2026 retail predictions

AI is transforming how and where people shop. It’s on pace to have more impact, and disruption, for retailers than the Internet and the Cloud. Executives I talked to everyday are grappling with not only technology adoption, but organizational skills, processes, and structure required to optimize what’s arguably the greatest innovation of our lifetime. These five predictions will be the investments making retail headlines in 2026.

1. Personal AI Agents Redefine Shopping

We’re witnessing the most significant shift in how consumers discover brands online since the rise of search engines. One-third of shoppers already use personal AI agents for discovery and inspiration and this number is expected to surge to at least 50% by the end of 2026. Retailers must understand that it is no longer just about pulling consumers to their website. It’s as much about pushing their brand to where consumers already are—increasingly on other properties and domains.

Just like search engine optimization (SEO) became table stakes in the early days of the internet, agent engine optimization (AEO) is the new battleground for brands to be found. These platforms understand customer intent and know if a shopper is planning for a gift, trip, or special occasion. Brands that are discoverable and make it easier for shoppers to find what they want within these walled gardens will win. The ones that don’t? They’ll simply be invisible to an increasingly large segment of intentional shoppers.

The friction will be minimized when the likes of ChatGPT, Perplexity, and Gemini integrate payments and checkout—moving from conversation to conversion without ever leaving the agent. Don’t expect this type of adoption to happen overnight, though. Remember that live shopping and social commerce are just hitting critical mass in the US after several years of hype.

What does this look like? Instacart just announced full integration within ChatGPT, enabling shoppers to order multiple items directly through conversation. Imagine discussing a recipe with ChatGPT and seamlessly ordering all the ingredients through Instacart without leaving the chat. Brands will also adapt with enriched product descriptions, friendly feeds, and conversational catalog formats designed specifically for AI discovery.

2. AI Will Move into the Store

While most of the AI buzz has been centered on the digital experience, look for consumers and store associates to leverage it in brick-and-mortar locations throughout 2026.

The most common applications of AI in the physical store will be clienteling and loyalty to enhance the customer experience and inventory management and training to streamline the employee experience. The data and intelligence from these technologies will be accessed via mobile devices to keep store associates on the sales floor—engaging shoppers during the check-in process rather than waiting for the check-out process.

Personalized engagement when customers need it most also enables retailers to capture some of the richest intent data available across all channels. While beneficial customer information—like their profile, preferences, and history—is traditionally lost in the store, retailers will use AI to increasingly capture and activate this structured and unstructured data in 2026.

What does this look like? Boot Barn, the hottest lifestyle retail chain devoted to western and work-related footwear, apparel, and accessories, is one of the first to bring AI into their nearly 500 stores with Cassidy. The Cassidy experience is tailored to each unique customer and the specific store they visit. They are also utilizing AI to provide product training to store associates to enhance product knowledge, particularly around work boot and apparel features. The business impact is clear: higher average transaction values, improved conversion rates, fewer returns, and dramatically reduced training hours.

3. LLMs Enter the Advertising Space

Just like dialing up Ask Jeeves in 1996, who answered user questions in natural language, people will be prompting Claude in 2026, who will provide responses that include digital ads. The phrase “monetize eyeballs” that represented the shift in value from physical attention to digital attention is back. Reminiscent of Altavista, Excite, and Lycos in the nascent search engine wars, LLMs will be turning audience engagement into revenue streams via advertisements this coming year.

The challenge for LLMs will be to balance igniting new revenue with honoring a simple user experience. More directly…these walled gardens must continue to build trust and convenience while introducing new products that add value (to both the customer and platform). The emerging risk of “answer bias” and the need for transparency in LLM advertising will become critical trust issues that platforms must address.

What does this look like? When a consumer asks ChatGPT for the best stuffing recipe for a meal with kosher and celiac guests, the results will soon prioritize brands that pay for placement—just like Google search ads today. Retail Media Networks, where brands like Campbell’s pay retailers like Target for shelf space and promoted listings, is a massive and rapidly growing market. Now LLMs are entering this space and more than likely taking market share from Amazon, Google, Walmart, and Target.

According to Retail Media Network expert Kiri Masters, “Retail Media’s frenetic growth in recent years is threatened by the emergence of LLM ad networks in two ways: as a risk to both their onsite ad revenue and offsite audience extension revenue. Retailers will need to invent new ways of working with brands to achieve shared goals. This may include revisiting ‘old’ monetization avenues like in-store media and displays, which are likely to be resilient.”

4. Agentic Marketing Accelerates

For the past several years retailers have invested in specific marketing technology to address specific capabilities by specific channels to effectively engage consumers. Overlapping legacy systems resulted in bloated costs, disparate data, limited intelligence, and fragmented workflow. And while this approach optimized each channel, it fell short of streamlining and personalizing the experience across all channels to drive customer loyalty and lifetime value.

Marketing executives—along with those creating campaigns, journeys, and automations on a daily basis—are realizing that this isn’t sustainable. That’s why we’ll see a significant migration to AI marketing platforms in 2026. Retailers want these unified platforms like Cordial to enrich structured and unstructured data, understand customer intent, and instantly personalize messages at send time…across any channel from emails to agents.

What does this look like? Expect agentic marketing to automate workflow internally while personalizing engagement externally. Then, closing the loop so the agent gets smarter with each subsequent campaign. Creative automation and agentic personalization will become baseline capabilities—not differentiators. Brands like Levis’Store are already leveraging AI to orchestrate personalized experiences across every touchpoint.

Data continues to be a critical underpinning that fuels agentic AI in marketing. The emphasis on data this year will be:

• Intent: knowing—and acting on—context, memory, emotion, preference, and profile
• Stitching: translating unknown to known customers for a complete mosaic of data
• Governance: balancing the hypothetically millions of permutations of creative, offers, copy, prices, etc. while ensuring messages are accurate and on brand

5. Off-price Goes Online with Value Marketplaces

Off-price retailers—creating a treasure hunt by offering excess inventory, last season merchandise, and made-for-off-price runs—have historically stayed on the sidelines of ecommerce. The unique model of opportunistic buys, relatively low prices, and less granular inventory management in stores has made it difficult to run the business profitably.

2026 will see more retailers in this category double down on proprietary discount marketplaces. Check out what TJ Maxx and Nordstrom Rack are already doing online by growing assortments and value. They are no doubt paying attention to full-price retailers like Macy’s, Best Buy, and Lowe’s Companies, Inc. who have successfully stood up marketplaces to expand their addressable market while lowering inventory carrying costs.

What does this look like? We are seeing the rise of online value marketplaces as a category that specializes in closeouts. These platforms help brands—particularly higher end—protect margins especially as tariffs eat into raw material and operating costs. This shift requires traditional off-price retailers to build entirely new muscles: capturing customer emails, managing customer profiles, and activating personalized marketing—a complete departure from the traditional treasure hunt model where anonymity was the norm.