Industry executives and experts share their predictions for 2026. Read them in this 18th annual VMblog.com series exclusive.
By Alex Persson, CEO, Privy
If 2024 and 2025 were the years AI dominated headlines, then 2026 will be the year small retailers finally feel what all the enthusiasm is about.
For the first time in modern retail, size will no longer determine who has access to the best technology. Instead, AI will begin to flatten the landscape giving independent retailers the same intelligence, capabilities, and personalization power that enterprise brands once treated as an exclusive advantage.
This shift won’t happen because small retailers suddenly have bigger budgets. It will happen because AI is finally becoming simple, ambient, and usable — the kind of technology that quietly works in the background, not another dashboard demanding attention. And that is exactly the form of AI that small businesses have been waiting for.
Below are three predictions for how AI will reshape the retail business in 2026.
1: AI Becomes Invisible:
The most meaningful AI in 2026 won’t announce itself with complicated settings or hundred-page tutorials. It will sit behind the scenes, doing the work retailers never had time for.
Generative AI made a splash, but retailers want something more practical. They want technology that nudges, recommends, and automates the obvious so they can stay focused on customers and product.
Retailers don’t want to be machine-learning experts, and in 2026, AI will feel less like a tool and more like an assistant, writing the first draft of a message, identifying which customers are at risk of churning, or timing outreach precisely when someone is most likely to convert.
This mirrors what larger retailers have had for years. As McKinsey notes, companies that lead in personalization generate 10-15% more revenue than their peers, and AI-powered engagement adds another 5-8% on top of that. Small retailers have never had access to that level of intelligence — until now.
2: Relationship Marketing Makes a Comeback
For decades, the best small retailers won through relationships. They remembered names, preferences, stories. Then commerce moved online, and much of that intimacy evaporated.
AI is quietly bringing it back.
In 2026, relationship marketing becomes scalable because AI can now surface insights and tailor communication with almost no effort.
In that same report, McKinsey found that 71% of consumers expect personalized interactions and feel frustrated when they don’t receive them. AI is becoming the bridge between that expectation and what small retailers can realistically deliver.
And the irony is unmistakable that AI isn’t making retail less human. It’s making the human parts of retail possible again, because it removes the repetitive work that gets in the way of real connection.
Prediction 3: High-Growth Retailers Become the Most Agile
For years, growing retailers were told they needed enterprise-grade marketing stacks to compete. This often leads to overinvesting in tools they barely use, chasing the same complexity typical of larger brands. In 2026, the opposite will be true.
Large retailers are increasingly bogged down by their own data. Information that lives in silos means marketers are left to drown in fields and dashboards, and personalization slows to a snail’s pace.
Retailers who succeed will run fewer tools, automate the repetitive, not the meaningful, make every message count, and spend their time on creativity, not configuration.
The future belongs to retailers who use AI to think more clearly, not those who stack more software. The smartest retailers I know already operate this way. They are skeptical of hype cycles, apprehensive of complexity, and deeply focused on what matters: product, community, and customer experience.
AI rewards that mindset by giving them leverage, not noise.
Where 2026 Takes Us
In 2026, the divide between small and large retailers doesn’t disappear but it will matter far less. The intelligence gap narrows. The personalization gap shrinks. The operational burden gets lighter.
AI becomes the great equalizer, giving every retailer access to capabilities that were once locked behind enterprise platforms.
The future isn’t about retailers getting bigger, but rather retailers getting smarter, faster, and more focused on the human work only they can do.
Small retailers finally get the advantage they’ve always deserved.
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ABOUT THE AUTHOR
Alex Persson is the Chief Executive Officer of Privy. Prior to this role, Alex was Chief Executive Officer and President at WeCommerce from 2020 to 2023. Experience also includes a tenure in private investing at Jefferies from 2016 to 2019 and at Leucadia National Corporation in 2013. Earlier, Alex worked at Jefferies in strategic planning within the Office of the President from 2009 to 2013. Alex holds a Master of Business Administration (MBA) from Stanford University Graduate School of Business and a Bachelor of Science degree from the University of Virginia.
