As Retailers Eye AI, Spending To Surge 52%: IBM Study

Retail and consumer product executives are shifting their focus towards artificial intelligence, with projections indicating that spending outside of traditional IT operations could surge by 52% in the next year, a new study from the IBM Institute for Business Value has found. The report reveals how brands are preparing for the next phase of AI-driven transformation across the enterprise.

By 2025, surveyed retail and consumer products companies plan to allocate an average of 3.32% of their revenue to AI—equivalent to $33.2 million annually for a $1 billion company. This investment is set to span functions such as customer service, supply chain operations, talent acquisition, and marketing innovation, highlighting AI's expansion beyond traditional IT applications.

Other findings of the study, which surveyed 1,500 global retail and consumer products executives in 15 countries in Q3 2024, include:

The report found that 81% of surveyed executives and 96% 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 where they plan to increase usage by 82% in 2025.

Executives surveyed expect that 31% of employees will need to learn new skills to work with AI in the next year, increasing to 45% within three years. AI use in customer service, particularly for personalised responses and follow-ups, could  grow by 236% in the next 12 months when compared to the prior year. Responses indicate that 55% of these improvements are expected to involve human-AI collaboration, while only 30% would be fully automated.

Investment in ecosystem platforms—tools that facilitate exchange of data and AI models—could rise substantially. Respondents indicated they expect growth from 52% today to 89% within three years as their companies look to blend AI capabilities with business and technology partners to accelerate innovation and drive efficiencies.

Despite 87% of surveyed executives claiming to have clear AI governance frameworks, fewer than 25% have fully implemented and continuously review tools to manage risks like bias, transparency, and security. This reveals a critical gap in operational oversight.