Marketing collaboration firm Encodify presents four trends that will help shape retail in 2026

We have spent the later part of 2026 mapping the challenges of retail operations. Our survey spans retail operations professionals in both the UK and continental Europe. While you can still help us by filling out the survey, we’re also starting to see some trends in the data, and we’re going to share these trends with you in this article.

So, in this article we’ll discuss some of the trends and challenges that will shape retail in 2026. The challenges described are based on the responses we’ve already seen, and we’ll be discussing everything from content automation and AI to sustainability and online grocery concepts.

1. Content automation will be a top priority for retail marketing teams in 2026

If your work includes promotions, marketing content or content creation in general, there’s a good chance you’ve asked to see if generative AI solutions and content automation would be a way to create more content faster and cheaper. But so far the companies who have succeeded with content automation are few and far between.

Sure, in the past year we’ve seen an explosive growth in the amount of AI generated content that is published on the internet, but during our survey on the challenges of retail operations we still see content automation as one of the most frequent answers, which is often due to the quality of AI generated content.

Essentially, while AI can be used for content automation purposes, most of the efficiency gained from using AI to generate content instead of having humans create it, needs to be put back into editing and proofing that same content.

As Senior Lecturer and AI Researcher Jaro Krieger-Lamina from the Austrian Academy of Science (Östereische Akademie der Wissenschaft) put it: “The big problem is the tendency of AIs to ‘hallucinate’ and invent ‘facts’. AI systems can generate text that sounds plausible but conveys false information. That is why their field of application is still limited today.”

In the past we’ve seen AI attempt to sell cars for $1, we’ve seen it promise discounts to customers that they weren’t eligible for, and we’ve seen retailers receive backlash for using AI to generate product images.

While the challenge of content quality and information accuracy seems to be the main challenge when it comes to content automation, the real challenge isn’t automating content creation anymore. With generative AI driving so much content, we are pushing the challenge of content generation to proofing and editing.

2. Collaboration with small suppliers and local manufacturers is going to grow

The desire to support local manufacturers and purchase locally is in no way a new one. But over the last year we’ve seen the trend of buying local grow into what can almost be described as a disruptive motion.

In a global survey by McKinsey, 47% of consumers identified local ownership of the companies they purchase from as being important to their purchase decision.

The survey uncovers a few different factors related to this:

●      36% say they want to support domestic businesses

●      20% say local brands are a better fit for their needs

●      13% say domestic brands are more affordable

●      42% of European consumers cite a poor perception of American brands as the reason.

While this is good news for smaller retailers, manufacturers, and brands it also means that bigger retailers will have a much higher bar to clear, if they want to be successful beyond their core markets.

And as new global trade agreements begin to take shape, we predict to see a continued evolution of this trend going into 2026.

3. Sustainability & responsibility is as important as ever

Looking at Europe, we expect that the subjects of sustainability, responsibility, and compliance are going to be even more important as we go into 2026. This is in part due to the consumer desire to purchase sustainable products, the real reason we expect this is new regulatory requirements.

In 2026 many European countries will move down the PPWR timeline, as many of the requirements of the PPWR will kick in August of next year.

At the same time the Ecodesign for Sustainable Products Regulation (ESPR) and similar regulatory initiatives will mean an increased focus on everything from reducing packaging waste to minimizing greenwashing claims and a broader implementation of Digital Product Passports.

4. Consumers will continue to support online grocery concepts

The fact that consumers increasingly choose to make grocery purchases online is evident, and while the lockdowns of early 2020’s undoubtedly had an impact on this development, the growth in online grocery sales started well before the pandemic, and it has continued to grow in the years that followed. In 2026, global online grocery sales are expected to cross $1 trillion.

Year	Online grocery sales worldwide	Annual change
2017	$133.5 billion
2018	$159.4 billion	+19.4%
2019	$197.8 billion	+24.1%
2020	$317.6 billion	+60.6%
2021	$449.2 billion	+41.4%
2022	$516.3 billion	+14.9%
2023	$633.2 billion	+22.6%
2024	$770.9 billion	+21.7%
2025	$924.7 billion	+20.0%
2026	$1,038.7 billion	+12.3%
2027	$1,137.0 billion	+9.5%
2028	$1,240.0 billion	+9.1%
2026	$1,347.0 billion	+8.6%

While we see 100% online grocers, like Danish Nemlig.com and German/Dutch Flink, many traditional retailers have also been expanding their operations to support online grocery shopping. British Tesco has expanded their physical stores with online orders and delivery, while Danish border shop Fleggaard now offers Click and Collect shopping.

If you want to see a more comprehensive list of retail trends that will drive the focus for next year, you can find one in the article The future of retail: Retail trends that will shape retail in 2026 which is available on the Encodify website.

Want more?

The trends we’ve discussed in this article comes from our survey on the state of retail operations.

If you haven’t already done so, we urge you to participate in our survey. It only takes five to ten minutes, and when you submit a response, you can also choose enter our monthly prize draw, sign up for an in-depth interview which dives even further into your challenges working in retail operations, and after the survey ends all results will be anonymised and published in a report on the state of retail operations, which will of course be sent directly to you.