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Australian and New Zealand (ANZ) retailers are making limited progress in deploying AI at scale, risking being left behind in a market rapidly shifting toward intelligent, experience-led retail. The findings, from a Tata Consultancy Services (TCS) report, suggests a fundamental paradigm shift is urgently needed for local businesses to remain competitive.
The 2026 Global Retail Outlook reveals ANZ retailers are planning to leverage AI in the next 12 to 18 months, focusing on profitable growth, cost-efficiencies, and enhanced customer experiences.
While AI is moving from hype to practical use in the region, with chatbots, demand forecasting, and hyper-personalisation leading the way, the study reveals that advanced AI capabilities remain largely untapped in ANZ, more so than in other global regions.
“In the ANZ market, retailers face a complex landscape of high labour costs, economic pressures, and an increasingly saturated loyalty program environment,” said Krishnan Ramanujam, President – Consumer Business Group, TCS.
“While they are actively pursuing AI’s transformative potential, simply focusing on foundational efficiencies won’t be enough. The key to unlocking its full strategic power lies in fostering essential skillsets and leveraging AI for truly adaptive decision-making that rivals global leaders.”
Advanced AI adoption lagging. Only 17% of ANZ retailers are piloting or implementing AI for independent decision-making (vs 24% globally for autonomous decision-making). A mere 5% of ANZ retailers are engaging with multi-agent AI systems.
Foundational capabilities take precedence over advanced AI. Cost reduction through process optimisation (1st) and faster time-to-market (2nd) are top priorities for ANZ retailers. Globally, advanced AI capabilities like real-time market sensing and adaptive AI decision-making rank higher.
Workforce skills gap is the top challenge. Difficulty finding employees with technical and digital skills is the top expected challenge for ANZ retailers. This is more prominent than the global trend, where financial pressures often outweigh skills gaps.
Loyalty insights remain underutilised. 21% of ANZ respondents find loyalty insights underutilised in broader decision making. Only 45% use them for pricing/promotions, 41% for channel experience, and 37% for product planning, aligning closely with global figures.
Chatbots and virtual assistants lead AI initiatives. 41% of ANZ executives prioritise AI-powered chatbots and virtual assistants, consistent with global trends where they are often the leading AI initiative (51% globally).
The study underscores the critical need for ANZ retailers to evolve. TCS’s vision for this future, known as “perceptive retail,” integrates AI, machine learning, and multi-agent systems to help retailers interpret signals, adapt operations in real time, and orchestrate decisions across the value chain.
Focused on measurable value creation, TCS partners with retailers globally, including a strong focus on ANZ, to accelerate growth, improve profitability, and build the capabilities needed for the AI-powered future.
TCS’ commitment to building AI ready retail capabilities in ANZ is reflected in the partnership with Woolworths Group. Woolworths named TCS its 2025 Partner of the Year in recognition of TCS’ role in transforming data capabilities, including establishing the foundations of a common data platform on Google Cloud.
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