Retailers plan to invest deeper in AI, cybersecurity this year

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Dive Brief:

More than half (52%) of retailers are pouring $50 million or more into digital technology annually, according to KPMG’s recent survey of 250 retail executives across sectors. That includes 28% who are allocating between $100 million and $250 million.
Nearly half (48%) of respondents said the cost of technical debt, defined by IBM as the future costs stemming from shortcuts and flawed decisions during software development, prevents them from investing in other technologies. This is lower than the 63% average across industries.
The majority (86%) of respondents said their tech enhancements are “frequently improving business value.” Furthermore, most have realized between 31% and 40% of their total financial value from AI and other intelligence tech tools, per the report.

Dive Insight:
As AI tools proliferate throughout the retail industry, a narrative shift is underway, KPMG noted in its report. While retailers focused on digital transformation a few years ago, AI has become a ubiquitous tool to help companies gain a competitive edge and drive future growth, the report said.
Currently, 42% of the surveyed executives said their company is innovating and deploying AI use cases at scale, but 74% expect that to be the case in 12 months’ time. AI and automation, including generative AI and agentic AI, is also one of the top areas where retailers expect to increase their investment. Forty-two percent said they would do so, compared to 52% who will increase spending on cybersecurity and 49% who plan to boost investments in data and analytics.
While some retailers are diving headfirst into their AI integrations, others are balancing AI tools with human connection.
During the Shoptalk Spring 2026 event earlier this year, Denise Paulonis, CEO of Sally Beauty Holdings, noted that the beauty business remains reliant on a personal touch. “AI is not going to tell you does that color look good on you. It can give you an indication it will — but it won’t give you that final comfort zone that you’ll get from that human experience,” Paulonis said during the event.
At the same event, Amanda Bailey, vice president of customer marketing and loyalty at Lowe’s, described how customers’ product searches have evolved in the AI age, from keywords to search queries. “It’s no longer good enough just to serve up a product. You now have to meet them where they are, and you have to kind of take them through this whole journey, from dreaming to planning their project to doing the project to taking care of it after it’s done,” Bailey said during the event.
Expressing a similar sentiment, Kimberly Shenk, CEO of marketing technology firm Novi, noted during the CommerceNext Growth Show last month that shoppers are now discovering products through AI technologies like ChatGPT, Gemini and AI agents. As a result, retailers’ brand identities must be aligned across each gateway.
Nearly two-thirds (62%) of Gen Z and millennial respondents to an April survey by The Harris Poll and Quad said they prefer shopping with AI-powered tools, higher than consumers overall (51%). Another survey from ICSC and McKinsey & Company released in May found that 68% of shoppers had used at least one AI tool while shopping over the past three months.