Shoppers are changing fast – and so is the retail landscape. From AI to loyalty to store design, these are the trends set to define 2026.
If there’s one thing savvy retailers know, it’s that nothing stays still for long – and 2026 will be no exception. AI is rewriting how products are discovered and purchased, while consumers are redefining what value looks like – and expectations are rising across every touchpoint.
For merchants, 2026 is a year that will demand agility and reward those who flex early.
Here are six trends that will define retail in 2026, plus tips to stay one step ahead.
AI-driven effortless discovery
AI isn’t new to retail, but in 2026 it’s likely to transform product discovery. That’s because consumers are increasingly turning to generative AI for shopping ideas and product comparisons. In fact, shopping-related searches on generative AI platforms grew 4700 per cent between 2024 and 2025. In the future, AI agents could even transact on shoppers’ behalf.
What does that mean for retailers? Search engine optimisation (SEO) must be supplemented by generative engine optimisation (GEO) so that brands and products are discoverable by large language models (LLMs) like ChatGPT and Claude, and also surfaced in AI summaries.
That means investing in structured product data, richer content, and testing using AI-powered recommendation tools, advises Trent Rigby, director at Retail Customer Advisory. It might also mean prioritising third-party content, since reviews and blogs make up around 80 per cent of the sources that AI uses1.
“The biggest shift retailers need to understand is that algorithms, not customers, will increasingly decide which products surface first.”
Trent Rigby, Retail Customer Advisory
“The biggest shift retailers need to understand is that algorithms, not customers, will increasingly decide which products surface first,” says Rigby. “Think of it as the retail version of the TikTok 'For You' feed: algorithms increasingly decide which products surface first, based on behaviour, content and intent.”
Premium budget boom
Cost-of-living pressures haven’t stopped consumers from spending – but they have reshaped the way they spend, with value now more important than ever.
The shift has accelerated the rise of the private label, which is no longer seen as a budget option but as a credible, trustworthy and now even celebrated alternative. One study found that 95 per cent of Australians are open to embracing store-brand products, and major retailers such as Woolworths, Coles, The ICONIC and Bunnings are investing millions into private label expansion.
“Private label has matured from a value play into a powerful driver of loyalty, trust and margin,” explains Rigby. “High quality private label brands let them feel like they're getting 'premium without the price tag.”
His advice for anyone wanting to play in the private label space: “Treat (it) like a true brand – with brand investment, design, storytelling and quality that can stand on its own.”
Brick-and-mortar stores as brand-building spaces
The role of the physical store has been in a state of flux for years, and in 2026 stores will play an increasingly important role in brand building, according to experts.
“Physical stores are becoming the place customers go when they’re ready to feel something or decide something.”
Matt Newell, The General Store
“As online shopping gets more task-focussed, physical stores are becoming the place customers go when they’re ready to feel something or decide something,” explains Matt Newell, partner and CEO at retail agency The General Store.
“Heading into 2026, the most successful retailers are treating their spaces as high-intent stages for brand, community and service. Think Vans turning flagships into skateparks after hours or Selfridges programming its stores like cultural venues, not showrooms.”
Newell says what matters most is understanding that square metres now work hardest when they’re curated, data-informed and experiential – not just stocked. His advice: “Try picking one clear ‘hero role’ for your store (like try-ons, education, events, repairs, community) and design a signature in-store experience around that – then measure it as rigorously as you measure transactions.”
In practice, that may look like measuring things like dwell time, repeat visits, conversion from foot traffic, event participation or post-visit sentiment – metrics aligned to the ‘hero role’ you’ve chosen.
Think experiential
That appetite for real-world moments doesn’t stop at stores. In 2026, experiences will only become more important to consumers, who are increasingly choosing connection accumulation.
Blame tech fatigue, burnout or a post-pandemic shift in values, but consumers are increasingly searching for meaningful experiences. Just look at the travel industry, which is projected to grow at an annual rate of 5.8 per cent through 2032 – more than double the pace of overall economic growth.
“In this world, product-only propositions feel thin; the brands winning are the ones wrapping goods in rituals, communities and culture.”
Matt Newell, The General Store
“In this world, product-only propositions feel thin; the brands winning are the ones wrapping goods in rituals, communities and culture,” explains Newell.
For online retailers without a physical store, this means finding ways to create ‘experience touchpoints’ without a brick-and-mortar base. That could mean partnering with complementary brands for local pop-ups, hosting virtual product how-to events, building member communities, or simply leaning into experiential marketing messaging. Polaroid did a great job of tapping into this desire recently with their ‘AI can’t generate sand between your toes’ campaign.
“Retailers need to recognise that the memory around the purchase is now as important as the purchase itself. A simple first step is to build one repeatable experience platform around your brand (monthly workshops, member nights, local collaborations, creator events) and treat it as a core product line, not an add-on.”
Circularity becomes commerce: Resale, repair and responsibility
Sustainability has shifted from a marketing message to a commercial expectation. Just look at the secondhand fashion and luxury market, which is forecast to grow two or three times faster than the first-hand market through to 2027.
“We're seeing growth of sustainability as a key purchase driver for those older segments (Baby Boomers).”
Trent Rigby, Retail Customer Advisory
“Whilst sustainability was once thought of as a more 'Gen Z' or younger generation movement, we're seeing growth of sustainability as a key purchase driver for those older segments (Baby Boomers), particularly as they have the resources to shop more responsibly, which we expect to see continue throughout 2026,” explains Rigby.
“At the same time, tightening sustainability and circular economy reporting requirements - from product level traceability to mandated emissions and waste disclosures - are pushing retailers to treat circularity as a core commercial capability, not a side project.”
His advice: “Make circular options easy. Integrated resale, simple repair flows, transparent product information and incentives for product longevity.”
Newell agrees, adding: “The key mindset shift is to see circularity as a design and business model question, not a marketing claim. A practical move for most merchants is to launch one revenue-linked circular offer – a trade-in program, a refurbished range, or a simple repair service – and build it into the core customer journey rather than hiding it in the fine print.”
The new loyalty equation
Points alone no longer build loyalty – and in 2026, simply having a loyalty program isn’t enough. With most shoppers now juggling multiple memberships, the ones that actually drive engagement must feel relevant, dynamic and deeply personalised.
Customers want brands to recognise them across channels, anticipate their needs and clearly explain how their data creates value in return.
They also expect variety – from cash-back and friction-reducers to meaningful experiences, community access and gamified moments that feel fun rather than transactional. And thanks to AI, retailers can finally deliver this at scale, using real-time customer behaviour to tailor offers, content, thresholds and reward for individuals rather than segments.
Moving into 2026, loyalty is morphing from status ‘earn-and-burn’ model to real-time, individualised journeys that blend usefulness, recognition and delight.
“The programs that win in 2026 won’t just reward transactions, they'll create moments, privileges and access that makes customers feel part of something bigger,” explains Rigby. “Think concierge-style services, early access, community events and brand-led experiences that deepen emotional connection.”
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