IBM Study: AI Spending Expected to Surge 52% Beyond IT Budgets as Retail Brands Embrace Enterprise-Wide Innovation

• The report found that 81% of surveyed executives and 96% of their teams are already using AI to a moderate or significant extent 
• Executives indicate they want to expand into more sophisticated AI use cases, such as integrated business planning where they plan to increase usage by 82% in 2025

NEW YORK, Jan. 7, 2025 /CNW/ -- A new global study from the IBM (NYSE: IBM) Institute for Business Value found that surveyed retail and consumer product executives are dramatically shifting their focus toward artificial intelligence (AI), with responses indicating that participants project spending outside of traditional IT operations could surge by 52% in the next year. The report, titled "Embedding AI in Your Brand's DNA," reveals how brands are preparing for the next phase of AI-driven transformation across the enterprise.

By 2025, retail and consumer products companies surveyed say they plan to allocate an average of 3.32% of their revenue to AI—equivalent to $33.2 million annually for a $1 billion company. This investment is set to span functions such as customer service, supply chain operations, talent acquisition, and marketing innovation, highlighting AI's expansion beyond traditional IT applications. Key findings include:

• Rapid Adoption Across the Enterprise: The report found that 81% of surveyed executives and 96% of their team are already using AI to a moderate or significant extent. Executives indicate they want to expand AI usage to more sophisticated use cases, such as integrated business planning where they plan to increase usage by 82% in 2025.
• Workforce Transformation:  Executives surveyed expect that 31% of employees will need to learn new skills to work with AI in the next year, increasing to 45% within three years. AI use in customer service, particularly for personalized responses and follow-ups, could  grow by 236% in the next 12 months when compared to the prior year based on survey responses. Notably, responses indicate that 55% of these improvements are expected to involve human-AI collaboration, while only 30% would be fully automated—highlighting the need to equip employees for seamless AI integration.
• AI Ecosystem Platforms: Investment in ecosystem platforms—tools that facilitate exchange of data and AI models—could skyrocket. Respondents indicated they expect growth from 52% today to 89% within three years as their companies look to blend AI capabilities with business and technology partners to accelerate innovation and drive efficiencies.
• AI Governance Gap: Despite 87% of surveyed executives claiming to have clear AI governance frameworks, fewer than 25% have fully implemented and continuously review tools to manage risks like bias, transparency, and security. This reveals a critical gap in operational oversight.

"AI is no longer just a tool; it's a strategic imperative," said Dee Waddell, Global Industry Leader, Consumer, Travel & Transportation Industries at IBM. "Retail and consumer product companies are at a tipping point where embedding AI across their operations can help define not just productivity gains, but the future of brand relevance, engagement and trust."

The report emphasizes that successful brands can evolve from viewing AI as merely a productivity booster to positioning it as a core driver of enterprise innovation. Achieving this transformation will require rethinking traditional governance and reskilling strategies. Retailers should tailor AI initiatives to align with their brand priorities and collaborate with strategic partners, including start-ups and technology companies. Equally important is breaking down silos between finance, technology, and business leaders. By fostering cross-functional collaboration, these stakeholders can jointly build strong business cases that demonstrate how AI can help deliver a long-term competitive advantage.

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For more information and to access the full report, visit here.

Methodology

The IBM Institute for Business Value (IBM IBV), in cooperation with Oxford Economics, surveyed 1,500 global retail and consumer products executives in 15 countries in Q3 2024. 50% of the sample represented retail industry and 50% represented consumer products in nine countries in Q3 2024.

Participants were asked a range of questions in various formats (such as multiple choice numerical and Likert scale). They were asked about their organization's expectations, results, concerns, and barriers for scaling or planning to scaleAI/Gen AI within the enterprise and across their ecosystem partners.

To accomplish this, the IBM IBV ran a series of contrast analyses, including pairwise comparisons and data classification using hierarchical clustering highlighting results differences as shown in this report. Significance level for all analyses was set
at (p < 0.05) level.

About IBM

IBM is a leading provider of global hybrid cloud and AI, and consulting expertise. We help clients in more than 175 countries capitalize on insights from their data, streamline business processes, reduce costs and gain the competitive edge in their industries. More than 4,000 government and corporate entities in critical infrastructure areas such as financial services, telecommunications and healthcare rely on IBM's hybrid cloud platform and Red Hat OpenShift to affect their digital transformations quickly, efficiently and securely. IBM's breakthrough innovations in AI, quantum computing, industry-specific cloud solutions and consulting deliver open and flexible options to our clients. All of this is backed by IBM's long-standing commitment to trust, transparency, responsibility, inclusivity and service. Visit www.ibm.com for more information.

Media Contact:
Kelsey Lazio
Global External Relations Lead, Consumer and Retail, IBM
[email protected]

SOURCE IBM