Retail Trends 2026

Retail has had a turbulent few years around the world. We saw a steady build up till 2019, then a sharp nosedive during the onset of COVID in 2020, then online businesses booming in 2021-22, and then decline in growth since then. The turbulence of the global economy in the last few months has not left Retail unscathed with back and forth policy changes causing uncertainty, and impact of tariffs threatening already squeezed margins for retailers. 

Consumers have also been adjusting to changes in their life, driven by macro events. From aggressive online shopping to a renewed focus on household budgets driven by increased prices across the basket. And yet, a good part of the consumer expectations from retailers have remained similar - the need for quick & free delivery, seamless shopping experience across online & offline, and of course the need for quality & affordable products. 

So, what are the key highlights and focus areas for the Retail industry looking forward into 2026? 

1) US tariffs & pricing pressure

Tariff policy has become a material planning variable for retailers in 2025–26: patchwork duties and changing “de-minimis” rules are already altering landed costs and customer prices. In a June 2025 BCG survey, 65% of US consumers said they expect tariffs to push prices higher - and that expectation is already shifting purchasing behavior.

What this means for retailers: treat tariff risk like currency risk - model scenarios, re-price dynamically, and move faster on alternate sourcing and private-label strategies. Expect more promotional cycles and sharper “trade-down” behavior in discretionary categories.

2) AI investments - the ROI pivot (retailer perspective)

After two years of exploratory spends, 2026 is the year boards ask for measurable returns from AI projects. Many companies report heavy investment but limited scaling: McKinsey’s recent work highlights that nearly all firms invest in AI but a tiny fraction consider themselves at maturity - the governance and workflow redesign work remains. At the same time, focused AI investments in marketing and sales have shown improvements in sales ROI in the range of ~10–20% for companies that scale successfully.

What this means for retailers: fund pilots that have clear KPIs and measurable outcomes (e.g., % reduction in markdowns, % uplift in conversion). Build the data plumbing and governance now: models without data discipline rarely pay back.

3) AI reshaping customer experience (hyper-personalisation & in-AI shopping)

Generative AI and shopping assistants are changing how customers discover and buy. Surveys in 2025 show rising experimentation: a substantial share of consumers have used generative AI to research or shop, and many plan to do so more often. Retailers who embed AI into product discovery, recommendations, and checkout flows can reduce friction and lower return rates. For example, early evidence shows consumers turn to AI for product comparisons and deal discovery - use cases that lift conversion when executed well.

What this means for retailers: integrate AI into front-end journeys (search, recommendations, conversational assistants) but prioritize trust and explainability. Start with high-value categories where personalization clearly affects conversion and returns.

4) China - competition, sourcing and innovation pressure

China remains a multi-faceted force: platform exports (Temu, Shein), competitive pricing, and a huge domestic market for luxury and innovation. Temu’s rapid growth - cited GMV and expansion figures in 2024-illustrate how Chinese platforms compress price expectations in export markets. Retailers face competition from low-price entrants while also relying on China for supply chain scale and innovation.

What this means for retailers: run a three-track strategy - (1) defend local market share with value propositions and differentiated service, (2) diversify sourcing to reduce concentrated risk, (3) experiment with marketplace & channel plays in China where demand still matters for luxury and scale.

5) Automation & autonomous operations

Robotics and autonomous systems moved from pilot to scale in 2024-25. Amazon reports more than 750,000 robots across its operations, and analysts project multi-billion dollar cost savings as robotics become more capable and cheaper per task. 

Warehouse robotics, autonomous sortation and last-mile pilots are changing where and how retailers invest capital. GXO Logistics has initiated a program to test humanoid robots in its warehouses, aiming to integrate advanced AI-driven automation into its operations. Robots like Agility Robotics' Digit are operational in warehouses, performing tasks such as moving containers and recycling materials, enhancing efficiency and reducing reliance on human labor.

This is not just limited to the back office, and will spill over into the store as well. At the 2025 Osaka Expo, 7-Eleven introduced "newme" robots - remote-controlled avatars operated by staff to assist customers with tasks like using self-service tills and ordering food. This innovation addresses workforce shortages, costs in high labor-cost markets and enhances customer service.​

What this means for retailers: prioritize automation where it frees up meaningful labour cost or reduces handling times (peak seasons, high SKUs). Think in aisle-level ROI terms: robots that cut 5–15% of fulfilment cost can justify major capex.

6) Sustainability moves from marketing to operational imperative

Sustainability is no longer just a brand halo; consumers and regulators are enforcing it. Surveys show shoppers remain willing to pay a premium for sustainable goods (PwC found an average willingness around ~9.7% premium in 2024), but behavior depends on price and convenience. Retailers must therefore embed circular models and traceability where consumers are willing to pay, and improve operational emissions where regulation or buyer pressure demands it.

What this means for retailers: focus on high-impact interventions (packaging, energy, logistics) that reduce costs and emissions. Test circular services (rental, resale) in categories where customers already show interest.

7) Retail media becomes a more central revenue stream

Retail platforms are turning shelf space into ad inventory: retail media networks now account for large slices of e-commerce ad spend, with major growth concentrated in the US and China. Industry forecasts show retail media continuing to grow, with significant incremental ad dollars expected into retail search and platform ads over the next few years.

What this means for retailers: build measurement products and first-party data assets to capture ad dollars while protecting consumer trust. Brand partnerships and on-site ad products will be a meaningful margin lever - but measurement and transparency are table stakes.

So, to summarise, what should retailers do to best prepare for 2026? 

1. Stress-test pricing and sourcing under tariff scenarios; operationalize alternate suppliers.

2. Treat AI projects like product launches: defined KPIs, governance, and scale paths.

3. Invest in AI-led front-end experiences that demonstrably improve conversion and lower returns.

4. Balance China strategies across competition, supply, and growth - localize where necessary.

5. Prioritize automation where ROI is clear (peak volumes, repetitive tasks).

6. Deliver sustainability where customers or regulations pay you back - packaging, logistics, product lifecycles.

7. Build a retail-media play with measurement-first approach; monetise first-party data responsibly.

Retail in 2026 is going to continue to be challenging in the shadow of geopolitics, hard cost inflation and a rapid technology maturation cycle. Executives are juggling near-term margin protection with longer-term bets on automation and AI. The year ahead will reward retailers who are pragmatic about ROI, agile on sourcing, and ruthless about customer experience.

If you have an opinion or two about this article or any points therein, I’d love to hear it! Or if you would like to learn more, please drop in a line to vinayvaswani@strivo.nl

Written by Vinay Vaswani, for Strivo B.V.