Retail is in a tough spot: economic pressure, rapid tech change, and customers who are harder to read than ever. After dozens of conversations with executives, fresh consumer data, and time on the floor at events such as NRF, CES, and vendor showcases, here are my three takeaways for retail in 2026.

  1. The consumer environment is worse than March 2020.

Yes, there is more uncertainty now than at the beginning of the pandemic. By this time in 2020, governments had already decided to flood markets with massive stimulus. Now, however, between global conflict, weak consumer sentiment, the impact of tariffs, and worry about jobs (or the lack of them) in an AI economy, it’s what we can safely call “peak ambiguity.”

The retailers best positioned to survive are the biggest ones sitting on cash. The ones most at risk? Those carrying heavy debt or owned by private equity. When you’re constrained, you can’t invest and you can’t pivot. Expect more retail bankruptcies in 2026 — and likely into 2027.

  1. Traditional Google search is being disrupted.

How shoppers find products is changing faster than at any point since Google became a verb. Generative AI tools are becoming real starting points for product research. But it’s not just the answer engines. TikTok and other social platforms are capturing more early-stage discovery, especially among younger consumers.

But here’s the catch: Discovery is not the same as purchase. My colleague Emily Pfeiffer and I concluded as much, as this was likely the reason that OpenAI seems to be backing away from a “buy button” and relinquishing the sale to retailers and “app commerce.” As Google, Meta, Microsoft, and Pinterest have all learned, it’s hard to be a retailer. It’s easier to be an advertising engine for them.

  1. The agentic AI solutions that work will be back-office-facing.

The most significant AI transformation in retail right now isn’t happening to shoppers. It’s happening behind the scenes to the retail executives that support shoppers. Retailers are deploying agentic AI across operations, as we featured in our 2026 Innovators Showcase report: generating marketing emails, powering onsite search, building creative assets, optimizing product data, improving QA, gathering field feedback, running computer vision in warehouses, and forecasting trends.

None of this makes headlines. But it’s where the real ROI lives. When retailers ask us which AI investments are worth it, this is the answer — not the flashy front-end stuff but the tools that quietly eliminate inefficiency and help teams respond faster.

Net-net: Be wary and wise; invest in shiny new objects with caution.

2026 will be tough. It will be marked by retailers trying to balance tight checkbooks while facing the constant temptation of shiny new objects. Commerce firms need to resist the worry that they are missing out. Banish FOMO! Wait for more visibility on the new formats and tools that shoppers actually use. Pay attention, but don’t invest in any paths that have the possibility of being the wrong ones for your business and customers. Overinvesting in the wrong place this early is one of the worst mistakes anyone can make while the world is in havoc. The retailers that jumped into NFTs and cryptopayments following the pandemic learned this the hard way. Unlike large tech companies with forgiving investors, traditional retailers don’t have as much slack.

Forrester clients can book a guidance session or inquiry to go deeper on the outlook for retail.