Retailers across global markets continue to lag in deploying artificial intelligence (AI) at scale, despite viewing it as a critical enabler of future competitiveness, according to the TCS Global Retail Outlook 2026 released by Tata Consultancy Services (TCS).
The study, based on responses from more than 800 senior retail executives across 18 countries, found that most organisations remain at an early stage of AI adoption. While AI features prominently in retailers’ strategic priorities, progress beyond limited and experimental use cases has been slow. The findings show that 85% of retailers have not begun implementing, or are not even planning for, multi-agent AI systems, and only 24% currently use AI for autonomous decision-making.
The research indicates that AI adoption in retail remains largely superficial, with 51% of respondents identifying basic technologies such as chatbots and virtual assistants as their leading AI initiative. This suggests that AI usage is largely confined to isolated customer engagement platforms rather than being embedded across core business functions.
Beyond cost optimisation, AI-powered capabilities were ranked among the most essential priorities for retailers by 2026, particularly those enabling real-time sensing of market changes and competitor activity. Adaptive, AI-driven decision-making capabilities were ranked second and third respectively among the top 10 strategic capabilities identified by respondents. However, the report highlighted workforce skills gaps as a major constraint, ranking second only to financial pressures.
The survey also revealed that only 33% of retailers view digital literacy programmes as a pathway to organisational transformation and talent upskilling. In addition, just 37% use loyalty insights to inform channel or store experience strategies, while 45% apply such insights to pricing and promotions. AI-powered demand sensing for supply chain resilience is currently being deployed by 39% of retailers.
Krishnan Ramanujan, President of the Consumer Business Group at TCS, said retailers broadly agreed that AI would define the next phase of competitiveness, but most had only begun to explore its potential. He said the study showed that the real opportunity lay in moving from isolated AI initiatives to intelligence embedded across the entire value chain. He added that organisations that successfully made this transition would become more perceptive, capable of learning, adapting and responding in real time, and noted that TCS was developing AI-led solutions to address gaps across the retail value chain.
The report suggested that a broader paradigm shift was required as the sector moves towards intelligent, experience-led retail. TCS described its vision for this transformation as “Perceptive Retail™”, which integrates AI, machine learning and multi-agent systems to help retailers interpret signals, adapt operations dynamically and coordinate decisions across the value chain. The study forms part of TCS’s wider strategy to enable enterprise-level AI adoption among its clients.
Cheenttan Voraa, Global Head of Retail Consulting at TCS, said the retail sector had reached a critical juncture, with leaders recognising AI as essential for future competitiveness but remaining at an early stage in building true enterprise intelligence.
