Artificial intelligence is becoming a standard business tool across European retail, but new regulation is changing how companies deploy it.
As retailers invest in AI-powered marketing, personalisation and generative AI, they are also preparing for stricter transparency rules under the EU AI Act, creating fresh challenges for an industry focused on growth and efficiency.
New research shows that most retailers have embraced AI, yet only a small number have integrated it deeply enough to deliver measurable business value.
At the same time, industry groups are urging European regulators to distinguish between harmful deepfakes and routine commercial uses of AI, warning that broad labelling requirements could create unnecessary costs without improving consumer protection.
Retailers move beyond AI experimentation
Artificial intelligence has quickly evolved from a pilot technology into a core part of retail operations. According to Retail Economics, 95% of European retailers are using or testing AI in marketing and e-commerce, but only 5% report achieving scalable returns on investment.
Many retailers now rely on AI to create product descriptions, generate marketing content, personalise customer experiences and automate routine tasks. Fashion retailers are also using digital AI models and virtual product imagery to reduce production costs and speed up campaigns.
The research suggests that technology alone is no longer the deciding factor. Retailers achieving the strongest results have integrated AI into everyday business processes, connected customer data across departments and built teams that can use AI effectively.
Only around one in four retailers has reached this level of maturity, leaving significant room for further development across the sector.
EU AI rules reshape retail marketing
As AI adoption grows, retailers are preparing for a new regulatory landscape.
The EU AI Act introduces transparency requirements for certain AI-generated and AI-manipulated content from August 2026. Retail businesses using virtual models, AI-generated advertising or customer-facing AI systems will need to ensure they comply with the new rules.
Retail industry groups are calling for greater clarity. They argue that digitally enhancing product images or creating virtual shopping environments should not be treated in the same way as deceptive deepfakes designed to mislead consumers.
The sector also warns that requiring labels on large volumes of everyday AI-assisted content could overwhelm both businesses and shoppers, making it harder for genuinely important warnings to stand out.
