Insights on consumer behavior, technology innovation, supply chain, workforce trends and policy.
Remember playing with a kaleidoscope as a kid? As you turned the tube, it created ever-changing colorful patterns — some more appealing than others. Over the next 12 months, retailers can expect constantly shifting patterns as they navigate rapid technological shifts led by artificial intelligence, economic volatility, regulatory complexities and critical workforce issues.
Much like 2025, uncertainty is the persistent refrain; name a topic and it likely applies. Has fast fashion reached its peak? Is AI integration truly yielding a return or just burying retailers in more data? Do shoppers trust brands? Influencers? Will secondhand shopping continue to thrive?
For some retailers and brands, overcoming uncertainty requires a reset. It might be time to look at all the bright lights they’ve been chasing and determine which shine the brightest and which should be dimmed — or even extinguished. “Doing it all” is so 2019; the focus for 2026 is on knowing who you serve, what matters most to them and how to deliver a customer journey that meets their needs.
Part of the journey demands a keen understanding of the trends shaping the future of retail, along with a finger on the pulse of what’s likely to unfold in the coming months. Here is NRF’s look at five trends and five predictions that will drive the retail industry in 2026.
Artificial intelligence is transforming how retail businesses operate and engage with customers, delivering unmatched personalization and operational efficiency.
While AI has peppered conversations for a few years, the industry witnessed two significant breakthroughs in 2025 — smart consumer agents and autonomous supply chains.
Read how NRF's Christian Beckner is following agentic AI and check out NRF's AI focus area.
AI-powered chatbots and virtual assistants have transformed customer service. These “agents” provide instant support, answering queries and assisting with purchases around the clock. Beyond simple recommendations, agents can reorder household essentials and suggest recipes with product links based on what’s in the shopper’s refrigerator.
Many retail companies have also begun implementing AI-driven personalization, leveraging advanced algorithms to analyze vast amounts of customer data and ultimately offer tailored recommendations and personalized shopping experiences.
An understanding of just how much retail companies will invest in AI and how they will parcel the capital is nebulous at best. Gartner projects that by the end of 2026, 40% of enterprise applications will include task-specific AI agents. It forecasts that, in a best-case scenario, agentic AI could generate nearly 30% of enterprise application software revenue by 2035.
IDC has reported that year-over-year spending on artificial intelligence is expected to grow by 31.9% between 2025 and 2029, fueled by the rise of agentic AI-enabled applications and systems designed to manage fleets of AI agents.
Other significant areas of investment are inventory management and supply chain. Predictive analytics enables retailers to forecast demand accurately, optimize stock levels and minimize waste, leading to more efficient supply chains and reduced operational costs. AI technology gives retailers the ability to automate operations, reroute shipments on the fly and rebalance inventory across their stores.
No one is planning to take their foot off the AI pedal in 2026. Most hope that smarter forecasting, automation and logistics efficiency will go a long way toward safeguarding margins. And they intend to continue down the agentic AI path in the quest for improved customer experience.
Those raising an eyebrow weren’t paying attention in 2025. According to Kantar’s 2025 PowerRanking, Walmart ranks as the most powerful U.S. retailer, praised for relevance, innovation, omnichannel experience and value — positioning it at the forefront of consumer culture. And with every announcement, it’s clear they will keep raising the bar in 2026.
Just in the last 12 months, the Bentonville behemoth has unveiled AI-driven recommendation engines across its app and website — and in store, delivering personalized shopping experiences. Merchants have also optimized inventory and pricing in real time, reducing stockouts and improving margins.
The chain announced plans to build or convert more than 150 stores and remodel over 650 locations across 47 states to its “Stores of the Future” concept. These locations focus on a seamless omnichannel experience, expanded product selections, QR codes for digital engagement and enhanced pick-up and delivery options.
Walmart fashion has dramatically altered its image with exclusive lines including Free Assembly, Scoop (benefitting from Lady Gaga’s former fashion director Brandon Maxwell’s designer input); labels like No Boundaries targeting Gen Z; and brands like Levi’s, Reebok, Champion and Sofia Vergara to choose from.
The company beefed up its same-day delivery and curbside pick-up network, integrating with social commerce platforms like TikTok Shop, and launched “endless aisle” tech in stores, letting customers order online-only items from in-store kiosks.
Experts are overwhelmingly optimistic about Walmart’s 2026 prospects as John Furner takes the helm as President and CEO of Walmart Inc. Analysts at Jefferies and UBS say Furner’s focus on “accelerating growth,” optimizing digital and supply chain investments, and maintaining near-term financial stability” suggest the retailer will continue to steamroll the competition.
Shopping mall traffic has been shifting upward for most of 2025, and data suggests the trend will continue in 2026.
A report from Capital One Shopping shows that mall foot traffic in the first half of 2025 was up year over year: Indoor malls saw a 1.8% increase in visits and visit durations rose 3.3% compared with the first half of 2024.
