The Modern Retail Podcast's 2026 predictions

0:09Hello and welcome to the Modern Retail Podcast, our show that covers the ways the retail industry changing and modernizing. I am senior reporter Gabby Barco. I'm here with Melissa Daniels and executive editor Anna Hensel. How are you two? Good. Ready to talk 2026. 2026 is going to be our year. I can feel it. I love that. Yeah. Happy New Year from the Modern Retail team. We're ready to go. Yeah, so if you can't tell by now, today we are hosting our 2026 Year Ahead episode. It's become somewhat of a tradition, but we're basically going to be previewing what we think is going to be happening in the next year in retail and making some bold predictions and then coming back next year and see if they come true.

1:01But yeah, let's highlight the topics that we're going to be going over this year. First up is AI, of course. That's going to continue to be a big topic. We are also going to be talking about what the creator economy is going to be bringing. A lot of shifts over there. And then finally, we're going to talk about what's ahead for M &A. That's been in full swing recently. So yeah, we'll talk about what we expect and what brands we're watching on that front. So first up, AI. Ana, do you want to kick us off? Yeah, we can't talk about what's going to be popular in retail without talking about AI. So using shopping for AI is only going to become more popular in 2026.

1:48I think that that is a given. but I do predict that people will start to use it maybe less for things like gift giving or style suggestions unless there's some big change or improvement to the current technology. But I do think people will continue to use it more frequently for things like price comparison and scouring reviews. So it's really interesting. We know that more people are using AI to shop, But estimates vary widely, honestly, even wider than I expected before I did research for this segment. And things are changing quickly. So according to a Deloitte survey, 33 % of U.S. consumers surveyed said they plan to use AI for their upcoming holiday shopping, more than double what it was in the same survey last year.

2:42and 26 % said their comfort levels with generative AI were higher than they were six months ago. Salesforce, for its part, said it expects AI to drive$263 billion in global online holiday sales this year, representing 21 % of all holiday orders. But you know, when I talk to brands, and to be fair, I do have a tendency to cover startups, more mid-market brands. When I talk to them, they say they're still not seeing too much of a traffic spike from ChatGPT. They did see a really big spike leading up to Black Friday. But I'm very curious to see how this all shakes out next year. So, Gabby, Melissa, what are you hearing for brands about just what kind of traffic they're seeing from ChatGPT?

3:32Well, I would echo what you said about smaller and mid-sized brands not necessarily seeing too much of a traffic spike. directly. That said, I think everyone is still thinking about how chat GPT and other AI services are going to talk about them. So even if it's not like a one for one traffic spike, I think people still want to make sure that their companies are, you know, named in the conversation, even if they're not linked out to. Yeah. What about you, Gabby? Yeah, I think on a similar note, in 2025, I felt like the big conversation was, how do we get surfaced in the results when somebody's asking, like, what's the best foundation for dry skin?

4:14You know, they're asking their chat bar or whatnot. And so we saw the rise of GEO, right, which is sort of now replaced SEO. And so that felt like a little bit of trial and error. And it felt like just when some brands felt like they got a handle on that, then you had the big announcements of the express checkout that OpenAI announced with the partners like Shopify, like Walmart. So that kind of brought us to the end of the year where, yeah, I felt like that happened a lot faster than I was predicting, to be honest. But yeah, it doesn't surprise me that 2026 is just going to be like a big onslaught of the checkout race.

4:55Yeah. I mean, outside of how brands are surfacing on these kinds of tools, I'm almost more interested in how they're putting AI on their own sites and within their own customer journeys. I feel like that is going to be a huge thing this year because we are all getting more comfortable with it in some ways. And so what kind of tools are they going to be putting out for shoppers to use? And how will that evolve? I also feel like there's the customer service aspect of AI is just going to like go go crazy like I was actually dealing with a return and I'm fairly certain I was texting with you know an AI chatbot of some kind yeah yeah that's crazy yeah um I think yeah the interesting wrinkle in all this is just we are going to see more tools next year and like we don't quite know how adoption of all of those will shake out so just a list of some of the new tools we saw just this year.

