Executives in the retail and consumer products sector are significantly increasing investments in AI technologies, anticipating a 52% rise in spending over the next year, according to an IBM survey.
Retail and consumer product executives are making significant strides in artificial intelligence (AI) adoption, as highlighted by a recent survey conducted by IBM. With a noticeable shift towards embracing AI technologies, companies anticipate increasing their AI-related spending by 52% over the next year, focusing on areas beyond traditional IT operations.
The findings from the IBM survey underscore a broader trend where, by 2025, businesses expect to allocate an average of 3.32% of their revenue to AI initiatives, which would equate to approximately $33.2 million annually for a firm with a revenue of $1 billion. This expansion in investment is expected to impact various functions within organisations, including customer service, supply chain management, talent acquisition, and marketing. This shift indicates AI’s rising importance across diverse areas of enterprise operations.
Dee Waddell, Global Industry Leader for Consumer, Travel & Transportation Industries at IBM, commented, “AI is no longer just a tool; it’s a strategic imperative. 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.”
The survey further reveals that a substantial majority of executives (81%) and their teams (96%) are currently leveraging AI in some capacity. Plans are in place for these businesses to expand AI’s role in integrated business planning by 82% by 2025. The imminent increase in AI usage is projected to lead to a fundamental transformation in the skills required from the workforce. Within a year, 31% of employees will need to acquire new skills to effectively collaborate with AI, and this figure is expected to rise to 45% over the next three years.
Particularly noteworthy is the projected growth in AI utilisation within customer service, with an anticipated increase of 236% in personalised interactions over the next year. Notably, 55% of these improvements are expected to involve collaborations between humans and AI, highlighting the necessity of upskilling employees rather than fully automating existing tasks.
In conjunction with these advancements, the survey indicates a strong push towards investing in platforms that facilitate the seamless exchange of data and AI models. The utilisation of such platforms is expected to surge from the current 52% to 89% within three years. These systems are designed to enable businesses to integrate AI with their partners across various sectors, thus speeding up innovation processes.
Despite a staggering 87% of executives asserting that they have established clear AI governance frameworks, there exists a concerning gap in implementation. Less than a quarter of these executives have fully enacted and consistently updated tools to manage associated risks, which include issues surrounding bias, transparency, and security. This highlights an area of growth that organisations may need to address as they continue to integrate AI technologies into their business practices.
Source: Noah Wire Services
- https://newsroom.ibm.com/2025-01-07-ibm-study-ai-spending-expected-to-surge-52-beyond-it-budgets-as-retail-brands-embrace-enterprise-wide-innovation – Corroborates the anticipated 52% increase in AI-related spending and the allocation of 3.32% of revenue to AI initiatives by 2025.
- https://newsroom.ibm.com/2025-01-07-ibm-study-ai-spending-expected-to-surge-52-beyond-it-budgets-as-retail-brands-embrace-enterprise-wide-innovation – Supports the expansion of AI investment into areas such as customer service, supply chain management, talent acquisition, and marketing.
- https://newsroom.ibm.com/2025-01-07-ibm-study-ai-spending-expected-to-surge-52-beyond-it-budgets-as-retail-brands-embrace-enterprise-wide-innovation – Confirms that 81% of executives and 96% of their teams are currently using AI and plans for expanding AI’s role in integrated business planning.
- https://newsroom.ibm.com/2025-01-07-ibm-study-ai-spending-expected-to-surge-52-beyond-it-budgets-as-retail-brands-embrace-enterprise-wide-innovation – Highlights the projected growth in AI utilization within customer service and the need for employees to acquire new skills to collaborate with AI.
- https://newsroom.ibm.com/2025-01-07-ibm-study-ai-spending-expected-to-surge-52-beyond-it-budgets-as-retail-brands-embrace-enterprise-wide-innovation – Supports the anticipated increase in personalized interactions involving human-AI collaborations and the upskilling of employees.
- https://newsroom.ibm.com/2025-01-07-ibm-study-ai-spending-expected-to-surge-52-beyond-it-budgets-as-retail-brands-embrace-enterprise-wide-innovation – Corroborates the surge in the utilization of platforms for seamless data and AI model exchange from 52% to 89% within three years.
- https://newsroom.ibm.com/2025-01-07-ibm-study-ai-spending-expected-to-surge-52-beyond-it-budgets-as-retail-brands-embrace-enterprise-wide-innovation – Highlights the gap in AI governance framework implementation despite 87% of executives asserting they have established clear frameworks.
- https://newsroom.ibm.com/2024-01-08-IBM-Study-Widespread-Discontent-in-Retail-Experiences,-Consumers-Signal-Interest-in-AI-Driven-Shopping-Amid-Economic-Strain – Provides context on consumer dissatisfaction with current retail experiences and their interest in AI-driven shopping, aligning with the broader trend of AI adoption.
- https://mea.newsroom.ibm.com/IBM-Studies-AI-Adoption-Index-2023-Consumer-Study – Supports the growing interest in AI among consumers and the necessity for retailers to innovate and integrate AI technologies.
- https://newsroom.ibm.com/2025-01-07-ibm-study-ai-spending-expected-to-surge-52-beyond-it-budgets-as-retail-brands-embrace-enterprise-wide-innovation – Reiterates the strategic importance of AI as stated by Dee Waddell, emphasizing AI as a strategic imperative for retail and consumer product companies.
- https://newsroom.ibm.com/2025-01-07-ibm-study-ai-spending-expected-to-surge-52-beyond-it-budgets-as-retail-brands-embrace-enterprise-wide-innovation – Details the expected transformation in workforce skills required to effectively collaborate with AI, with 31% needing new skills within a year and 45% over three years.
