What Senior Decision Makers Reveal About CX, EX, AI and Digital Transformation in the Retail Sector

ABOUT THE RESEARCH

Customer experience, employee experience, and digital transformation are closely connected. The tools employees use, the information they have, and the technology supporting them all shape the experience customers receive.

To understand how organisations are approaching these priorities, we surveyed senior decision makers across the Retail Sector responsible for CX, EX, AI, and digital transformation. They shared how their organisations prioritise experience, where the biggest challenges lie, and how technology and data support improvement.

The results highlight different approaches to experience, alongside common barriers such as budget pressure, system complexity, and organisational alignment. This report summarises the findings and explores what they mean for leaders working to improve experience across their organisations.

1 AI Focus Expands Beyond Customer Experience

We asked: Which areas of communications, if any, is your organisation currently exploring the application of AI in?

Retail organisations are taking a balanced approach to AI, increasingly applying it across both customer and employee experiences rather than focusing on one in isolation.

• 37% are exploring the application of AI in CX only

• 20% are exploring the application of AI in EX only

• 40% are exploring the application of AI in both CX and EX

• 2% are not exploring the application of AI in either of these areas

This shows a clear shift toward joined-up thinking, where employee experience is recognised as critical to delivering better customer outcomes.

What this means for you

Retail leaders should prioritise connected CX and EX strategies. AI investments that empower frontline teams as well as customers will deliver more consistent, scalable experience improvements and create a stronger competitive edge. 

2 AI Moves From Experimentation To Action

We asked: What, if anything, best describes your organisation's intent for using AI in communications in this area(s)?

Retailers are moving beyond exploration, with most organisations focused on tangible outcomes and measurable improvements rather than experimentation alone.

• 36% want to drive measurable improvement

• 27% are looking to solve specific challenges

• 21% are reshaping experience delivery

• 16% are in an exploration phase

This signals a maturing market where AI is increasingly tied to business performance rather than innovation for its own sake.

What this means for you

The opportunity lies in outcome-led AI strategies. Retail leaders should anchor AI initiatives to clear KPIs—such as conversion, service speed, or satisfaction—to move from pilots to scalable business impact.

3 Speed And Personalisation Lead AI Value

We asked: What type of value, if any, does your organisation most expect AI to deliver

Retailers expect AI to enhance both efficiency and experience, with speed and personalisation emerging as the most important value drivers.

• Improved speed and responsiveness: 25%

• Personalisation: 22%

• Cost efficiency: 21%

• Service consistency: 17%

• Competitive differentiation: 14%

This highlights a dual focus on operational efficiency and customer relevance in increasingly competitive markets.

What this means for you

Winning retailers will use AI to deliver faster, more relevant interactions at scale. The real value lies in combining efficiency gains with experience improvements—not treating them as separate objectives.

4 Customers Expected to Embrace AI

We asked: How positively or negatively do you believe customers will perceive AI-enabled interactions?

Retailers are overwhelmingly confident that customers will respond positively to AI-driven interactions, with minimal concern about negative sentiment.

• Net Positive: 83%, including 50% responding ‘very positive’

• Net Negative: 5%

• Neutral: 13%

This reflects growing consumer familiarity with AI and acceptance of automation in everyday interactions.

What this means for you

Customer acceptance is no longer the barrier. The focus should shift to execution quality—ensuring AI interactions feel seamless, helpful, and on-brand to maintain trust and loyalty.

5 No Single Model For AI Service

We asked: What, if anything, best reflects your organisation's most preferred service model for AI?

Retailers are split across multiple AI service models, reflecting uncertainty and flexibility in how AI should be deployed.

• 23% want AI to support people

• 23% see AI as the primary interface

• 22% prefer AI to be behind-the-scenes

• 13% are creating AI-led service models, with escalation

• 16% retain a human-only service model

This diversity shows there is no dominant approach yet, with organisations experimenting across models.

What this means for you

Rather than committing to one model, retailers should explore flexible service architectures, testing how a blend of AI and human interaction—based on context and complexity—can deliver the best customer and employee outcomes.

6 Confidence High in Delivering AI Outcomes

We asked: How confident or not confident are you that your organisation can turn AI ambition into practical outcomes?