5:53OpenAI launched instant checkout in September. OpenAI also released a new tool in November within ChatGPT called Shopping Research, which is designed to more easily consolidate product research and recommendations into one place. So it's just showing that they're thinking about shopping more. And then Target also rolled out a shopping app within ChatGPT just in time for Black Friday. So we'll only see more retailers, I think, launch dedicated shopping apps within ChatGPT next year. But a lot of these tools are still relatively new. And I feel like some kinks need to be worked out. And like I mentioned, the one thing I'm really interested in is like, what type of queries do people post to these AI engines?

6:44What type of things do they use them for? So I talked to Profound, a marketing company that helps brands create AI-optimized content, and they were doing some research on what people were searching for ahead of Black Friday. And a lot of it was the really basic, like, does X brand typically have a Black Friday sale and looking at how the price of a product might have changed recently. So I definitely think that people will continue to use AI for that. It was interesting. They also did some research on like in the beauty category, what were some of the most recommended suggestions ahead of Black Friday?

7:26And a lot of it was like gift kits. So Kiehl's holiday gift sets. And I think it just goes to show that like chat GPT often just sticks to the basics when it comes to gift recommendations. So Gabby, Melissa, I'm curious, have you guys used chat GPT or Gemini or anything else for like gift suggestions or even just product ideas? Yeah, I have played around with it. Not too deeply, but I also saw a lot of screenshots of other people posting. It does feel like, to me, it takes me back to like very basic listicles from like 10 years ago, where it's like, like best gift for a teen girl. And it'll give you like a bunch of, you know, like rare beauty glossier products that are just like very surface level suggestions.

8:17So I do wonder whether, of course, it's very early, but I think for somebody who really wants to go deep into discovery and really want something unique, a unique product on the web, to me, that feels like it's still early days. So I do wonder whether that's going to kind of be on the back burner until they figure out just the database that it can pull from. Yeah, I was in an early consideration phase, let's call it for a new computer for our house. And so I thought it would be helpful to maybe ask chat GPT for some recommendations based on what I was looking for and what our needs were. And it didn't really answer it for me.

9:01It kept giving me things that were kind of not what I wanted to see out of my price range and didn't really fit the parameters that I was trying to input it for. So I left that exchange feeling a little like, I actually think I'm just going to go back to a good old Google search and maybe some actually expert human reviewed listicles as they were. Yeah, just one funny anecdote I found while researching for this segment. There was a CNBC article that came out in December about the AI shopping opportunity. And there was a quote from a woman who tried to use chat GPT to help her build a capsule wardrobe.

9:41And it kept serving her boring basics. And this quote from her read, it just became almost like talking to a demented grandmother where you're just constantly trying to remind it, OK, I really want something that is in this price range. No, this is too expensive. Please stop sending me this. so that just was very funny i think people sometimes can get frustrated with these ai engines for seemingly not listening to their parameters um the article did quote some people who had fun using chat gpt for holiday shopping so there definitely will be people continuing to use it but like one thing i'm wondering is so it seems like when i scour sites like reddit now everybody is claiming if there's like cringe copywriting or like brand art that seems off, they're like, AI did this.

10:37Everybody's blaming it on AI. Will there be like AI cringe gifts next year? Like this is the thing chat GPT keeps recommending and everybody knows it. Like that's the thing I'm wondering. But yeah, I think more people will use AI next year for shopping. That's pretty much a given. But the company that will really win is whichever one can better crack what people want out of gift giving and like style recommendations. So you're saying like, we're gonna already develop sort of go to recommendations that everybody can trace back to those suggestions. Like I'm just thinking about that's what I'm thinking.

11:16It's like, oh, there's like that one couch that wire cutter recommends that like half your friends have, like you always know like, oh, that's like the wire. The IKEA lack table comes to mind. Yeah, I do wonder, but like, are those going to be winners or are they going to quickly become sort of dated or cringe as you put it? I mean, probably both. Like there'll probably be a period where those products really win. They see a huge sales bump and then eventually will become cringe as most things become. Ana, you brought up the ad copy. And I was kind of curious, just as a sidebar, to ask you guys about, of course, we all cover marketing pretty heavily.

11:57There's already a lot of backlash about what people are perceiving to be AI-generated ads. I think that McDonald's commercial comes to mind. That was like a really big scandal where people just did not like that, you know, AI ad, quote unquote. So yeah, I think the consumer already being very, very hyper aware of it. And then the art just not being there yet, as we all can tell, is very interesting to me because when you talk to the artists and illustrators, they'll tell you that they are using them as tools, but not necessarily to do their work for them. But I don't know where we're going to be in a year.

