AI does not create success – but it amplifies what is creating success: Resilience and Relevance

OC&C partners joined retail industry leaders at the 2026 K5 Future Retail Conference, to explore the forces shaping retail and how leaders can navigate an increasingly complex market environment.

While each challenge facing retailers would be significant on its own, it is the combination of prolonged economic pressure, changing routes to market, and rapid technological change that is fundamentally altering the rules of competition.

For retail leaders, three questions are urgent: where and how will we generate revenue tomorrow, what capabilities will we need to succeed, and what actions do we need to take today?

Retail profitability remains under pressure

After years of economic uncertainty, consumer demand across Europe remains subdued, while retailers continue to grapple with high and inflexible cost bases, the result of which is a mounting pressure on profitability. Across the sector, cost reduction programmes are becoming commonplace, yet many fail to deliver sustainable improvements when the underlying business model remains unchanged.

The lesson is not new, but today it needs to be reframed: given the massive operational efficiency levers of AI, you can not cut corners on innovation here. Furthermore, long-term success requires business model transformation alongside cost discipline.

The platform challenge continues to intensify

Alongside economic pressures, retailers face a second structural challenge in the growing dominance of large digital platforms.

Platforms increasingly combine superior customer preference with powerful operating advantages, including marketplace economics, retail media revenues, data scale and logistics capabilities. As a result, even category-leading digital and omni-channel industry champions can struggle to compete with global marketplaces.

Success increasingly depends on achieving two distinct but interconnected forms of relevance;

1. Brand relevance: winning in the customer’s mind

Brand relevance is built through trust, preference, recognition and emotional connection. It determines which retailers scores highest on customers sympathy.

2. Moment relevance: winning at the point of purchase

However, moment relevance is determined by a retailer’s ability to convert intent into action. Price competitiveness, product availability, visibility, convenience and fulfilment all play critical roles.

Unfortunately, the criteria for brand and moment relevance are not the same. Retailers that achieve only one of these dimensions risk becoming either invisible or interchangeable. Sustainable growth requires both. Understanding this difference is even more important in times of AI when concrete purchase decisions are prepared outside the retailer ecosystem with agents.

The most successful retailers today are those that combine strong brand equity with compelling performance in the moments that matter most to customers.

The fundamentals of retail success remain surprisingly familiar

Despite the excitement surrounding artificial intelligence, customer priorities remain remarkably analogue.

Our 2025 Retail Proposition Index, a consumer survey of over 4,000 German shoppers, shows that customers continue to reward retailers that deliver on a handful of core expectations:

• Competitive pricing and value
• Trust and reliability
• Strong product quality and selection
• Excellent service and expertise
• Alignment with evolving customer needs

Many of today’s fastest-growing retail businesses are winning not because they have radically reinvented retail, but because they execute these fundamentals exceptionally well.

Technology can amplify these strengths, but it cannot replace them.

AI is becoming a defining competitive capability

If platform dominance is reshaping customer access, AI is reshaping how retailers operate.

The vast majority of retail executives now view AI as a foundational capability for the future, but a significant gap still remains between ambition and readiness.

Many organisations recognise AI’s strategic importance, but relatively few have the talent, operating models and data foundations required to scale it successfully. This gap is becoming one of the sector’s most important competitive differentiators.

Where AI can create value today

The opportunities extend across both the customer journey and the operating model.

Driving productivity and efficiency

AI can unlock substantial productivity improvements across functions including:

• Marketing and content creation
• Category management and buying
• Customer service
• Software development
• Finance and reporting
• HR and training

For many retailers, the question is rapidly shifting from “Should we invest in AI?” to “Can we afford not to?”

Enhancing customer relevance

Leading retailers are already deploying AI to improve customer experiences and increase conversion.

Examples include:

• Conversational shopping assistants
• AI-powered product discovery
• Enhanced product content and data enrichment
• Personalised recommendations
• Loyalty and customer experience applications

These investments are both improving customer outcomes today, and laying foundations for the next evolution of digital commerce.

Preparing for the rise of agentic commerce

As AI agents increasingly influence product discovery and purchasing decisions, retailers will need to reconsider the role they play within the value chain.

Several future archetypes are beginning to emerge:

• Trusted destinations, built around category expertise and authority
• Beloved brand ecosystems, powered by deep customer relationships
• Commerce platforms, focused on infrastructure, fulfilment and scale
• Demand orchestrators, connecting customer intent with products and services

Retailers that fail to establish a distinctive role risk becoming increasingly invisible in an AI-mediated purchasing environment.

What should retail leaders do now?

The retail agenda can be distilled into two priorities: building resilience and strengthening relevance.

To achieve this, leaders should focus on:

Relevance

• Reassessing whether their business model will remain relevant in future customer journeys
• Strengthening both brand preference and purchase-moment performance
• Identifying how AI can enhance customer experiences and visibility

Resilience

• Building greater flexibility into operating models
• Capturing AI-driven productivity gains
• Investing in the data, technology and capabilities required for long-term transformation

Leadership

• Developing the organisational capabilities needed for an AI-enabled future
• Closing talent and skills gaps
• Creating a culture that embraces continuous adaptation

The current wave of AI innovation is undoubtedly transformative, but technology alone will not determine which retailers win.

The businesses that thrive over the next decade will be those that combine strong fundamentals with technological advantage. They will use AI to scale what already makes them distinctive, valuable and trusted.

In that sense, the challenge facing retail leaders is clear.  AI can amplify resilience, or amplify areas of weakness.

For more insight on the European retail market, contact our experts.