By Stuart Kerr, Technology Correspondent
🗓️ Published: 12 July 2025 | 🔄 Last updated: 12 July 2025
📩 Contact: liveaiwire@gmail.com | 📣 Follow @LiveAIWire
🔗 Author Bio: https://www.liveaiwire.com/p/to-liveaiwire-where-artificial.html
Winners and Widening Gaps
AI promises to revolutionise retail and small business—but not everyone is invited to the party. In 2025, while major e-commerce platforms and digitally fluent startups reap the benefits of predictive analytics, smart inventory, and automated customer service, many local shops remain stuck behind the glass of algorithmic transformation.
The OECD warns that digitalisation among small and medium enterprises (SMEs) remains fragmented, with significant uptake gaps across sectors and countries. Meanwhile, large firms increasingly rely on AI to optimise dynamic pricing, personalise marketing, and even automate product design.
In rural towns and high streets, smaller players are struggling to keep pace—not just in tools, but in training, trust, and access.
The Divide Behind the Till
Big retailers use AI to drive supply chain efficiency, monitor social media sentiment, and predict demand spikes. For them, it’s a cost-saving measure and a strategic edge. For smaller competitors, however, AI often arrives as a threat—opaque, expensive, and poorly explained.
The UNCTAD warns that unequal digital adoption risks creating an "AI divide" between empowered market players and digitally excluded SMEs. In sectors like fashion and food, large brands now use AI-generated trend analysis and synthetic product photography to speed up time-to-market.
This creates what we described in The Silent Bias: a loop in which dominant players train algorithms on biased datasets, then reap advantages those same datasets reinforce.
Personalisation and Privacy
AI tools like chatbots, virtual assistants, and tailored recommendation engines offer small retailers a route to compete on customer experience. But uptake remains limited. According to the OECD's 2024 SME report, less than 20% of SMEs in Europe use AI for customer engagement.
Cost isn’t the only barrier. In Faith, Fraud and Face Filters, we noted how trust in AI-powered identity tools remains low among both consumers and vendors. Privacy concerns, lack of data regulation clarity, and poor support from tech vendors leave many business owners wary of automation.
Invisible Infrastructure and Dependence
Many small businesses are already using AI—without realising it. From ad targeting via Meta to fulfilment predictions on Amazon, they rely on AI-driven platforms to reach customers. But this reliance is precarious. As we wrote in Invisible Infrastructure, third-party control over digital tools leaves SMEs vulnerable to algorithm changes they can’t see, influence, or understand.
This structural dependence has real costs: sudden drops in ad reach, changing fee structures, and opaque decisions on product visibility. In short, AI helps—but only if you're on the right side of the interface.
Towards an Inclusive AI Economy
If AI is to serve small business, it must be made legible, affordable, and fair. That means targeted policy, not just platforms. Digital training programmes, ethical algorithm audits, and subsidised AI adoption schemes are just a few proposals emerging from UNCTAD’s 2024 technical note on small retailers and e-commerce.
Still, the power dynamics remain skewed. As we saw in Ghost Writers of the Courtroom, AI isn’t neutral—it reflects its makers. If retail’s future is to include the corner shop and the market stall, then those voices must help shape the code.
About the Author
Stuart Kerr is the Technology Correspondent at LiveAIWire. He writes about AI’s impact on infrastructure, governance, creativity, and power.
📩 Contact: liveaiwire@gmail.com | 📣 @LiveAIWire
