AI has transformed retail and consumer packaged goods (CPG) operations, enhancing customer analytics and segmentation, enhancing marketing and advertising personalization, and increasing the speed and accuracy of supply chain and logistics demand forecasting.
Companies are also raising the bar on customer engagement through intelligent digital shopping assistants and enriching catalogs by dynamically enriching and localizing product information. AI agents are increasing the speed and efficiency of operations, and physical AI systems are helping streamline and automate warehouse and supply chain operations.
NVIDIA's third annual State of AI in Retail and Consumer Packaged Goods research report received hundreds of responses, demonstrating the maturation of AI within the industry as companies move AI projects from pilot to production across all sectors.
Highlights of this year's report include:
- 91% of respondents said their organization is actively using or evaluating AI.
- 90% said they would build on the success of current projects by increasing their AI budget in 2026.
- 89% reported that AI helps increase annual revenue, and 95% said it helps reduce annual costs.
- 79% said open source models and software are moderately to very important to their AI strategy.
- 47% said they are using or evaluating agent AI in their operations.
See below for some of the report's key findings.
Open source opens up opportunities
Open source will soon become the foundation of many retail AI systems, giving teams the flexibility to adapt models to their data and use cases while maintaining strong governance. An open, interoperable ecosystem also makes it easy to incorporate AI into existing tools and workflows, allowing retailers to scale innovation quickly.
“Most retailers first started experimenting with AI using their own AI vendors,” said Jason Goldberg, chief commerce strategy officer at Publicis Groupe. “They had the model, but they didn't own the keys to their kingdom. Open source flips that script, allowing retailers to leverage their own data, avoid vendor lock-in, and benefit from the innovation of the open source community.”
AI has a huge impact on business
With 91% of respondents saying their companies are actively using or evaluating AI, the competitive question in retail and FMCG has shifted from whether to invest in AI to how to most effectively deploy and scale it.
Across industries, the impact of AI on business is measurable and significant. When asked how AI has improved their business, 54% cited improved employee productivity. 52% said AI helps improve operational efficiency. 41% reported improved customer service.
As mentioned earlier, 89% of respondents said AI helped increase revenue. For many companies, this increase has been significant, with 30% saying their revenue has increased by 10% or more. The same goes for AI's role in reducing annual costs, with 95% agreeing that AI reduces costs and 37% saying their costs have been reduced by 10% or more.
Chris Walton, co-CEO of OmniTalk, said, “Their focus should not be on frivolous projects that are being greenlit at the expense of high ROI benefits.” “Successful retailers will start with a boring use case that solves a specific P&L problem, prove value, and then scale.”
Nine out of 10 survey respondents say AI investments, including infrastructure, hiring of AI professionals, and software, will increase next year. Additionally, half of respondents said their budgets could see a significant increase, such as an increase of 10% or more compared to the previous year.
Agentic AI is making a big splash in the retail industry
The retail and CPG industries are piloting AI agents across a variety of industries.
Overall, 47% of survey respondents said they are using or evaluating agent AI, 20% said they already have an AI agent operating within their organization, and a further 21% said they plan to report an agent within the next year.
“The true disruptive impact of agent AI will first impact retail supply chains and operations, such as real-time inventory rebalancing, dynamic pricing, and autonomous agents handling vendor negotiations at scale, because that’s where the ROI can be measured,” Walton said.
Survey respondents identified three clear goals for agent AI in retail and consumer goods.
- 57% of respondents said their processes were faster and more efficient.
- Improved customer experience and personalization (per 40%).
- Improved decision making with real-time data (around 40%).
Broadly speaking, agent AI is distributed across three lines of business: internal operations, employee and customer support, and customer engagement. For example, in customer engagement, agents go beyond analytics and act on insights in real time to tailor messages, recommend products, and guide purchasing decisions based on the context of the individual customer.
AI brings resilience to supply chains
Retail and consumer goods have faced serious supply chain challenges over the past decade, and those challenges have become increasingly complex. In this year's survey, 64% of respondents reported that supply chain challenges have increased over the years, including geopolitical instability, workforce constraints, increasing consumer expectations for speed and transparency, and regulatory complexity across global operations.
“AI allows retailers to optimize inventory at the store and customer level, rather than at the regional level,” Goldberg said. “AI allows retailers to incorporate more factors into demand forecasting, allowing them to more accurately match supply and demand to more accurately forecast and avoid stockouts.”
Industries are turning to AI to streamline operations and solve complexity. 51% of respondents said their top-tier pressure valves use AI for supply chain operational efficiency and throughput. Meeting customer expectations came next at 45%, followed by resolving traceability and transparency in third place at 38%.
Physical AI is pervasive in the industry, with 17% of respondents using or evaluating this technology.
“The real transformation will come from AI, which makes existing physical infrastructure smarter,” Walton said. “My favorite example is in-store robots, which give you better pricing, better inventory, control, and better presentation quality.”
Early companies are demonstrating that when thoughtfully integrated, physical AI systems can do more than automate tasks, increasing flexibility and throughput in response to increased workforce pressures and logistics complexity.
For detailed results and insights, download the State of AI in Retail and Consumer Goods: Trends in 2026 report.
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