AI was meant to help small retailers compete with giants. Instead, 73% say cost is locking them out. monday.com’s latest study exposes the growing divide in retail tech.
What’s happening: Australian retailers are rapidly adopting AI agents, with 82% piloting or deploying the technology, but trust remains low. Only 9% are confident enough to let AI manage full customer journeys without human intervention, according to new research from monday.com surveying 500 ANZ retail decision-makers.
Why this matters: The research exposes a critical divide: whilst nearly all retailers believe AI can help local businesses compete globally, small retailers are being priced out. With 73% of micro retailers citing cost as the main barrier, the technology meant to level the playing field is instead widening the gap between large and small players.
Australia’s retail sector has reached a turning point in artificial intelligence adoption, but the path forward is far from straightforward. Whilst the majority of retailers are embracing AI agents, deep-seated concerns about trust, transparency and accessibility are preventing the technology from reaching its full potential.
New research released by monday.com, surveying 500 senior retail decision-makers across Australia and New Zealand, reveals that 82% of retailers are either piloting or have already deployed AI agents within their businesses. Yet despite this widespread uptake, fewer than one in ten trust these systems to manage the full customer journey without human involvement.
“Retailers across ANZ understand AI isn’t just a trend, it’s a transformative shift,” said Gavin Watson, Senior Industry Lead at monday.com. “But access must be fair, and trust must be earned. Our research shows a clear appetite for AI-led innovation, but also highlights where vendors and decision-makers can step up to ensure no business gets left behind.”
Trust remains fragile
The research found that whilst 70% of retail leaders believe AI agents will be transformative, significant concerns are holding back full implementation. More than two-thirds (68%) said they are worried about the quality and consistency of AI-generated outputs, whilst 64% cited customer scepticism as a key concern.
“We’re seeing real caution in the market, and for good reason,” said Watson. “Retailers are right to question where their data is going, and how it’s being used. At the end of the day, protecting the brand-customer relationship is paramount.”
Integration challenges are also proving problematic, with 68% of retailers reporting difficulties embedding AI across multiple platforms. The same proportion warned that a lack of transparency could directly impact brand loyalty.
Watson emphasised that successful AI adoption requires more than enthusiasm. “To truly unlock the benefits of AI, retailers need more than just tools; they need the right frameworks to ensure AI supports, rather than undermines, the customer experience. That means building in guardrails for data privacy, keeping humans in the loop, and ensuring automation reflects a brand’s values at every touchpoint.”
Cost blocks small players
One of the most pressing findings is the growing divide between large and small retailers in terms of AI readiness. Whilst nearly all respondents (93%) believe AI has the potential to help local businesses compete with global retail giants, only 62% of small retailers with fewer than 50 employees agree.
Among small retailers, just 40.9% have AI agents live today, compared to 71.4% of mid-sized chains with 100 to 499 employees. For micro retailers with one to nine employees, cost is the biggest barrier to adoption, cited by 73% of respondents in that category.
The skills gap is also significant. Only 65% of small firms reported strong in-house AI expertise, compared to 78% of all respondents. Whilst ambition is high, many small businesses simply lack the resources, tools or know-how to bring AI to life.
“The irony is AI should help small businesses do more with less, but right now, they’re the ones being left behind,” Watson said. “For smaller retailers, this isn’t just about cutting costs. It’s about gaining back time, improving operations, and being able to compete on a more level playing field.”
Sector-specific strategies
The research reveals that AI adoption strategies vary significantly across retail categories. In the fashion and e-commerce industries, businesses are leading in the deployment of AI-powered customer support (63.6%) and marketing automation (54.5%).
Food and beverage retailers are taking a different approach, prioritising AI for inventory optimisation (62.1%) and logistics support. Meanwhile, luxury retailers are leveraging AI primarily for fraud detection (58.1%) and customer service enhancement (54.8%).
As AI adoption becomes more sophisticated, retailers are increasingly aligning their AI investments with their core operational challenges, from delivery efficiency to brand protection.
The accessibility challenge
Watson argued that closing the gap between large and small retailers requires real support, not just more tools. “Vendors and platforms like monday.com have a responsibility to make AI accessible. That means helping small retailers understand where AI can genuinely move the needle, not just automating for automation’s sake. Our role at monday.com is to surface the insights that matter, and make it easy for businesses of every size to adopt AI in ways that are practical, purposeful, and impactful.”
The research, which included an additional 1,350 retailers surveyed globally, suggests that the retail sector’s AI revolution is still in its early stages. Whilst adoption rates are high, the industry faces critical questions about trust, fairness and implementation before AI can deliver on its promise to transform retail operations across businesses of all sizes.
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