Retailers lag on AI as leaders widen performance gap

SOFIAH NICHOLE SALIVIO

News Editor

Anaplan, Incisiv and World Retail Congress have released a global study on retail resilience and AI adoption, highlighting a clear performance gap between faster-moving retailers and the wider sector.

The study surveyed 298 merchandise planning and supply chain executives across North America and EMEA. It found that leading retailers achieve average full-price sell-through of 71%, compared with an industry average of 57%, with faster responses to demand signals setting stronger performers apart.

Many retailers also believe slow decision-making is costing them sales. Two-thirds of respondents said they lose 3% or more of annual sales because they cannot react quickly enough to shifts in demand, while one-third estimated losses above 6%.

For a retailer with annual revenue of USD $1 billion, that would amount to more than USD $60 million in lost sales. The report linked those losses to long planning cycles: 69% of organisations rebalance inventory monthly or less often, and 78% adjust upstream supply quarterly or more slowly, despite having access to real-time demand signals.

“Our research shows that the organisations pulling ahead have restructured accountability and given systems the authority to act. The performance gap between them and the rest of the industry is now measurable in full-price revenue – and it is growing,” said Gaurav Pant, Chief Insights Officer at Incisiv.

AI readiness

The research also highlights a gap between interest in AI and its use in day-to-day retail planning. More than 85% of executives rated AI as critical across retail functions, yet deployment remained much lower.

Only 31% of respondents had deployed AI in demand forecasting, while just 13% had introduced it in exception management, where faster decision-making can have a direct operational impact. The report described this as a 60-percentage-point gap between perceived importance and adoption.

Workforce preparation emerged as another weak point. Executives said more than half of supply chain and merchandise planning roles would require materially different skills by 2030, but only 11% of teams have received any AI training so far.

The study warned that poor preparation could create two problems inside organisations: staff may reject AI outputs because they do not trust them, or accept them without enough judgement to recognise when the system is wrong.

“This research makes clear that the competitive divide in global retail is no longer about who has the best forecast. It is about who can turn insight into action fastest – and that requires a fundamentally different operating model,” said Ian McGarrigle, Chairman of World Retail Congress.

Leaders pull ahead

The report grouped respondents by operational maturity and identified a top 10% tier as leaders. These retailers were more likely to update plans quickly, align teams around common incentives and embed AI more directly in decision-making.

Among that group, 90% refresh demand forecasts weekly or in real time. By contrast, around two-thirds of the wider industry still operate on monthly or quarterly forecasting cycles.

The same pattern appeared in organisational design. According to the survey, 24% of leaders had unified cross-functional incentives, five times the industry average.

AI use in decision-making also differed sharply. The study found that 76% of leaders operate at system-recommended or autonomous AI decision levels, while none rely on fully manual processes.

This suggests the gap is not simply about access to software, but about how companies organise decisions and act on information. The findings indicate that retailers that can shorten planning cycles and connect insight to execution are better placed to protect margins and reduce lost sales.

“The retailers in this study who are winning have moved from just looking at data to acting on it. They are turning analytical noise into precise action by using AI-driven tools that bring purpose-built functionality and deep expertise into their core planning workflows. This connection between insight and execution is what enables them to make informed, confident decisions at the moment they matter, and it’s what truly separates the leaders from the rest,” said EJ Tavella, EVP and GM of Integrated Business Applications at Anaplan.

Respondents represented businesses with annual revenue ranging from USD $250 million to more than USD $5 billion. More than half were based in North America, with the remainder in EMEA. The study assessed supply chain maturity through a 15-question index covering cross-functional integration, responsiveness, technology and AI infrastructure, and organisational adaptability.