Observed Signal · Sep 9, 2026 · Product Launch · Source: Retail Dive · Impact: 3/5 · Sentiment: Positive
Retailers Invest in AI for Supply Chain and Shopping
Major retailers, including Gap, Dollar General, Ulta Beauty, and Kohl's, are accelerating AI adoption across supply chain, customer experience, and internal operations, as revealed in their Q2 earnings calls. Ulta's CEO Kecia Steelman highlighted early AI adoption for productivity and scaling opportunities, with new CTO Kelly Garcia advancing tech initiatives. Gap's capital expenditure for technology and supply chain is set at $650 million. Ulta uses AI for sourcing, inventory optimization, and AI-powered search and discovery, including its on-site shopping agent Ulta AI. Kohl's CEO Michael Bender reported early positive results from its AI shopping assistant, improving conversion and revenue per visit. Dollar General's CEO Todd Vasos mentioned building agentic operating systems for enterprise workflows, with net sales up 5.2% to $11.3 billion. Bain partner Aaron Cheris notes that most retailers are applying AI to specific areas rather than pursuing full AI transformation, with examples like Home Depot's Magic Apron and Walmart's Sparky.
Retailers are increasingly adopting AI across supply chain and customer experience, indicating a significant shift toward AI-driven retail operations that influences advertising and customer engagement strategies.
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Key Takeaways & Evidence Grounding
- Gap Inc. expects capital expenditure of $650 million this year for stores, technology, and supply chain.
- Ulta Beauty is investing in AI for supply chain, search, and discovery, and promotes its Ulta AI shopping agent.
- Kohl's AI shopping assistant is resulting in stronger conversion and higher revenue per visit.
- Dollar General's net sales rose 5.2% year over year to $11.3 billion, and it is developing agentic operating systems.
- Retailers are deploying AI for supply chain optimization, customer experience, and internal productivity.
- Examples of AI shopping tools include Home Depot's Magic Apron and Walmart's Sparky.
Connected Companies & Entities
8 Entities mapped“Gap Inc.'s capital expenditure is expected to reach $650 million this year”
“Dollar General CEO Todd Vasos said building agentic operating systems for enterprisewide workflows”
“Ulta named former Domino's executive Kelly Garcia as its new CTO to continue to advance technology capabilities”
“Kohl's CEO Michael Bender said he was encouraged by early signs of the store's AI shopping assistant”
“Tools like Home Depot's generative AI shopping tool Magic Apron stand out as examples”
“Walmart's commerce agent Sparky stands out as a prominent retail AI example”
“Ulta named former Domino's executive Kelly Garcia as its new Chief Technology Officer”
Ontology Mapping & Concepts
Related Market Signals & Shifts
Recent verified developments and strategic activity across this market segment.
Retailers Adopt AI for Productivity and Personalization
Best Buy, Gap and Dick’s Sporting Goods highlighted increasing investments in AI during their Q1 earnings calls, describing uses from internal productivity to customer-facing shopping assistants. Best Buy’s incoming CEO Jason Bonfig said the company is positioning itself as a retail media, advertising and technology company and highlighted partnerships with OpenAI and Google; Best Buy reported $8.9 billion in revenue and 2% comparable‑sales growth for the quarter. Gap reported AI pilots with Google’s Gemini and Inspectorio’s Paramo to improve product discovery, design and allocation, and cited a 2% increase in comparable sales. Dick’s unveiled an agentic AI adviser, “Coach by Dick’s,” developed with Adobe Brand Concierge and scheduled to roll out in June. The article also cites industry research forecasting rising AI tech spend and the potential growth of agentic commerce through 2030.
Grocers Prioritize Back-End AI for Operations
Grocery chains are increasingly investing in back-end AI tools that target operational challenges — inventory forecasting, produce quality inspection, pricing and promotions — and experts say these offer better near-term ROI than flashy consumer-facing chatbots. Examples include Albertsons’ agentic shopping assistant and a proprietary AI tool to inspect strawberries; Hy-Vee’s partnership with Relex for fresh-product forecasting; and Grocery Outlet’s adoption of Afresh for ordering. Industry sources emphasize grocers must clean and connect fragmented data, break organizational silos, and redesign processes to capture full AI value. A 2025 FMI survey found 47% of grocers using AI (77% among large grocers), while concerns persist about costs and workforce impacts — Bloomberg reported Walmart capped agentic AI use after exploding usage costs, and surveys show worker anxiety about AI. Experts argue change management and data fabrics are as important as technology for reaching an 'agentic' retail future.
Retailers Integrate AI Shopping with Own Data and Checkout
Retailers and major AI companies are integrating AI-driven discovery with merchant product data and checkout systems to keep transactions and customer data within retailer ecosystems. Adobe reports substantial increases in AI-referred traffic and conversion rates in 2026, while Google launched Universal Cart and a Universal Commerce Protocol (UCP) to enable checkout features across Search and Gemini. OpenAI’s Agentic Commerce Protocol and structured product feeds let merchants supply product and checkout data to AI shopping services while remaining merchant of record. Retailers including Walmart, Ulta Beauty, Wayfair, Nike, Sephora and Target are working with AI services to enable shoppable experiences and retain first‑party customer insights. New measurement tools from Google and Adobe help merchants assess AI visibility and identify missing product attributes.
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