Dive Brief: According to a report released Nov. 12 by BRG, formerly Berkeley Research Group, over eight in 10 retailers have incorporated artificial intelligence into their operations to a moderate or significant degree. Currently, North American retailers utilize AI for functions such as marketing (70%), IT and digital operations (62%), digital commerce (56%), and merchandising strategy and pricing (54%). Looking ahead, they plan to expand AI use to planning and product flow (40%), corporate operations (38%), supply chain and sourcing (36%), and distribution and logistics (32%). However, the report notes that AI adoption does not necessarily “translate into tangible business impacts. ” While AI tools like ChatGPT and Copilot can handle routine tasks such as writing product descriptions or marketing copy, it remains unclear whether these capabilities are driving noticeable changes for retailers. Dive Insight: With the rise of AI companies, BRG recommends that businesses focus AI investments on solving specific business challenges. The report identifies key performance indicators to gauge AI benefits, including average order value, inventory turnover rate, revenue, customer retention, and improvements in labor efficiency. “Companies should align AI within a clearly defined target operating model rather than forcing the technology into existing processes, ” the report advises. “AI is costly, and payback periods vary greatly; retailers need a clear roadmap with well-defined business cases, ROIs, and pilot programs to test and launch AI initiatives. ” BRG’s cautionary stance comes as major retailers invest heavily in AI. For example, Sam’s Club uses its AI-powered Scan & Go smartphone app to verify purchases as it reimagines checkout across 600 stores, according to the report. Last year, the wholesale retailer opened a store in Grapevine, Texas, without checkout lanes, requiring shoppers to use the app. Levi Strauss & Co.

partnered with Microsoft last month to implement a “complex agentic framework” across various departments, including IT, human resources, and operations. Similarly, in July, Walmart introduced its own AI framework centered around four super agents: Sparky, focused on customers; Marty, for suppliers, sellers, and advertisers; a store associate agent; and an agent for technology developers. The retailer plans to create more specialized subagents over the next year. Target is also leveraging AI as part of its strategy to boost sales and foot traffic. It employs generative AI to generate new ideas for merchants using its proprietary AI platform, Target Trend Brain. Additionally, Target uses AI to assess vendors applying to join Target Plus, its third-party marketplace, said Target Chief Information and Product Officer Prat Vemana in an October interview with Retail Dive. As the retail sector adopts varied AI-driven strategies, its full impact remains uncertain. Retailers experiment with AI across functions like search and product recommendations while simultaneously seeking to understand AI’s long-term effects on their businesses.