The overview: Retailers are weaving generative AI (genAI) into more areas across their organizations, but the industry-wide adoption remains nascent, according to a report by Deloitte.

• 85% of consumer products companies and 76% of retailers report being in the early exploration phase, with limited business impact thus far.
• Just 7% of the retailers and 3% of the consumer products organizations surveyed considered themselves genAI leaders.

Zoom in: Despite the immediate lack of tangible results, companies are bullish about genAI’s ability to increase efficiency, lower costs, and improve the customer experience.

• Two-thirds of retail respondents (65%) have adopted genAI to support ecommerce operations, with 17% reporting widespread use. A similar proportion (59%) are using the technology for marketing and branding.
• 70% of consumer products companies are using genAI for marketing and branding, while over 50% report using it for customer service and research and development.

Some examples: Companies are finding genAI is particularly useful to upgrade their search experiences and deliver more personalized, relevant suggestions.

• Etsy’s updated buyer models, which use a combination of LLM techniques and advanced machine learning to interpret users’ interests, are driving double-digit increases in engagement and improving email and web experiences, CEO Joshua Silverman said on the company’s Q3 earnings call. Etsy is also using genAI to determine key product details from each listing—such as size and color—to enhance the search experience, helping to drive sales and ad conversions.
• Ralph Lauren introduced an AI personal shopper, Ask Ralph, that dispenses personalized advice and recommendations from a conversational interface on its app. While the tool has only been available for a short time, the company noted that early engagement and feedback “have been encouraging.”
• Walmart, Target, and Wayfair are among the numerous other retailers leaning on genAI to help simplify and enhance the online shopping experience.

GenAI’s impact on hiring plans: Companies are leaning on genAI to enable them to do more with the same—or possibly fewer—staff.

• Amazon CEO Andy Jassy said in June that he expects increasingly capable AI agents will ultimately result in a smaller corporate workforce by automating routine tasks and bolstering innovation. The company is already moving in that direction: It cut 14,000 roles from its corporate workforce in late October to prepare for an agentic future.
• Walmart expects global headcount to stay flat over the next three years, even with sales projected to grow at a healthy clip. The company plans to introduce two “super agents” next year to help associates and engineers handle tedious tasks and accelerate innovation.
• Airbnb is keeping hiring to a minimum with the expectation that AI will help teams get “considerably more work done,” CEO Brian Chesky told The Wall Street Journal.

Recommendations for 2026:

• Companies should focus on genAI uses that can deliver immediate improvements to the customer experience—such as better search, deeper personalization, and more helpful customer service.
• Retailers also need to equip their employees with the knowledge and resources required to effectively use genAI tools, which could help transform underperforming pilots into initiatives that deliver measurable efficiency gains.