AI Boosts Physical Retail Expansion in 2026

According to Colliers' report "How AI Is Redefining Retail in 2026," 85.1 percent of U.S. retail sales still pass through physical stores, and 71 percent of retailers are expanding their physical footprints this year, as reported by WWD. The report states that currently one in four online orders is fulfilled via a physical store and that figure is expected to top 35 percent by 2030, per Colliers. Colliers' analysis, cited by WWD, finds retailers that increased IT budgets by 52 percent over the last five years are projected to see profits grow nearly three times faster in 2026. The report also reports AI-specific adoption metrics: nearly 50 percent of shoppers use AI for product recommendations, 75 percent say those tools influence purchases, agent adoption rising from 19 percent to 46 percent, and an example where Macy's customers using AI shopping assistants spend roughly 400 percent more than average shoppers.

The Colliers findings align with broader patterns where physical retail becomes an operational node for omnichannel logistics, not only a sales showroom. For practitioners, the key technical demands are integration between online order systems and in-store fulfillment, real-time inventory visibility, and scalable recommendation engines tied into point-of-sale and fulfillment workflows. Industry implementations that combine personalization, store-level fulfillment, and agent-style assistants require robust data pipelines, low-latency inventory APIs, and unified customer identity graphs.

Industry observers note that when physical locations serve as fulfillment hubs at scale, landlords and developers face new infrastructure requirements such as network edge capacity, dedicated micro-fulfillment areas, and flexible store layouts. For data teams, retail deployments elevate priorities around inventory accuracy, latency-sensitive inference, and cross-channel attribution.

Track reported changes in in-store fulfillment share, retailer IT spend as a percentage of revenue, adoption rates for AI agents, and vendor partnerships that package personalization with fulfillment orchestration. Monitoring case studies from large chains such as Macy's and their ROI metrics will be especially informative for practitioners assessing operational trade-offs.