12:34Yeah, I don't know what to make all of all of it because I do see people claiming that things are AI and I'm like I don't think that's AI I think that just was like a human who's maybe not good at their job yeah because they're usually referring to generative AI right like as chat GPT yeah I don't even know yeah it's crazy it's the wild west out there well on this note though of thinking about how people are discovering products and figuring out where they shop. I see even more changes for that this year when we think about the creator economy. So that's a big space I'm going to be watching this year.

13:15I'm totally fascinated by the rise of influencers and the way that we use social and creators on social to affect what we buy. But I think the overall growth in creator economy is going to mean different things for different brands. It kind of depends how big you are, how long you've been around, how many resources you have. And then on the consumer side, I mean, I'm just kind of anticipating I'm going to be bombarded with even more product placement and seeing influencers everywhere. And I think this is kind of happening at the cost of other advertising, right? Just to kind of set the table, I gleaned a lot of insights from this conversation on the state creator marketing report from Creator IQ.

13:57And they're saying that the average annual influencer marketing budget is already up 171 % year over year. Similarly, nearly two-thirds of new creator spend is being reallocated from traditional paid and digital channels into creator marketing. So, Gabby, Ana, when you all have been talking to brands about their 2026 marketing plans. Does influencer marketing come up? Is working with creators something you're hearing more and more about? Yeah, I mean, I feel like this is not new, right? Like this has been happening for a while. But I am curious about this reallocation aspect, which is, yeah, taking something from maybe out of home or meta or any other channel and putting it here.

14:43Although I'm curious to hear like what their definition of creator marketing is or advertising because that could I feel like that's a big range now right it's not just like a youtuber plugging a promo code anymore that could be somebody selling live on tiktok or um you know uh what I call like a non-influencer influencer um I did a story last year about brands really tapping like like not people who aren't professional creators to speak to their product. So like Broadway dancers, Pilates instructors, you know, this has become a really big trend the past year because it's deemed more authentic.

15:23But all of that still costs money. So I do wonder whether they're baking all of that into that budget. Yeah, the thing I'm really interested in, in regards to influencer marketing is like, I think it's becoming more important because, and this kind of relates back to the AI conversation, but it's like the ways in which people discover products are changing. so I feel like a lot of brands are still struggling to figure out like what are the authoritative sources that people trust and I feel like they're spending a lot of time digging into their influencer strategy and like trying to figure out okay like what are these few influencers that really move the needle for us who is like a true fan which of these feels authentic and that's what I feel like we're going to see brands focusing on a lot more in 2026.

16:14Yeah, I think those are both great insights. And on the concept of, you know, who to work with in that more traditional brand and influencer relationship, you know, one thing that I've noticed is that brands really want to cultivate that long-term relationship with influencers and have someone that they know is a true fan of the brand who can, you know, kind of be there for whenever they have a new product, when they have different launches, that kind of thing. But then is there also sort of a law of diminishing returns there? Because that influencer just has, you know, a loyal following who continues to see their posts and you're not necessarily reaching any new customers or not really driving any acquisitions.

16:56So there's so many layers to this. One thing, though, that I think we're still going to continue to see is this emphasis on, as Gabby mentioned, the non-influencer influencer. And people who maybe have a social following but aren't necessarily in it for the product promotion game and to get affiliate and that kind of thing. And that's where I think we start to see some really creative gifting and seeding strategies. One thing that I thought was funny was that I talked to the oral hygiene brand Nobs. And they were specifically coming out with a travel size. and they told me that even though they thought it would be a fun way for people to try the product and to sell, they really did it to improve their gifting and seeding because they were really running up against it, setting out full jars of their products to influence their difference.

17:45That's fascinating. Yeah, people talk about seeding a lot, but I'm like, that's still a lot of products. And if you're not profitable yet, that's a lot of margin to give up. Yeah, for startups, you can't just like give away cases of your product every month and expect it to work. Yeah. I'm also curious about, you know, this channel really getting not taken over quite, but sort of infiltrated by the bigger brands. I feel like it's parallel a little bit to like the podcast advertising channel where you're like, oh, well, now you've got like the Unilevers and the Walmarts of the world wanting in on these channels for obviously for good reason.

