Retailers make AI top priority amid cost pressures

Research published by Fluent Commerce shows retailers are making artificial intelligence their top long-term investment priority. The survey also found that most expect business growth despite cost and supply chain pressures.

Fluent Commerce's third annual Retail Resilience Survey found that 57% of retailers plan to make AI a key strategic priority over the next five years, ahead of all other long-term investment areas. Half of respondents said investment in new technologies more broadly is a major focus, pointing to a sector seeking greater efficiency while managing persistent operational strain.

The findings are based on a survey of 100 retail professionals. They suggest confidence has held up even as businesses face higher labour costs, disruption to product flows and pressure to keep up with new systems.

Seven in 10 retailers said they feel positive about the year ahead, while 80% expect business growth. Only 17% expect losses.

That optimism comes against a difficult cost backdrop. Increased staffing costs were named as the biggest pressure facing retailers in 2026, with 44% citing them as their top challenge following recent minimum wage increases.

Keeping up with new technologies such as AI was a close second, cited by 43% of respondents. Rising operating costs were named by 34%, while 30% pointed to ongoing supply chain issues.

For many retailers, technology is both the proposed solution and a growing source of pressure. While 57% said AI would be a key strategic priority over the next five years, 43% also said keeping pace with emerging technologies and AI is one of the biggest challenges facing their business today. A further 14% identified implementing AI specifically as their leading technology concern.

Other long-term priorities were less prominent. Expansion into new markets was cited by 29% of respondents, sustainability initiatives by 28%, and strengthening partnerships by 26%.

Supply chain strain

Supply chain disruption remains widespread across the sector. Seven in 10 retailers said they had experienced disruption over the past year, and 19% described it as severe.

The operational effects were clear in the responses. The most common consequences were higher costs linked to rerouting orders, cited by 35% of retailers, stock unavailable online for 31%, and the need to increase prices for 30%. One quarter said disruption had also contributed to customer order cancellations.

Retailers said they are trying to reduce that exposure through a range of operational measures. The most common were diversifying suppliers, improving forecasting and planning, and putting stronger risk management plans in place.

Rob Shaw, General Manager EMEA at Fluent Commerce, commented on the broader mood in the sector.

"It's heartening to see positivity in the retail sector after a tough few years.

"While the industry continues to face significant operational and economic pressures, businesses are increasingly investing in technology and operational agility to help them navigate uncertainty and continue to grow despite outside challenges. These results suggest retailers are adapting to disruption."

Inventory picture

The survey also pointed to progress in inventory visibility, an issue that has become more important as retailers try to balance fulfilment speed, stock accuracy and customer expectations across stores and online channels.

More than two fifths of respondents, or 41%, said they now have real-time inventory visibility across their supply chain, up from 28% in the previous year's survey.

Even so, the data suggests the problem is far from solved. Half of respondents said poor inventory visibility still creates operational difficulties, and 14% described those difficulties as significant.

Customer experience is adding another layer of pressure. Nearly one third of retailers, or 32%, said delivering a customer experience across channels is one of the biggest challenges facing their business.

Fluent Commerce linked that challenge to the need for more accurate stock information and smoother fulfilment processes, particularly as shoppers expect faster and more predictable delivery.

Shaw said the survey shows how closely customer experience now depends on inventory data.

"Customer expectations around fulfilment speed, availability and convenience continue to rise.

"Retailers that can access accurate, real-time inventory data across their operations will be in a much stronger position to respond quickly, improve fulfilment performance and deliver more consistent customer experiences."