Read what NRF's Katherine Cullen thinks on consumer spending and decoding consumer motivations in 2026.
Optimism for 2026 stems from a convergence of mixed experiences that are transforming traditional retail shopping centers into destinations for entertainment, experience and socialization. There will always be plenty of things to buy at the mall, but the emphasis retailers and brands are placing on creating multisensory destinations is creating buzz.
Netflix House, a first-of-its-kind environment that opened in December at King of Prussia mall in Pennsylvania, epitomizes where things are headed. The venue, which encompasses more than 100,000 square feet, brings some of Netflix’s most popular shows and movies to life — including “Stranger Things,” “KPop Demon Hunters” and the “Knives Out Mystery” franchise — through immersive décor, branded soundscapes and visual storytelling.
Ralph Lauren has brought its signature coffee experience to life through several immersive pop-up activations in 2025. The pop-ups tie Ralph Lauren’s lifestyle aesthetic directly into experiential retail, deepening shoppers’ emotional connection and supporting broader brand storytelling through a fun and accessible — albeit fleeting experience.
In a world increasingly starved for connection, human interaction and new experiences, shopping malls can bring together people and create spaces that are an antidote to screen time.
A Gallup National Health and Well-Being Index survey from earlier this year found that the number of Americans taking weight loss drugs like Ozempic, Wegovy, Zepbound and Mounjaro more than doubled to 12.4% compared with 5.8% in February 2024, when Gallup first measured it.
The good news: The obesity rate dropped to 37% of U.S. adults this year, down from a high of 39.9% three years ago. The challenging implication: It’s altering purchasing patterns across the industry.
In apparel, retailers are adjusting inventory in effort to do a better job of size assortments. Modern Retail reported that apparel companies are shifting to stock more smaller sizes and slightly fewer larger sizes, due to surging demand for smaller sizes among GLP-1 users. And there’s been an uptick in “revenge shopping,” which in this case suggests that shoppers are indulging in “rewards” by purchasing new clothing pieces.
It will be interesting to watch the resale, secondhand and rental niches within the industry as those who have dropped pounds and sizes offload their larger-size wardrobes in favor of updated togs that are not only smaller, but more body-conscious.
The GLP-1 craze has also taken a bite out of the food and beverage industry. A report from Big Chalk Analytics reported that an estimated $6.5 billion in U.S. grocery sales has been lost due to the reduced-snacking behavior of GLP1 users. Meanwhile, CPG brands like Nestlé, Conagra and Danone, and Nissin are quickly bringing GLP1-friendly items to market. And retailers are leaning into the protein craze prompted by GLP-1 users: Kroger launched a protein-focused extension of its private label brand Simple Truth that now includes over 80 high-protein meals and snacks.
That means even more robust hurdles for retailers in 2026. It’s easy to identify Gen Z as digital natives who are socially conscious, diverse and inclusive. And Gen Alpha is characterized as the first generation to be fully raised in a world of advanced technology with a more global perspective, and a penchant for sustainability, inclusivity and social impact.
But the cheat sheet ends there. Each is changing society and shaping future trends in culture, work and social interaction at a blinding pace. One day, they’re all-in on “of-the-moment” fads like Labubus and bag charms, the next they’re craving unscripted, real-world interaction, and a week later they’re using AI to find deals, gravitating toward “dupes” and private-label alternatives. Confused? So are retailers.
Traditional retail playbooks do not apply. Both cohorts expect seamless omnichannel experiences — but integrating physical and digital touchpoints at the level these generations demand is an endless quest to keep up.
Each demand that retailers prove their inclusivity and authenticity, but one slip-up and a brand could be toast. Immersive, in-person experiences capture attention. So do some celebrity and influencer partnerships, but these tend to come with hefty price tags – and if a brand gets it wrong, it will be punished.
Expect this trend to continue in 2026 and beyond. Is there a way to get closer to these younger cohorts? Maybe the answer is to hire them and give them some autonomy. Just be prepared: Multiple data sources show that Gen Z values flexibility and work-life balance and they tend to seek jobs that align with their values. Gen Alpha prioritizes technology, continuous learning and more collaborative work environments when they enter the workforce.
Even some niche social platforms including Discord, Reddit, Bluesky and Substack broadcast channels are winning converts. And don’t count out AI chatbots like ChatGPT and Character.ai, which are also siphoning attention from TikTok.
Expect the shift to be measured, yet signals suggest that both cohorts are looking for small-group environments and platforms that appeal to their longing for smaller, more intimate interactions. They’re seeking authenticity, privacy and control. And, let’s face it, older demographics such as millennials, Generation X and baby boomers have now embraced TikTok, diluting its appeal to younger users. As the TikTok user base skews older, the platform’s overall dynamic has shifted the focus of some content to now include more lifestyle and parenting posts.