18:23But it's also interesting for us because we know that so many of the smaller or like the digitally native startups have sort of built their business on the back of this channel. So I do sense a little bit of tension there, but maybe it's maybe it's just me. yeah i mean it's fascinating and you were pointing this out melissa as we prepped for this but like best buy this year as part of the holiday strategy they're working with hot ones and binging with babish and like i remember when those shows i feel like were first bubbling up like have you heard about this and now huge conglomerates like best buy are working with them yeah how do you go up against those budgets, you know.

19:06Right. Yeah. It's like the big guys kind of came in and bigfooted everybody. Right. And sort of we can work with them because we can afford them versus, you know, startups that are still just sort of doing it on their own. But, you know, I'd argue that they still almost have an upper hand because the I think smaller startup companies tend to be, you know, maybe more digitally native and maybe more nimble and maybe more willing to take a risk on a new platform where, you know, legacy brands, you know, unless you just really trust your social media manager to put a TikTok out, I mean, how many layers of approval does something need to get done or to get a contract signed, right?

19:44The other aspect of this that I think is really interesting is what we're going to see from companies who are really, truly social first, right? You know, I think about a company like Cakes, who we had on the podcast in 2025, And they really blew up on TikTok and it helped them build their brand. But, you know, they went on to go retail in Ulta and they have sales coming from multiple places now. I would kind of predict that we're going to see more and more brands like that. They blow up on social. They go viral on TikTok shop. They get a ton of sales. But then they find their way in, you know, the more traditional retail ecosystem.

20:17Yeah, absolutely. Yeah. I mean, you already see, like, if you look at shelves right now, it says, as seen on TikTok or viral products. It's the new I've seen on TV. Yeah, I went into a Sephora a few weeks ago for the first time in a long time. And I forget how they phrased it exactly, but they had an end cap that was like trending on social. Oh, that's interesting. Yeah, bridging that gap between the online and the offline is definitely a big challenge that I think curation seems like the name of the game right now, but I'm sure we'll see more attempts at that. Just to put some numbers around this topic, I thought there were some really good insights from our colleague, Crystal Scanlon, over at Digiday.

21:00She wrote up something looking at this topic in 2026, and she cited an IAB report that used data from advertiser perceptions, and that's predicting that the creator economy ad spend ecosystem will grow to$43.9 billion next year. That's up from a forecasted$37.1 billion at the end of 2025. You know, what I did think was interesting, and Gabby, this sort of speaks to your question earlier about where this is coming from. Just to break that down a little further,$11.6 billion is projected to be spent on direct partnerships between brands and creators to produce and post content. So that's that traditional relationship between a company and an influencer.

21:45And that is projected to be up 21 % from 2025. But then on top of that, another$13.2 billion is expected to come from paid amplification of content from those direct partnerships. So not only do we have like, you know, all this money being spent on the relationships and the content itself, but then just going back into the ad ecosystem to put those into people's feeds. Yeah, that's fascinating. And I think this just all speaks to, and like Gabby made this point earlier, but there's so many different aspects of the creator economy. And there's a lot of different ways that these budgets could fall.

22:24Yeah, and I imagine some of that falls under like UGC, right? A lot of times what brands with limited budgets will do is they'll generate a lot of user-generated content or ask for it or source it. And then whatever is gaining traction or whatever is actually resonating with customers, then they'll start to put ad dollars behind it and amplify it across their social campaigns. So that's a practice that's become more and more popular as a way to optimize that budget. But yeah, it makes sense to me why that spend is also jumping. Right. Yeah. And really getting the most bang for your buck out of either UGC that's coming to you organically or those direct partnerships that you're paying for up front.

23:13The other aspect of this that I'm going to be watching is where some of the spending is happening. I think we all know that TikTok and TikTok Shop are going to continue to grow, or at least it seems like they will sitting here at the start of 2026. But I'm also anticipating that YouTube is going to play a bigger and bigger role in influencer and marketing campaigns. I recently spoke with Bridget Dolan, who's the managing director at YouTube Shopping, and she walked me through a lot of the updates that are happening there, including in their affiliate hub, which is really just trying to make it like plug and play for brands and creators to find each other and then have people be able to check out, you know, right from watching their YouTube video.