Retailers are highly confident in their ability to operationalise AI, with strong belief in execution capabilities.

• Confident (net): 86% including 43% responding ‘very confident’

• Neutral: 10%

• Not confident: 4%

This suggests organisations believe they have the skills, tools, and direction needed to move forward.

What this means for you

Confidence must now translate into delivery. Retail leaders should focus on governance, integration, and change management to ensure ambition converts into measurable, real-world outcomes.

7 Data And Systems Hold Retail Back

We asked: To what extent, if at all, are the following limiting what you can do with AI today in terms of ambitions and communications?

Retailers identify data quality and legacy systems as major barriers to AI progress, limiting their ability to scale initiatives effectively.

• 77%: Data availability and quality

• 76% Existing communication and experience systems

These foundational challenges continue to slow down AI adoption despite strong intent.

What this means for you

AI success depends on strong foundations. Retail leaders should prioritise data quality, integration, and modernisation to unlock the full value of AI investments and avoid stalled initiatives.

8 Change Seen as Major Challenge

We asked: How challenging or not challenging do you expect organisational and people change to be when introducing AI into the organisation?

Retailers expect organisational change to be a significant hurdle, with many anticipating disruption to people, processes, and ways of working.

• Extremely/very challenging: 49% combined

• Not challenging: 12%

This reflects the cultural and operational shifts required alongside technology adoption.

What this means for you

AI transformation is as much about people as technology. Strong leadership, communication, and training will be critical to drive adoption and minimise resistance across retail organisations.

9 Control Models Still Evolving

We asked: What, if anything, best reflects your organisation's view on control in AI-led interactions?

Retailers are divided on how much control AI should have, with no clear consensus emerging.

• Full automation acceptable: 29%

• Shared control: 28%

• Light oversight: 25%

• Human-led models: 18%

This indicates ongoing experimentation with governance and trust in AI systems.

What this means for you

Retail leaders should define clear control frameworks early. Balancing automation with human oversight will be essential to manage risk while still unlocking efficiency and scalability.

10 Risk Awareness Remains High

We asked: How sensitive, if at all, is your organisation to AI-related risks in communications (e.g. trust, compliance, employee impact)?

Retail organisations show strong awareness of AI-related risks, particularly around trust and compliance.

• Sensitive (net): 86%

• Highly sensitive: 36%

• Moderately sensitive: 33%

This demonstrates that risk management is a central consideration in AI adoption.

What this means for you

Trust will define success. Retailers must embed governance, transparency, and compliance into AI strategies to protect brand reputation and ensure long-term customer confidence.

11 Significant Investment Underway

We asked: To what extent, if at all, is your organisation investing/planning to invest in AI?

Retailers are already investing in AI, with 96% reporting budgets already committed, and planned for the future.

What this means for you

AI is now a board-level investment priority. Retail leaders should ensure spend is aligned to strategic outcomes, avoiding fragmented initiatives and focusing on scalable, high-impact use cases.

12 Impact Expected Within Three Years

We asked: When, if at all, do you anticipate seeing impact from AI investment in your organisation?

Retailers expect AI to deliver results in the medium term, with most anticipating impact within two to four years.

• 1–2 years: 42%

• 3–4 years: 54%

• Mean time to impact: ~31 months

This reflects realistic expectations around transformation timelines.

What this means for you

AI is a medium-term transformation, not a quick fix. Retail leaders should balance short-term wins with long-term capability building to sustain momentum and demonstrate ongoing value.

From Momentum to Meaningful Transformation

Retail’s AI journey is accelerating, with strong confidence, rising investment, and growing customer acceptance. Yet many organisations are still constrained by fragmented systems, poor data, and the challenge of embedding AI into everyday operations.

The priority now is execution. Retailers should focus on strengthening data foundations, targeting measurable use cases, and integrating AI into both customer and employee experiences.

This is also a people-led transformation. Success depends on bringing teams with you and aligning around clear outcomes.

NFON can help bridge the gap between ambition and delivery—ensuring AI drives real, measurable impact.

If you’d like to explore what these findings mean for your organisation, get in touch with the NFON UK team at hello-uk@nfon.com, or call 0330 383 8000.

Let’s start the conversation.