This report was prepared by EuroCommerce in collaboration with McKinsey & Company, combining industry expertise with analytical insights to explore the future of retail and wholesale in Europe. It reflects contributions from across the sector and draws on data-driven analysis to highlight the key trends shaping the industry.
The report aims to support policymakers and stakeholders in understanding how the sector can continue to drive innovation, competitiveness, and resilience. It provides practical insights to help ensure a strong and well-functioning Single Market that enables retail and wholesale businesses to adapt and grow.
Artificial intelligence (AI) has moved rapidly from a future concept to a present reality in retail, transforming every stage of the value chain. From helping consumers discover and purchase products more easily to enabling smarter business decisions and more efficient logistics, AI is reshaping how the sector operates and delivers value. This transformation is unfolding in a context of intense global competition, where technological advances are accelerating and significant investments are flowing into AI, creating a dynamic environment in which retailers must adapt quickly to remain competitive.
AI development in retail can be understood across three key dimensions. Analytical AI continues to provide a strong foundation, improving core functions such as demand forecasting, pricing, and customer segmentation, ultimately enhancing product availability and relevance for consumers. Generative AI is driving productivity gains and enabling more personalized customer engagement, particularly in marketing and content creation. Looking ahead, agentic AI represents the next frontier, with systems increasingly able to act autonomously—supporting both businesses and consumers in decision-making and transactions, and paving the way for more seamless and efficient shopping experiences.
Despite strong momentum and growing investment, the impact of AI has been uneven. Many retailers face challenges in translating ambition into measurable results, revealing a gap between experimentation and large-scale implementation. As innovation cycles shorten, the urgency to move from pilot projects to enterprise-wide adoption increases. This report, prepared by EuroCommerce together with McKinsey, brings together policy expertise, market insights, and perspectives from industry leaders. It provides a practical view on how European retailers can navigate AI, scale its use effectively, and unlock its full potential for businesses and consumers alike.
Key takeaways
Ensuring adoption of AI is now essential
Retail has moved beyond the question of “Why AI?”. The focus has decisively shifted to how quickly companies can adopt and scale the technology. Those that fail to act risk falling behind in an increasingly competitive and fast-evolving market where innovation cycles are accelerating.
Agentic commerce could mark the next major shift
Agentic commerce has the potential to become the most significant structural change since the rise of online retail. While fully autonomous purchasing is still emerging, consumer behaviour is already evolving—61% of European consumers use AI tools today to discover and evaluate products, signalling a major shift in how purchasing decisions are made.
A €240–320 billion opportunity for European retail
AI represents one of the largest value opportunities for the sector in decades. End-to-end transformation could increase operating profits by 4 to 10 percentage points through a combination of revenue growth, margin improvement, and productivity gains. Beyond financial impact, AI also has the potential to significantly enhance both customer and employee experience.
The biggest gains lie in commercial functions – yet remain underfunded
The most impactful AI use cases are found in commercial domains such as contract negotiation, pricing, promotions, and assortment optimisation – particularly in softline retail categories like apparel, footwear, and beauty. However, only 15% of retailers currently prioritise investment in these high-value areas, leaving significant untapped potential.
Sustained investment will be critical
Retailers should prepare for continued investment in AI. Combined capital and operating expenditures typically range from 1.5% to 5% of revenue, depending on a company’s size, starting point, and level of ambition. Maintaining this investment over time will be key to unlocking long-term value and staying competitive.