What: RSR's 2025 benchmark report reveals universal retailer commitment to AI-enabled merchandise planning, with all 111 surveyed retailers planning AI initiatives despite only 32% currently keeping pace with customer behavior.

Why it is important: The universal recognition of AI's necessity in merchandise planning marks a critical turning point, as retailers seek to address the 4.5% loss in gross sales due to traditional merchandising inefficiencies.

The retail industry stands at a pivotal moment in its technological evolution, with artificial intelligence emerging as a critical tool for merchandise planning and management. The RSR benchmark study reveals that every surveyed retailer plans to investigate or implement AI-enabled solutions within the next year, marking an unprecedented industry consensus. Despite this enthusiasm, only 32% of retailers currently report confidence in their ability to keep pace with customer behavior, highlighting the urgent need for transformation. The study identifies significant operational challenges, including inventory imbalances across stores and products, with retailers struggling to achieve effective localisation strategies. However, retailers are increasingly turning to AI-powered solutions to address these issues, particularly in demand forecasting, buy optimisation, and allocation planning. The research emphasises that while AI presents transformative potential, success requires careful strategic execution and a balance between technological innovation and practical implementation. The findings also highlight the critical need to move beyond traditional Excel-based planning systems toward more sophisticated, data-driven approaches. This transition, while challenging, is seen as essential for maintaining competitiveness in an increasingly dynamic retail environment.

IADS Notes: The RSR report's findings about AI's transformative impact on retail merchandising are strongly validated by market developments throughout 2024-2025. While the report highlights that every surveyed retailer plans to investigate AI solutions, March 2025 data shows this enthusiasm is well-founded, with 87% of early adopters experiencing revenue increases of 6% or more. The report's emphasis on inventory challenges aligns with real-world solutions, as demonstrated by Walmart's processing of 850 million product data points in June 2024, leading to significant operational improvements. The study's focus on data-driven decision-making is particularly timely, as March 2025 research shows leading retailers achieving 4.5% annual productivity growth through AI integration, compared to the industry's previous decade-long 0.3% rate. Customer experience concerns highlighted in the report are reflected in January 2025 findings that 73% of consumers feel overwhelmed by traditional shopping experiences, while February 2025 data shows 38% of consumers already actively using AI shopping tools with 80% reporting positive experiences. However, the report's caution about implementation challenges is warranted, as February 2025 research reveals only 10% of retailers have successfully scaled their AI applications, suggesting that while the potential is clear, careful strategic execution remains crucial.

The case for AI-enabled merchandise planning in 2025