Among its findings, it identifies operational pressures shaping the sector’s transformation leading up to 2026.
Priorities Toward 2026
After cost optimization, AI-driven technologies emerge as essential capabilities for the coming years. In particular, real-time detection of market changes and competitor moves ranks second among ten strategic priorities.
Adaptive, AI-based decision-making ranks third. However, obstacles are not solely technological. Workforce skill gaps are among the top challenges through 2026, second only to financial pressures. Even so, only 33% of respondents see employee digital literacy programs as a way to drive organizational transformation and talent development.
Underutilized Data
The survey also shows that retailers identify AI-driven decision-making, faster time-to-market for products and services, and automated workflows as the highest-impact capabilities in the short term. These priorities surpass traditional analytics and business intelligence tools.
Yet, the use of strategic data remains limited. Only 37% leverage loyalty program insights to define channel or in-store experience strategies. Just 45% apply such data to pricing and promotion decisions. In logistics, 39% are deploying AI-driven demand detection to strengthen supply chain resilience.
Based on these results, the study warns that transforming the retail economy will require deeper AI integration in key areas such as supply chain management and pricing strategies.
Natacha Emicuri, Consumer Business Group Head at TCS Latin America, explains:
“These findings demonstrate that in a market rapidly moving toward smart, experience-focused retail, a paradigm shift is required. TCS’s vision for this future integrates artificial intelligence, machine learning, and multi-agent systems to help retailers interpret signals, adapt operations in real time, and orchestrate decisions across the entire value chain.”
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