23:55Yeah, YouTube is, that's fascinating. That is one that I am hearing of brands that were investing more in leading up to this holiday season, just because Facebook has become so saturated. And there's been a lot of changes to the YouTube platform, I think, over the past few years to make it easier for startups to run advertising on YouTube for the first time. So YouTube is definitely a platform I'm watching in 2026. And then, so where does that leave us with the TikTok question or TikTok shop? I think, you know, last but not least. Yeah, I mean, I think I still hear from brands who want to make TikTok happen for them, for ones that haven't quite cracked the code or had that viral moment on TikTok yet.

24:51They still want it and they still know that there's so many eyes on that platform that they'd like to be there. I don't see it going away. I don't see the appetite waning. Yeah, I don't. I think TikTok is here to stay. Like the stat that I've seen that's so fascinating is that TikTok shop is bigger than eBay now, which is crazy. that is wild and it's like less than three years old still especially when you think about you know tiktok shop uh just becoming such a force well that's about it from my end unless you all had any other insights to share you know from where i'm sitting though big picture i just think we're going to see brands take creator marketing more and more seriously they're not only going to be taking it into account as they create their advertising campaigns but also as they create their products and also think about how people talk about them and what circles they want to be in.

25:48I just think this is becoming a lens through which we start to see not just marketing, but really all branding and product discussions. You know, does it remain to be seen if one viral moment can give you a sustainable business? I'm not sure about that. But I do anticipate we will see more of those social first brands breakthrough as well. Yeah, I think just the name of the game is that like influencer marketing is changing. It takes more to stand out. And so I think we'll see more interesting, deeper ways that brands are trying to work with influencers throughout the year. And sometimes that might mean working with them to develop products.

26:26All right. Well, next up, we are going to be discussing M &A. This feels like in 2025, it felt like Melissa and I, like every other week, we're talking about an acquisition or a company offloading a brand that's not working. So the short of it is that I do expect more of that in 2026, but I did want to get in the meat of it and talk to you guys about, we are making some relatively bold predictions by talking about specific companies that we're watching that we think are quote unquote primed for acquisition based on our research, based on who we speak to. I think investors are usually the people who are watching this space and say, hey, that's a company that any minute now we're going to hear an acquisition announcement from them.

27:15So, yeah, to break it down, I kind of broke it down in a couple of different categories, but I wanted to start with like food and beverage just because that's my very popular category. Yeah, yeah. I mean, you know, just to jump right in, I think Olipop is a company that I and many others have watched the last few years because there were already rumors swirling around them of being acquired by one of the big soda brands. And then in 2025, of course, we saw PepsiCo acquire Poppy for a really big price tag. So to me, it feels like there's momentum in that sort of healthy soda space. But I'm curious to hear what you guys think, because Olipop is actually older than Poppy.

27:56Maybe some people don't know by a couple of years, but they just raised a bunch of money like less than a year ago. So I don't I mean, I'm not, you know, a Wall Street analyst, but I imagine that maybe they're not going to sell any minute now, but they're still on that list for me. Yeah, I am very fascinated to see what happens with Olipop. I mean, I know that we had the Poppy acquisition, but I do think there's room for multiple players in this space. And I don't know, I feel like if you are a beverage brand, you kind of do need to sell to another company that can pour a lot of money into distribution.

28:36Or the other route is that they like go public and maybe acquire brands of their own but i don't think that they're quite at that scale yet i know one thing olipop was really focused on um i don't know how much progress they've made with this but um rolling out shelf stable lines too its beverages are predominantly found in the refrigerated section or maybe that's where you first discovered them um but if they have shelf stable products, that opens them up to a lot more distribution. So I'm just very curious to see what happens with that. If that leads to more distribution, they could definitely be a good candidate to get acquired next year.

29:15Yeah, they did start rolling that out about a year ago in the multi-pack form. But of course, that single can grab and go is still the biggest play for a lot of these brands just because that's how people discover it. But yeah, I just wanted to add that. Yeah. So a couple of years ago, we kept hearing that Coca-Cola was interested in Olipop. That would be kind of a funny like David and Goliath situation. That would be. Oh, man. Yeah. I don't know what's going on. I haven't looked recently to see what's going on with Coca-Cola or what they've said about M &A. Yeah. I don't know. Or is there something else wild?