Shelf Life | Vol. 14: Live from the Front Lines: War’s Ripple Effect on Retail and CPG AI
🗓️ June 2025 | ✍️ By Jackie Swanson
Retail’s smartest systems are being outpaced by the world’s fastest-moving crises.
AI is now fully embedded across the retail and consumer products value chain. From product design to demand forecasting. From pricing to fulfillment. But here’s the catch. AI loves stability. The world does not.
Global events like Middle East conflicts, Red Sea shipping attacks, oil price volatility, and rising regional tensions are quietly stress-testing AI at every link in the chain.
According to Gartner’s latest research, the global importance of this region makes it near-impossible for businesses to avoid impact. Retailers who thought their tariff playbooks were sufficient are realizing this is a whole new game again.
📰 And That’s the Way It Is: Where AI Is Thriving
💡 AI is still winning in key areas:
🛍️ Visual search and predictive discovery are revolutionizing how consumers shop🎨 AI-powered design is accelerating product launches📦 Automated fulfillment and smart warehousing are cutting delivery costs💬 AI chatbots are getting sharper at personalizing the customer journey
🚨 Breaking News: Where AI Is Breaking
Global conflict is exposing fragile AI systems across the value chain.
⚡ Supply chain models trained on stable shipping lanes cannot keep up with real-time reroutes as shipping lines suspend services and avoid high-risk transit channels💸 Pricing algorithms are not built for the whiplash of fuel surcharges, volatile transportation rates, and surging marine insurance premiums. Gartner warns these pressures will intensify as tensions escalate📊 Demand forecasting engines are struggling to adjust as supply disruptions must now be anticipated across Israel, Iran, the UAE, Qatar, Kuwait, and Iraq
🗞️ All the News That’s Fit to Print: When the Headlines Break the Algorithm
AI is great at solving logistical puzzles. It can reroute trucks. It can optimize prices. It can predict what you will click next. But here’s what AI cannot do. Handle human conflict.
When war, workforce tension, and public opinion collide, the algorithms start to crack. These are ethical, political, and reputational challenges that AI simply is not built to solve. This is where the models break.
According to Gartner, retailers now face interconnected risks that go beyond the data:
✅ Employee Risks such as protecting physical safety and emotional well-being across global teams
✅ Supply Chain Risks such as lost or delayed access to critical commodities and blocked manufacturing hubs or shipping routes that AI cannot simply optimize away
✅ Financial Risks such as exposure to volatile exchange rates and commodity prices and new economic barriers that AI pricing models are not trained to predict
✅ Cyber Risks such as state-sponsored cyberattacks against politically visible companies and opportunistic breaches and misinformation campaigns that cannot be mitigated by automated systems alone
✅ Reputation Risks such as public pressure to take a side or stay silent and the real possibility that customers will abandon your brand based on your response to the conflict
This is the part AI cannot compute. This is where leadership, not algorithms, needs to make the next move.
🌎 In Your Neck of the Woods: What Retailers Should Do Now
An AI strategy is essential and it is not always straightforward. Trust an expert to help think through what's right for you. Here's some tips to get started based on Gartner Research and Consulting best practices:
✅ Balance automation with human oversight to avoid over-reliance on fragile models✅ Invest in high-quality, real-time data to keep AI relevant in fast-changing conditions✅ Continuously recalibrate AI models to account for global disruptions✅ Prioritize use cases that deliver measurable business value like demand forecasting, intelligent fulfillment, and customer engagement✅ Stress-test AI systems regularly to ensure they can adapt to supply chain shocks, pricing swings, and regulatory changes✅ Build agile governance and cross-functional teams that can quickly pivot when AI outputs no longer match market realities✅ Embed scenario planning into your AI strategy to prepare for multiple crisis paths not just steady-state growth
💬 Back to You in the Studio: What is the part of retail you would never trust AI to fully own (design?, discovery?, pricing?, fulfillment?
Good night, and good luck.
More to come in the Shelf Life series. Follow me here for sharp takes on the trends shaping retail, fashion, and consumer product companies. Want to talk more about how Gartner Consulting can help your organization? Follow me on LinkedIn, @ShelfLifebyJKS on Instagram or reach out at jackie.swanson@gartner.com.
📍 Jackie Swanson is a Managing Partner at Gartner Consulting, specializing in retail, consumer products, and utilities. She advises companies on large-scale transformations spanning strategy, operations, and technology. Jackie lives in New York with her husband and their three children.
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