The retail sector is poised for a technological transformation focused on solving persistent supply chain and fulfillment hurdles. According to a new survey from global technology intelligence firm ABI Research, an overwhelming majority of retailers are planning significant investments in advanced digital solutions and warehouse automation. The findings reveal a strategic shift towards intelligent systems, with more than 90% of retailers planning to deploy AI for decision support and network optimization to enhance operational resilience.
Over 90% of retailers plan to deploy AI for supply chain decision support and network optimization.
More than 40% strongly agree that agentic AI can automate tasks like inventory adjustment and shipment re-routing.
Retailers are increasing IT security spending, with over 35% budgeting above $50,000 for the next year.
Operational Technology (OT) security spending is also growing due to rising threats and regulations.
Data privacy and integration with legacy systems remain the top challenges for retail workflows.
These insights come from ABI Research's Supply Chain Survey 2025: Retail and Wholesale report.
The initial wave of Generative AI in retail, which focused on chatbots and customer support tools, is now evolving. Retailers are increasingly looking towards more autonomous systems. The survey indicates a significant move toward agentic AI applications, which can execute tasks independently.
"Gen AI applications have slowly been applied by retailers over the last year, with most exploring system support chatbots and customer-focused support tools. More eyes are turning towards agentic AI applications, and more than 40 percent of respondents strongly agree that AI agents can help automate decision-making for tasks such as adjusting inventory levels, re-routing shipments, and triggering automatic re-orders," said Ryan Wiggin, Senior Analyst at ABI Research.
Alongside software and automation, cybersecurity has become a critical budget item for retailers. The survey data shows that more than 35% of respondents plan to spend over US$50,000 on IT security within the next year. Furthermore, spending on Operational Technology (OT) security, which protects warehouse automation and physical systems, has demonstrated even stronger growth. This trend is driven by heightened awareness of cyber threats and an increasing number of regulatory mandates compelling businesses to bolster their defenses.
Despite the enthusiasm for new technology, retailers face significant internal challenges that could slow adoption. The complexity of modernizing existing infrastructure is a primary concern.
"Data privacy concerns and difficulty upgrading or integrating with legacy systems are seen as the biggest challenges to improving workflows in retail companies," said Wiggin. "Providers should ensure strong onboarding and ongoing support with a key focus on data management and security throughout."
For technology providers, this underscores the need to offer robust implementation and support services to ensure that these advanced AI and automation solutions can be integrated successfully and securely into retail operations, delivering on their promised value.
ABI Research is a global technology intelligence firm uniquely positioned at the intersection of technology solution providers and end-market companies. We serve as the bridge that seamlessly connects these two segments by providing exclusive research and expert guidance to drive successful technology implementations and deliver strategies proven to attract and retain customers.
TechIntelPro empowers B2B technology decision-makers with the latest industry trends, deep insights, leadership perspectives and actionable intelligence to drive both organizational and professional milestones—and thrive on the tech pulse.