European retailers are embracing AI

Artificial intelligence (AI) is seen as a key technology for the future of European retail. However, a recent study by London-based market research firm Retail Economics and Swedish technology provider Voyad revealed a significant gap between strategic ambition and actual implementation in this area.

The report “The State of AI in Retail Marketing and E-Commerce in Europe” highlights that the industry is in transition. Although early progress is evident, structural challenges continue to hinder development.

“The next two years will be a turning point as AI moves from experimentation to competitive necessity,” said Richard Lim, CEO of Retail Economics. “Retailers are on a journey. Most retailers have started testing and implementing AI, but only a few have reached the stage of achieving consistent commercial benefits.”

Differences in how AI is used

The importance of AI is no longer in question in most companies. There is consensus that data-driven technology is critical to future competitiveness, efficiency, and customer satisfaction. However, this study shows that there is wide variation in levels of maturity. While some pioneers have already deeply integrated AI into their processes, most companies are still in the experimental phase, testing individual use cases.

The use of AI is particularly widespread in marketing and e-commerce, with a visible direct impact on revenue and customer loyalty. Key applications include personalized product recommendations, automated campaign management, and analyzing databases of customer behavior. AI is also increasingly being used for pricing and demand forecasting. In these areas, companies report measurable improvements such as higher conversion rates and more efficient use of marketing budgets.

Hurdles to introducing AI

The study also identifies key barriers to broader scaling. Data infrastructure issues are the biggest concern. Many companies struggle with incomplete, poorly structured, or siled datasets that complicate the use of powerful AI models. Additionally, challenges such as internal resistance to AI and a lack of qualified experts slow the development and implementation of related solutions. Integrating new technology into existing IT systems is also often complex.

In Europe, regulatory requirements and data protection also play an important role and require further coordination.

AI as a pillar of strategy

This study focuses not only on technical issues but also on organizational aspects. Successful companies are primarily distinguished by their internal structure. We are strategically embedding AI at the leadership level, increasing collaboration between specialized departments and IT, and adopting agile ways of working. We’re also investing in targeted training to build the skills we need within our company. These factors have proven to be critical to sustainably scaling AI beyond testing.

Bottom line: Competition for the best AI solutions is heating up.

Looking to the future, this study clearly shows that the importance of AI in European retail will continue to grow. In particular, generative AI opens up new possibilities in areas such as automated content creation, customer service, and more precise offer personalization. Companies that adopt these technologies early and effectively may have a long-term competitive advantage.

Therefore, AI is no longer an option in European retail, but a necessity. The deciding factor is how quickly companies can overcome existing hurdles and develop scalable solutions from initial pilot projects. The race for data-driven business models has already begun.