Ideas lab
Agentic AI is already causing workforce disruption. Are today’s leaders ready?
Article
25-Nov-2025
Key takeaways
Complexity is stopping retail AI before it even starts. Real value only appears when retailers simplify products, processes and systems so agentic AI can actually do its job.
Training isn’t optional — it’s essential. Frontline employees can’t use AI confidently without clear workflows, redesign and leadership support.
AI systems must be integrated. Disconnected systems turn AI into an anchor, while integrated foundations turn it into a competitive advantage.
By Rick Olson, Consult Partner at Kyndryl
After years of chasing digital transformation goals and adapting to customer demands, retailers are left with a patchwork of disconnected systems, inaccessible data and overworked employees. The result: technical debt and operational fatigue. Employees feel frustrated and customers notice the gaps.
As retailers continue to infuse AI into their operations, simplicity will determine future success. We all work better when our lives are not chaotic, don’t we?
Meanwhile, investment in innovation continues to climb. On average, retail leaders report that they have increased their AI investments by 33% over the past year, according to the Kyndryl Readiness Report. Yet many struggle to see meaningful returns. Why? Because technology without simplicity slows everything down.
Now is the time for retailers to understand the extent of their tech debt. They must do three things: increase revenue, decrease expenses and enhance efficiency.
To help address some of these challenges, some forward-thinking retailers are turning hopefully to agentic AI — systems that can make decisions and act on them — for faster resolutions, sharper insights and newer ways to serve customers. To be sure, agentic AI promises many opportunities for retail leaders seeking to unlock innovation and simplicity. But it’s not a shortcut. Agentic AI's potential rests on a foundation of high-quality, reliable and well-managed data.
The retailers that will lead the next era are not the ones with the most apps or the flashiest technology. They will be the ones that focus on what has always mattered most: the basics. Those include having the right product on the right shelf at the right time, empowering associates to deliver great service, and establishing and maintaining operational discipline that enables strategic agility. Simplicity is the foundation for everything that comes next. It’s not easy, and it requires a strategic focus. But it's how retailers will thrive in an AI-driven market.
Fewer, better products
From the dawn of big-box stores to the rise of e-commerce, retailers have sought to offer a wide range of products to stay competitive. The thinking was simple: the more options on the shelves, the more likely customers would buy.
But too much choice often overwhelms customers. Today, retailers juggle more stock-keeping units (SKUs) than ever, while also fulfilling online and direct-to-consumer orders. Many can’t keep up. Customers often struggle to find what they want when they need it, and retailers fail to meet demand.
According to retail planning platform Relex Solutions, 52% of retailers cite consumer demand volatility as their biggest challenge, forcing them to constantly reset inventory strategy. This year, a major big-box retailer announced a sweeping inventory “rightsizing” after its sales dropped. Another cited inventory misalignment as contributing to its bankruptcy and closure.
Reducing SKU complexity and putting the right products in the right places at the right time will help unlock agentic AI’s full promise. Retailers that simplify will outperform those that sprawl.
Empowering employees
Simplifying products is just the start. Success depends on employees who trust and use technology confidently.
We expect the impact of AI on the global retail workforce to be immense. Some 89% of global retail leaders say AI is going to completely transform roles and responsibilities at their organizations over the next year. Yet, 44% worry that their teams are not prepared.
Training matters for both skills and confidence, as employees often feel overwhelmed by new technologies. AI can’t transform the retail environment if half the workforce isn’t using it. According to the Kyndryl Readiness Report, nearly 40% of technical retail employees and 57% of non-technical employees don’t use AI weekly — a clear signal that training and workflow redesign must come before scale. Tech giants like Amazon and Google have already launched AI training programs to accelerate readiness. Retailers should follow suit.
33%
of retail leaders say they have increased their AI investment by 33% over the last year.
Source: Kyndryl Readiness Report
57%
of non-technical retail employees and nearly 40% of technical employees don’t use AI weekly.
89%
of retail leaders report AI will completely transform roles and responsibilities at their organizations over the next year.
Simplicity leads to speed
Agentic AI’s promise lies in its ability to make decisions and take actions instantly. But stacked, disconnected systems slow everything down.
Among organizations not yet seeing positive returns from AI, 35% blame integration difficulties, according to the Kyndryl Readiness Report. The report also found that 31% of leaders believe IT complexity is a top barrier to scaling their operations.
AI integration isn’t optional — it’s the linchpin of value creation. Without it, even the most sophisticated technologies can become anchors, slowing decisions, stifling innovation and eroding competitive edge.
The way forward
01
Start with a clear view of your current state. Retailers should conduct comprehensive audits to identify integration and process workflow gaps. This will help them understand how their systems communicate, where data gets trapped, and which processes create the most friction. With this foundation, they can choose a modernization path — whether cloud, hybrid or a mix — that best addresses those gaps and positions their organizations to unlock the AI’s potential.
02
Simplify the product portfolio. Retailers can reclaim speed, accuracy, and customer loyalty by reducing SKU sprawl and complexity to focus on core categories. This will allow stores and fulfillment centers to operate with fewer errors and less waste. When SKU reduction is paired with the right IT architecture, it will help ensure that systems are streamlined, and will help create the agility needed for AI-driven automation.
03
Invest in employee training. With nearly half the workforce not using AI weekly, retailers must move beyond casual training and embrace more structured AI readiness programs. Redesigning workflows, building confidence, and giving employees a supportive environment to adopt new tools will determine whether AI scales effectively or stalls in pilot mode.
By returning to these fundamentals, retailers can take back control, restore confidence, and create the foundation for a more intelligent, resilient and customer-centered future.
Unlocking agentic AI’s potential begins with simplicity. Retailers that master it today will lead the agentic AI-powered future.
