Retail’s AI Future May Be Bigger and Slower Than You Think with EY and EY Studio+

For the last decade, retail has been preparing for digital transformation.

Now it may need to prepare for something much bigger.

That was the core theme running through my conversation with Malin Andrée, Global Retail Industry Leader at EY, and Steven Bailey, Americas Retail Leader at EY Studio+, live from World Retail Congress 2026 in Berlin.

Because according to EY’s latest future-of-retail research, AI is not simply introducing new tools into retail.

It has the potential to completely reshape how retailers operate, compete, and connect with customers over the next decade.

And depending on how the technology evolves, that future could look very different than most people expect.

Retail’s AI Future May Split Into Four Different Paths

One of the most interesting frameworks EY introduced during the conversation was the idea that AI could push retail into four entirely different scenarios.

Not forecasts.

Possibilities.

Because right now, the pace of technological change is moving faster than most organizations can realistically predict.

The first scenario is constraint.

In this future, AI adoption slows under the weight of regulation, cybersecurity concerns, fragmented systems, and organizational resistance.

AI still improves operational efficiency.
But it remains largely concentrated in backend functions.

Supply chain.
Process automation.
Operational support.

Not necessarily customer-facing transformation.

The second scenario is growth.

This is probably the version of the future most retailers are currently betting on.

AI scales rapidly across the retail value chain.
Agentic commerce becomes mainstream.
Retailers automate decisions faster and personalize experiences more effectively.

In this version of retail, AI becomes a significant competitive advantage.

Then comes transformation.

And this is where things start to fundamentally shift.

Retailers stop acting purely as merchants and begin acting more like ecosystem orchestrators.

AI enables entirely new business models.
Retailers monetize logistics capabilities.
Micro-entrepreneurs plug into retail networks.
Commerce becomes increasingly decentralized and AI-enabled.

And finally, there is collapse.

Not collapse of commerce itself.
But collapse through concentration.

A world where a handful of dominant technology platforms control the majority of AI infrastructure, agent ecosystems, and customer access.

In that version of the future, retailers become heavily dependent on a small number of gatekeepers.

And not everyone survives.

The Biggest AI Shift May Be Organizational, Not Technological

One of the strongest themes throughout the conversation was that AI is not just changing tools.

It is changing operational models.

Steven Bailey pushed back on the idea that retail will fully transform overnight, despite the constant hype cycle surrounding AI right now.

“The change will be immense. But not as fast or as scaled as the hype would suggest.”

That perspective felt important.

Because many retailers are currently caught between urgency and uncertainty.

They know AI matters.
But many still do not know where to focus first.

According to Steven, the retailers most likely to succeed long term are the ones investing early in foundational readiness.

Not just experimentation.

Data architecture.
Infrastructure.
Integration.
Organizational adaptability.

Those investments may not generate flashy headlines immediately.

But they create the conditions necessary to scale AI meaningfully later.

The First Major AI Use Cases Are Already Emerging

Even if full transformation takes time, some operational shifts are already happening quickly.

According to EY, the earliest AI impact areas are functions where decision velocity is high and data complexity is massive.

Three areas stood out.

Merchandising and Supply Chain

AI is already compressing planning cycles that historically took weeks or months.

Pricing adjustments.
Promotional planning.
Inventory management.
Supplier coordination.

Instead of operating through static planning windows, retailers are starting to move toward continuous optimization models powered by AI.

That shift alone could fundamentally reshape how retail organizations operate internally.

Personalization May Finally Become Real

Retail has spent years talking about personalization.

But according to Steven, AI may finally allow retailers to deliver it at meaningful scale.

Not just through marketing messages.

But through dynamic customer journeys, associate support, product recommendations, and real-time decision-making.

The biggest unlock is conversational interaction.

Customers are no longer limited to navigating static ecommerce interfaces.
They can increasingly communicate with retailers naturally through AI-powered experiences.

That creates a level of contextual understanding retailers have historically struggled to access.

And that changes what personalization can actually become.

Store Operations and Workforce Scheduling

One of the most practical examples discussed involved labor scheduling.

Retail managers often spend enormous amounts of time manually coordinating shifts every week.

AI dramatically compresses that process by analyzing variables like:

Weather
Traffic patterns
Events
Inventory levels
Employee availability
Customer demand

The result is not just automation.

It is smarter operational decision-making happening continuously.

Agentic Commerce Is Rising, But Human Experience Still Matters

One of the biggest tensions in the conversation centered around agentic commerce.

Because while AI agents are increasingly becoming capable of searching, recommending, and even purchasing on behalf of consumers, both Malin and Steven were careful not to frame that as the end of human-centered retail.

In fact, they argued the opposite.

As more transactional interactions become automated, the human side of retail may become even more important.

Discovery still matters.
Trust still matters.
Physical interaction still matters.

Consumers still want to explore products.
Touch materials.
Ask questions.
Interact with knowledgeable associates.

And according to Steven, AI may finally give store associates the contextual intelligence needed to create more meaningful customer experiences in real time.

That distinction feels important.

Because the future of retail may not be AI replacing people.

It may be AI-supported people becoming significantly more capable.

The Real Divide May Become Readiness

One of the clearest takeaways from this discussion is that the future winners in retail may not simply be the companies experimenting with AI first.

They may be the companies preparing best.

Because underneath every AI conversation sits a less glamorous reality:

Infrastructure matters.

Clean data matters.
System integration matters.
Organizational flexibility matters.

The retailers investing in those foundations today may have dramatically more strategic flexibility tomorrow no matter which AI scenario ultimately unfolds.

The retailers delaying those investments may find themselves increasingly constrained as AI ecosystems mature.