Artificial intelligence is reshaping the retail industry

To better understand how retailers are approaching AI, the US retailers federation (NRF) surveyed 50 AI leaders at U.S.-based retailers in 2025. The findings offer a snapshot of an industry in transition, with leaders making significant investments while grappling with strategic and operational challenges. 

AI governance is a top priority 

Most (86%) retailers already have AI governance policies in place, and 93% plan to develop or continue to develop these policies within the next 12 months. Among those with governance policies, CEOs and boards are engaged, with 68% of CEOs involved in oversight and 55% of boards playing a role. 

Investment is growing but still modest 

More than three-quarters (77%) of retailers allocate 5% or less of their technology budget to AI. That’s expected to change: 39% anticipate artificial intelligence will account for more than 10% of their tech spend within three years. 

Early adoption areas are clear 

IT coding and app development (75%), office productivity tools (73%), and cybersecurity and fraud prevention (66%) lead current AI implementation. Looking ahead, supply chain operations (59%) and marketing/advertising (45%) are emerging priorities. 

Positive ROI is emerging 

Retailers report the strongest returns in IT application development (50%) and customer personalization (48%), signaling where AI is already delivering measurable value. 

Strategic challenges remain 

Cost (57%), model accuracy (57%) and workforce expertise gaps (55%) top the list of internal concerns. Externally, potential lawsuits and regulatory uncertainty are major risk factors, with nearly three-quarters (71%) worried about consumer class actions and another 71% about IP litigation. Source and pictures: NRF.

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