AI innovation and omnichannel are critical to retail success in 2026

NEW YORK, January 12, 2026 — Kyndryl (NYSE: KD), a leading provider of mission-critical enterprise technology services, today released findings from its 2025 Retail Readiness Report. The report reveals how retailers are balancing ambitious AI and digital transformation initiatives with pressing operational challenges amid a $30 trillion global market where physical stores remain critical to success.

The retail industry report shows that while 48% of retail leaders have significantly upgraded their IT infrastructures and increased their AI investments by 33% in the past 12 months, nearly a quarter cite technical debt as a major constraint. With more than 80% of retail sales still occurring through brick-and-mortar stores, retailers are realizing that omnichannel success depends less on adding new capabilities and more on operational discipline and system unification.

"Retail is entering a critical era where every technology investment must prove its value,” said Rachel Calhoun, Global Vice President for Retail at Kyndryl. “Retailers have spent years layering new technology atop legacy systems, but this next year demands a shift from expansion to integration. Those that balance physical operations with digital intelligence, while deploying responsible agentic AI, will set the pace for the future.”

Key findings from the Retail Readiness Report:

• Back to basics will define competitive advantage in retail – The majority of sales remain in-store, so retailers are shifting focus to inventory precision, stock-keeping units rationalization, and store-level agility.
• Omnichannel systems need urgent integration – Only 15% of retail leaders believe they use their omnichannel systems to full potential, with the rest hampered by fragmented digital add-ons and manual workflows.
• Overcoming barriers to agentic AI adoption – While retail leaders have increased their AI investments, progress is blocked by data silos and organizational resistance. Success requires embedding AI frameworks that operate autonomously within clear governance structures.
• Technical debt threatens innovation – Nearly one-third of retail leaders report mission-critical networks, storage and servers are at end-of-service. Nearly half say innovation is delayed by foundational tech-stack issues.
• Retail industry workforce transformation is accelerating – 89% of retail leaders believe AI will completely transform retail industry job roles within the next 12 months, yet only 33% express concern about upskilling employees whose roles are affected by AI.

For more insights, view the full 2025 Retail Readiness Report.