What: A comprehensive survey of 350 retailers reveals a significant gap between current merchandising practices and future requirements, with AI adoption being crucial for transformation.

Why it is important: The research demonstrates that successful merchandising transformation requires a balanced approach between technology adoption (30%) and people/process changes (70%), making it essential for retail survival.

The future of retail merchandising stands at a critical crossroads, as revealed by a comprehensive survey of 350 retailers. The research identifies a significant transformation in the merchant's role, moving towards an elevated and empowered category leadership position. Currently, merchants spend 40% of their time on tasks that could be automated, presenting a substantial opportunity for efficiency gains. The survey highlights that while 59% of respondents expect strategy and analytics to become centralised, the gap between current capabilities and future requirements remains substantial. This disparity is particularly evident in data management, where merchants estimate that one-third of their data contains errors, and 40% of available technology goes unused. The transformation challenges extend beyond technical aspects, with 35% of merchants receiving no training on advanced analytics tools and 53% facing innovation barriers. The study emphasises that while AI and technology are crucial enablers, the ultimate success of this transformation will depend primarily on people and operating model changes, requiring significant investment in upskilling and change management.

IADS Notes: Recent market developments strongly validate the survey's findings. As of March 2025, research shows that 87% of early AI adopters experienced revenue increases of 6% or more , while leading retailers achieved 4.5% annual productivity growth through AI integration . However, implementation challenges persist, with only 10% of retailers successfully scaling their AI applications . Success stories like Intime Department Store's 15% boost in counter sales through AI implementation  and Klarna's reduction of customer resolution times from 11 to 2 minutes  demonstrate the potential when technology and organisational change are effectively combined. The transformation's urgency is underscored by McKinsey's February 2025 report showing that 71% of consumers now expect personalised interactions , making this shift essential for retail survival.

What 350 retailers say about the future of merchandising