Younger cohorts have expressed mixed feelings about social media, particularly its negative impact on mental health and body image, but it nonetheless remains an integral part of their lives. The challenge for brands and marketers in 2026: the need to engage across multi-platform ecosystems, balancing visibility on TikTok with deeper community connections in emerging digital hubs.
Experts agree that trust in artificial intelligence has become iterative. The challenge is that, like any technology that has widespread application for a business, CEOs are hungry to implement and drive change — but CIOs are saddled with tempering the speed of implementation and managing expectations.
AI is not a “flip-the-switch” technology; in most cases it entails a multi-year rollout. Moreover, AI success relies on good and accurate data, a defined business process structure and a blueprint for how it will interface with other systems.
Overall, Gartner forecasts global AI spending to exceed $2 trillion in 2026, growing 36.8% from $1.48 trillion in 2025. Exactly how retailers will break down their AI investments is tougher to predict, though most experts forecast that the lion’s share of capital will go toward customer relationship management and personalization tools that can analyze shopper data to tailor offerings, chatbots and virtual assistants, predictive analytics for demand forecasting, and supply chain optimization.
Talk of an AI bubble may be ongoing but for retail companies, expect sustained demand as they work toward translating initial hype into practical and sustainable applications. Richard Kestenbaum, a partner at Triangle Capital LLC, and a contributor at Forbes.com, recently wrote, “AI isn’t going away, it’s becoming entrenched because the opportunity of it can’t be ignored. Cultural changes are coming … . Any company that doesn’t make the changes will find it increasingly hard to compete … those [that] adapt best and fastest are going to win.”
Agents have changed the way shoppers purchase items online; that transformation will become even more embedded in the year ahead. With the ability for shoppers to ask questions much as if they were face-to-face with an in-store associate, product discovery is becoming more intuitive and the path to purchase is accelerating.
ChatGPT and other AI tools can analyze user preferences and provide a more personalized shopping experience. They can help consumers to find the best deals, compare prices, determine real-time inventory — even assist with various inquiries and customer support. Toward the end of last year, the stakes were raised with the announcement of ChatGPT’s Instant Checkout feature, allowing shoppers to make purchases without leaving their ChatGPT chat window — a move that pushes the power of AI deeper into ecommerce.
Read what NRF's David Johnston has to say on the importance of investing in AI-driven preventative measures.
Where things get dicey is the potential for these shopping agents to reshape influence away from traditional ad-driven funnels toward AI recommendations. As shoppers rely more heavily on AI agents, brand visibility becomes upended. Whether or not a retailer’s brand shows up will depend on AI optimization — not just SEO or paid ads — flattening long-standing competitive advantages.
Another cautionary note: Guardrails are non-negotiable for safety, compliance and trust. Agentic AI systems act independently, making decisions across multiple steps and integrated systems. That rachets up risk levels. Another potential risk: the possibility that a malicious actor could inject harmful code into an AI platform.
The three are inseparable as consumers look for brands that tell authentic stories using technologies like AI and hyper-personalization to get a clearer picture of the opportunities that lie between intent and action.
Much of the spotlight for 2025 was on how agentic shopping agents upended traditional search. Experts foresee these agents driving even more product discovery and purchases in the coming months, with Forrester research predicting that one-quarter of shoppers will use specialty retail chatbots in 2026.
The past year has catapulted retail marketing into the headlines with winning campaigns including Gap’s KATSEYE K-Pop dance ad, Duolingo’s stunt announcing Duo’s “death” and Apple’s “Great Ideas Start on a Mac.” But there were several clunkers too, including Cracker Barrel’s logo snafu and Arc’teryx’s controversial fireworks.
What does this mean for 2026? Cultural sensitivity and social-first thinking are imperative. Companies need to tell stories that amplify their products, resonate with the brands’ audience and invite participation across social platforms. Opportunities will abound in the next 12 months as tie-ins to big cultural events like the Winter Olympics, the FIFA World Cup and the nation’s 250th birthday.
Industry watchers cite tough profitability mandates, restlessness with tech transformations and changing consumer habits at the crux of many swaps.
As of late October, Challenger and Gray reported 41 CEO exits at retail companies, a 116% increase from the 19 during the same period in 2024. That makes retail the top industry for CEO turnover in 2025 — and that predates the CEO announcement at Walmart and word that Calvin McDonald is stepping down at Lululemon.
The changes were a mix of successions and forced exits, and not all were performance-driven. Still, there’s a sense that boards are looking for different skill sets including expertise in delivering faster margin improvements, greater pricing prowess and deeper tech chops.
Some executives stepping into the CEO role in early 2026 include Kruti Patel Goyal, Etsy’s current president and chief growth officer, who will become CEO effective Jan. 1, 2026. Also on Jan. 1, Dayna Quanbeck will succeed Jenny Ming as the chief executive officer of Rothy’s. Michael Fiddelke will become the new CEO of Target on Feb. 1, 2026, and industry watchers expect Kroger to announce a new CEO in the first quarter.
