UK retailers boost AI leadership for resilience amid tough market

New research from monday.com has found that 61% of UK retailers have established dedicated artificial intelligence (AI) leadership or teams, reflecting an industry-wide effort to leverage AI in response to continued pressure on the retail sector.

The study reports that virtually all UK retail decision-makers (99%) believe their business possesses some form of AI expertise, with 88% stating that AI is helping them compete with major international retail corporations.

AI as core infrastructure

Retailers have increasingly positioned AI as a core part of their business operations, with many naming senior AI leaders, such as Chief AI Officers, to drive strategy. The emphasis on AI comes at a time when retail sales in the UK have fallen for ten consecutive months, leading many businesses to seek out new tools for resilience and competitiveness.

According to monday.com's data, 90% of UK retail leaders are actively exploring the use of AI agents, with a third already moving to the implementation phase. This focus on AI comes as retailers face heightened customer expectations and rapid market changes.

Balance between automation and human control

Despite the widespread embrace of AI, the sector remains cautious about full autonomy. The survey indicates that 92% of UK retail decision-makers do not allow AI systems to make key business decisions without human oversight. In many cases, AI's role is to provide insights: 36% of respondents said AI generates information, but humans are responsible for making the final decisions.

Similarly, retailers are wary of handing over the entire customer journey to AI. Forty-nine percent do not believe AI is ready to manage customer interactions fully from end to end, suggesting a careful approach to customer-facing technology.

Current AI deployment

AI agents are now present across various retail functions. Of those surveyed, 55% use AI agents for customer service, such as chatbots, while 49% use them to improve operational efficiency. In addition, 48% deploy AI for marketing and content creation.

Looking forward, 51% expect AI agents to handle the majority of customer interactions within the next five years. Despite this outlook, significant challenges remain. Concerns about the quality and consistency of AI output were cited by 54% of respondents, while 45% highlighted privacy issues, especially in the growing area of social commerce.

Integration remains an obstacle, with 44% saying compatibility with current systems is a challenge. There are also reputational risks to consider: 42% are concerned that over-reliance on AI could distance customers from their brands. However, greater transparency is seen as a route to customer loyalty, with 57% agreeing consumers are more likely to be loyal to brands that are open about their use of AI agents.

Barriers to implementation

Despite the momentum, integrating AI into retail operations is not without difficulties. Almost all UK retail leaders surveyed (97%) reported at least one obstacle when adopting AI tools. Cost was cited as the leading barrier by 45% of respondents, followed by employee resistance to change at 40%.

Nevertheless, the study found substantial perceived benefits. Seventy-four percent believe AI will help deliver more personalised in-store and online experiences by providing tailored recommendations. Seventy-three percent say generative AI and chatbots now handle the majority of basic customer requests, allowing online staff to focus on more complex service. Additionally, 72% believe AI will increase supply chain transparency and improve resource allocation.

Industry response

Ben Barnett, Regional VP for UKI at monday.com, said, "AI is no longer a future investment for UK retailers - it's something they're using right now to stay competitive in a high-pressure sector. What stands out in this data is how national and regional brands are being thoughtful - not just piling on new tools, but using AI to streamline what already exists and support the people doing the work."

"At monday.com, we see that every day - the most successful teams aren't using the most tech, they're using it in the clearest, most integrated way. AI works best when it's embedded into the systems teams already use - when it reduces friction, rather than creating more."

The report was based on a survey conducted with 500 UK retail leaders, including business owners, directors, and C-suite executives across multiple sectors such as fashion, food and beverage, electronics, luxury, health, and general merchandise. The research also covered leaders in the US, Australia, New Zealand, and Singapore.