My predictions for retail in 2026: why AI adoption becomes unavoidable, not optional

I don’t believe AI will replace good retail.

I do believe that 2026 will be the year when retailers who don’t adopt AI meaningfully find themselves running a more expensive, more pressured version of the same business as their competitors.

That distinction matters.

This is not about jumping on a tech trend or trying to look innovative. It is about cost, margin, sustainability and the ability to continue delivering good customer experience in a market that is becoming less forgiving every year.

What follows is my view, as someone working closely with independent and multi-channel retailers, on why I think 2026 will force the issue.

I don’t think 2026 will offer retailers the luxury of waiting

By the end of 2025, AI adoption across retail was still uneven. Some businesses were using it daily and quietly. Others were experimenting. Many were watching and waiting.

I don’t think 2026 will allow that wait-and-see approach.

Not because AI will suddenly be “perfect”, but because the cost of not using it will become increasingly visible.

Retailers are heading into 2026 with:

• Ongoing margin pressure
• Rising staffing and employment costs
• Customers who expect fast, accurate, human service
• More channels to manage, not fewer

Recent UK Budget decisions have added to that pressure. Frozen tax and National Insurance thresholds continue to create fiscal drag. Employer National Insurance remains a material cost. Wage expectations have risen, even where consumer spending power has not.

All of that means the background cost of running a retail business is higher than it was a few years ago, and unlikely to come down quickly.

In that environment, continuing to run large parts of the business manually is no longer neutral. It is a competitive disadvantage.

Why AI matters in 2026: this is a cost-structure argument

I think one of the biggest misconceptions about AI in retail is that it is primarily about customer-facing tools.

In reality, the biggest impact in 2026 will come behind the scenes.

If you are still:

• Writing every email campaign from scratch
• Producing social content entirely manually
• Drafting and updating product content by hand
• Pulling reports and interpreting data manually
• Forecasting stock largely on gut feel or manually pulling figures together
• Asking customer service teams to answer repetitive queries unaided

Then your cost per task is higher than a retailer using AI to support that work.

Those activities are not unimportant. They are essential.
But they are also time-intensive, and increasingly supported very well by AI.

Over the course of a year, the difference compounds.

Retailers using AI effectively will:

• Produce more with the same team
• Respond faster
• Make decisions with better information
• Free up time for work that genuinely requires human judgement

Retailers who don’t will still be doing the same work, but at a higher cost.

That gap shows up in margin, speed, consistency and ultimately in how much can be invested back into people and customer experience.

This is not about replacing people. It’s about protecting them

I want to be very clear on this point.

I do not believe AI should replace good retail people, good marketers, good merchandisers or good customer service teams.

I do believe AI can reduce the volume of routine, repetitive and execution-heavy work those teams are expected to carry.

The risk in 2026 is not that retailers automate too much.
It is that they fail to automate, and instead ask already stretched teams to absorb more work as costs rise elsewhere.

Retailers who don’t adopt AI don’t become more human.
They become more stretched.

Used well, AI allows humans to spend more time on:

• Advice and expertise
• Relationship-building
• Problem-solving
• Creative judgement
• Delivering the kind of service customers still value deeply

That is enhancement, not replacement.

Why this applies to everyone, not just “big” retailers

I don’t see this as a divide between:

• Big vs small
• Ecommerce vs high street
• National vs independent

A single-store independent writing their own marketing, managing stock manually and answering every customer query personally faces the same structural issue as a larger business: time and cost are finite.

The difference in 2026 is that AI tools are no longer locked behind large budgets or technical teams. They are:

• More accessible
• More affordable
• More integrated into everyday platforms

The barrier is no longer technology.
It is confidence, clarity and willingness to change how work gets done.

The pace of change is exactly why waiting is risky

One of the most honest things I can say about AI is this:
I don’t think it’s possible to imagine accurately where it will be in twelve months.

A year ago, I could not have predicted where the tools are today. The pace of progress has been that fast.

What I can say is that we will almost certainly be further forward:

• Tools will be more capable
• Accuracy will improve
• Integration into retail platforms will deepen

Those are informed hunches, not guarantees.
What I cannot imagine yet are the tools that don’t exist or aren’t visible today.

And that’s the point.

Retailers don’t need perfect foresight. They need to start building familiarity, confidence and capability now, rather than trying to catch up later when the efficiency gap is already open.

How I think retailers should approach AI in 2026

If I were advising a retailer heading into 2026, I wouldn’t start with flashy customer-facing AI.

I would start with:

• Marketing production and planning
• Reporting and performance analysis
• Stock forecasting and buying support
• Customer service triage and response support

Not to remove people, but to reduce background cost and pressure.

That is where AI helps offset rising employment costs, National Insurance, and the broader cost increases we’ve seen reinforced through recent Budgets.