New artificial intelligence tools are reshaping the retail industry, but brands and retailers are still trying to identify the right strategies to incorporate this new technology into their businesses.
Research conducted in the months leading up to Black Friday found that between 33% and 83% of respondents used AI for their 2025 holiday shopping. According to Amepriti research, 97% of retailers plan to maintain or increase their investment in AI over the next year. Meanwhile, Deloitte research shows that the majority of retailers are currently using or plan to use AI in the next 12 months for everything from cybersecurity to pricing and promotion optimization to supply chain visibility.
With this backdrop, Modern Retail's editorial team surveyed six retail leaders, ranging from vice presidents at large companies like Target and Lowe's to founders of digitally native startups, to find out how they plan to incorporate AI into their businesses in 2026.
Currently, no retailer is using AI for just one part of their business. These retail industry leaders all outlined the different ways they hope to leverage AI to improve the customer experience in 2026 and how they are taking a cross-functional approach to deploying new AI tools. Answers have been slightly edited for clarity and length.
Measurement, curation, and inventory planning with AI
“At Kroger, loyalty accounts are truly our connective tissue and drive much of what we do. Therefore, being able to properly use machine learning to measure the impact and performance of our activities at KPM will be a continuing focus for us. KPM has been using machine learning for many years to give advertisers and brands the most accurate representation of campaign performance.” –Christine Foster, Senior Vice President of Commercial Strategy and Operations, Kroger Precision Marketing Powered by 84.51˚
“In 2026, AI will help Target's merchandising powers and improve the guest experience. Most importantly, we are expanding technology that empowers people, meeting guests where they are, empowering team members to do their best work, and making it easier for partners to work with Target.” is expanding its tools to help teams spot trends earlier, plan inventory more accurately, and create more seamless shopping journeys from search to checkout.Generative and agentic AI will be embedded even deeper across our business, creating more space for innovation, creativity, and speed. ” –Prat Vemana, Vice President, Chief Information and Product Officer, Target
“As we overcome this situation next year, [AI-powered changes are] Let's talk about curation. They will be about how you engage and how it is customized to you. So going into the first and second quarters of next year, the website is going to look different for you and me. Because what we actually want is different.
second [AI effort] It's visualization. You can now take photos of your kitchen and review them in real time. You can take a picture and say, “What does this look like in real life?” You can go from inspiration to installation. It's going to be almost Pinterest style. what do you like? “It's modern, it's mid-century modern, it's traditional, it's country.” To me, this is a very exciting way to show customers how we can improve what they already have: their phones. ” –Joe Cano, Senior Vice President of Digital Commerce at Lowe’s
Helping startups migrate quickly
“What’s really interesting for us is that Shopify We've just announced in the Editions update that we've made some pretty impressive progress in terms of AI tools, and you'll soon be able to use OpenAI and ChatGPT to work on custom APIs, including how to display all your products on ChatGPT. , and will be able to customize the content around it. We also now allow Brand Owners on Shopify to create custom apps and internal operations within Shopify that allow them to analyze their stores, collect data when inventory trends are occurring, and create custom apps. Create a workflow.
At the same time, for customers, they don't want more technology; they want less friction. Whether it's analyzing data, designing better pages, or making it easier to see order status and package tracking, it's essential to use AI behind the scenes to make the customer experience feel simpler and more intuitive. ” –Jimmy Zorro, Co-Founder of Joe & Bella
“Foundation of our approach is an internal AI task force made up of leaders from finance, legal, brand, marketing, digital, and operations. This group exists to keep AI top of mind across the organization while establishing clear guardrails.…Within that structure, we have smaller working groups specifically focused on GEO. We evaluate everything from how we deliver higher quality editorial coverage that the platform references when recommending products. We also optimize the content on our sites so it's easier to understand and surface.”
From a creative and operational standpoint, we plan to use generative AI to update large amounts of static syndicated content across our online marketplace. This reduces reliance on frequent and costly photo shoots for new product launches and packaging updates, while maintaining high quality and accurate visual representation.
We've become more intentional about where generative AI makes sense for brands and where it doesn't. We find that AI performs best for us when its use is transparent and appropriate. [and] For example, we focus on utility-driven applications rather than core ad creatives. That said, we see huge potential for AI in advertising through editing and optimization. Video editing is very time- and resource-intensive, so AI is a great complement to our team. With features like context indexing and semantic video analysis, AI can quickly identify footage that speaks to specific consumer pain points or product benefits. ” –Nick Hasselberg, Every Man Jack VP of Performance Marketing and E-Commerce
“We are big believers in AI and are particularly impressed with how generative AI tools can operate more efficiently and make faster, better-informed decisions. [We are] Most of the time I use tools like ChatGPT and Google Studio, along with Nano Banana, Flow, and Gemini. AI supports understanding of the broader market, competitive landscape, and new medical and scientific innovations, while unlocking meaningful marketing and content creation opportunities. We are excited to see how AI continues to evolve with the FMCG industry and what role it will play in shaping how brands operate in the years to come. ” –Justin Kerzner, Magic Science Co-Founder and CEO
“AI as a cost-reduction tool is incremental. AI as a growth engine is exponential. Below the line, AI helps businesses run tighter and more efficiently. This is important, but it's also a big bet. Above the line, there is an opportunity for AI to increase exponentially.”
As a data-rich, digitally native brand, we use the predictive modeling tools we've built to better understand the potential value of our customers from day zero, not months later. That insight feeds directly into our growth engine, creating smarter feedback loops to our advertising platforms so we can more intentionally acquire high-quality customers. The result is not only faster growth, but smarter growth as well. Combine this with AI-driven personalization across the customer experience for compounding impact. We're still in the early stages, but we're very excited about what's to come. ” –Ben Lewis, Co-Founder and CEO of Little Spoon
