Fragmented Systems: The Weak Link in AI-Era Retail

As I mentioned in Vertex’s rundown of 2026 retail trends, AI advancements are reshaping how customers research and complete purchases. Agentic buyers can now compare, select, and transact based on parameters established by human shoppers.

While this development has major implications for digital purchases, physical stores are also poised to transform in response to autonomous commerce and related AI tools. This shift will stress-test the systems and applications -- point of sale (POS), ERP, order management, e-commerce, product information management, CRM, and tax automation – that retailers depend on to complete transactions.

AI-powered shopping requires seamless system integration among these systems to meet customer expectations regarding availability, speed, and convenient return experiences. Satisfying these expectations will pose challenges given that tax, ERP, e-commerce, and reporting systems remain fragmented in many enterprises. Suboptimal systems integration also makes it more difficult to maintain consistent customer, transaction, and tax data across agentic purchases.

Mission-Based Brick and Mortar Stores

“Retailers should ensure that their digital systems are providing their store and district managers with the visibility they need to make better decisions so stores operate consistently and respond quickly to demand and inventory shifts,” according to a McKinsey/ICSC report that examines how physical stores and shopping centers need to evolve in the AI era.

Shoppers’ growing use of AI means that larger portions of the purchasing journey will occur before a customer enters a store. To satisfy AI-empowered buyers, McKinsey recommends assigning each physical location a primary mission – as a convenience hub, a discovery flagship, or a fulfillment node, for example. Once a store's mission is defined, its layouts, staffing models, service experiences, and supporting technology can be aligned around that objective. In convenience-focused stores, technology systems must work together to remove friction, guarantee reliability, and satisfy related customer preferences.

“Consumers now expect immediate access to information, easily comparable pricing, visibility into inventory or delivery timing, and a fast and simple purchase and returns process,” according to the report.

Fragmented Systems Undercut Sales

That said, it will be difficult to meet those expectations in retail organizations with fragmented technology systems.

In Vertex research drawing on 2,100-plus enterprise leaders surveyed by two independent research firms, respondents identified the integration of tax automation with existing systems as one of their top challenges. These application integration shortcomings give rise to manual compliance rework and can slow the tax group’s response to auditors. This Compliance Operations Drag (CompOps Drag™) can also create downstream operational friction when transactions are delayed or tax calculations require correction.

Retailers can reduce this friction by improving integration. Finance and tax leaders should also structure and manage tax compliance as a continuous lifecycle. In stores where AI agents have already compared prices and assessed availability before human shoppers walk through the door, tax teams can leverage modern retail tax automation to perform compliance at the speed of the transaction at the speed of the transaction rather than trailing behind.