Artificial intelligence is moving rapidly from retail experimentation to a source of competitive advantage across Europe. The 2026 report Rewiring Retail in Europe: The AI Imperative, from McKinsey & Company and EuroCommerce, estimates that end-to-end AI transformation could unlock €240–320 billion in economic value for European retail over the next five years, equivalent to a potential four to ten percentage points improvement in operating profit.
For retailers, the implications are particularly tangible. The report identifies pricing, promotions, assortment optimisation and supplier negotiations among the highest-value AI applications. Yet these commercial areas remain relatively underfunded: just 15% AI investment is concentrated in the commercial domain.
AI is also expected to reshape demand forecasting and supply chain management, enabling more accurate decisions around inventory, ranges and product availability. Combined with richer consumer data, this could accelerate the development of more targeted assortments and reduce waste and inefficiency.
The report highlights the emergence of “agentic commerce”, in which AI systems increasingly discover, compare and potentially purchase products on consumers’ behalf. With 61% of European consumers already using AI for product discovery and evaluation, product visibility may increasingly depend on how effectively brands and retailers make their ranges understandable to AI systems.
The next phase is therefore likely to be less about AI pilots and more about rewiring organisations around measurable applications. Those best placed to benefit will be companies that connect AI with data, commercial decision-making, supply chains and human expertise.