116 The art of merchandising has always been rooted in creativity, intuition and a deep understanding of the customer. Advances in agentic AI are amplifying this by allowing merchants and planners to delegate manual, repetitive work to AI tools, freeing them up to focus on creative decisions. In fact, McKinsey’s January 2026 Merchants unleashed: how agentic AI transforms retail merchandising report suggests retail merchants could reclaim up to 40 per cent of their time by offloading these tasks to agentic AI. “Earlier generations of AI gave merchants better dashboards and faster analytics, but agentic systems go a step further by taking action,” says Sue McMahon, merchandising, sales and revenue growth strategy lead at Microsoft. “They can monitor signals, refine assortments, adjust pricing and enrich product data, all within the guardrails set by the merchant. Agentic merchandising represents a fundamental shift in how AI is used within retail. In practice, this means a retailer’s merchandising function starts to operate more like a continuous intelligence system. For example, an agent could track realtime demand signals overnight, spot a change in category trends, identify an inventory imbalance and prepare a prioritised recommendation brief for the merchant to review the next morning. Tasks that once took teams days to consolidate can now happen in minutes. “At Microsoft, we see agentic merchandising evolving across three layers. Firstly, agents that handle repetitive, data-heavy tasks such as catalogue enrichment, demand forecasting analysis and promotional reporting. Secondly, agents that orchestrate workflows across systems, linking merchandising decisions with supply chain, store operations and customer experience in real time; and thirdly, agents collaborating with one another, while the merchant remains the strategic decisionmaker overseeing the process.” McMahon believes agentic AI is fundamentally reshaping how decisions are made across the retail sector. “At the task level, agentic AI is a powerful accelerator,” she says. “Processes to pull together sales data, run forecast models and prepare vendor negotiation briefs once took a week to complete, but now they happen continuously and automatically. That is acceleration. However, we are witnessing a more fundamental shift at the structural level.” The adoption of agentic AI is creating a shift in retail, freeing up merchandisers to focus on higher-value creative tasks, says Microsoft’s Sue McMahon BY LAURA HYDE FEATURE AI-powered Human-led, “ The shift is real, but the pace varies enormously across the industry”
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