Retailers have significantly tightened oversight of employee AI tool adoption, with the share of retail workers using ungoverned AI tools declining from 70% to 44% since Netskope's previous annual report (Retail Dive - Technology). Meanwhile, adoption of officially approved tools surged from 40% to 73%, and overall two-thirds of retail employees now use some form of standalone AI tool (Retail Dive - Technology).
Despite these gains in shadow AI reduction, retailers face mounting challenges in controlling where sensitive data flows. Nearly all retail employees use software containing AI features, and 90% reported using AI tools trained on customer data (Retail Dive - Technology). Of AI-related data policy violations tracked by Netskope, 56% involved regulated customer data (Retail Dive - Technology). Agentic AI poses a particular visibility blind spot: Netskope observed a 400% increase in retail AI agents interacting with remote Model Context Protocol (MCP) servers during the survey period, creating additional pathways for unauthorized data movement (Retail Dive - Technology).
Retailers can mitigate these risks by blocking unnecessary applications, inspecting web traffic, and deploying data-loss-prevention policies to detect sensitive information flowing to ungoverned tools (Retail Dive - Technology). The report, based on data collected between July 2025 and July 2026, highlights the tension between rapid AI adoption and governance maturity in the sector.