The Three Technology Pillars Reshaping Retail in 2026
CES is finished and we are heading into NRF week.
The first full week of tech news in 2026 delivered a clear signal about where retail technology is heading. Across grocery, quick-service, and mass retail, three technology pillars are emerging as competitive differentiators: artificial intelligence at scale, retail media network expansion, and platform modernization at unprecedented speed. The retailers moving fastest on all three fronts are pulling away from the pack.
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AI Moves From Pilot to Profit Center
Albertsons reported that artificial intelligence delivered “a big payoff” during Q3, with CEO Susan Morris stating the company is working to “scale AI across the enterprise to fundamentally change how we operate and how customers experience Albertsons.” A new AI search function drove a 10% increase in basket size among users.
This performance validates what IHL Group research has been tracking for years. Retailers now dedicate an average of 15% of IT budgets to AI initiatives, with year-over-year AI spend increasing by 27%. The impact extends across demand forecasting, inventory optimization, and customer personalization. AI-powered demand forecasting reduces forecast error by 20% to 40%, while AI-driven markdown optimization improves sell-through by 10% to 20% while preserving 2 to 4 points of margin.
Further, 83% of retailers show significant excitement for AI personalized experiences, followed by AI demand forecasting at 78%. Automated inventory management rounds out the top tier at 74%. These numbers signal consensus forming around AI’s most practical retail applications.
PepsiCo announced during CES that it is deploying physics-based digital twin technology with Siemens and NVIDIA to transform supply chain operations. The company reports a 20% increase in throughput upon initial deployment, faster design cycles, and 10% to 15% reductions in capital expenditure. This approach combines 2D and 3D digital twin data with computer vision to simulate, test, and refine changes before physical implementation.
Continued Rise of Retail Media Networks
Ahold Delhaize USA launched Edge, a new retail media platform built specifically for grocery retail. Bobby Watts, SVP of retail media, told The Shelby Report the platform was “built by grocers for grocery,” emphasizing fine-tuned algorithms that understand purchase frequency and category dynamics.
The company is testing digital screens in 15 stores across five banners, placing displays at entrances, shopping aisles, pharmacies, and fresh departments.
Albertsons Media Collective unveiled in-store incrementality measurement capabilities designed to isolate actual advertising impact from baseline sales. A Mondelēz campaign for Sargento Cheese Bakes crackers delivered a 14% in-store sales lift with over 5.5 million impressions.
This echoes our research that shows retail media networks represent a new revenue stream that offsets margin pressure. Industry leaders generate 1% to 3% of revenue from retail media, with 70% to 90% margins. For a $1 billion revenue retailer, retail media could add $10 million to $30 million in high-margin revenue.
Platform Modernization Accelerates
Jack in the Box completed a systemwide POS deployment across more than 2,100 restaurants in just 15 months, marking “one of the fastest full-scale POS modernizations in the QSR category.” The new platform claims higher check averages through digital kiosks and smarter upsells, cuts training time by more than half, and enables restaurants to operate through network or cloud outages.
The Competitive Chasm Widens
The pattern across these announcements is unmistakable. Leaders expect 2026 profits approximately 3x higher than laggards, which explains their significant advantage in IT spend growth. Leaders report a 72% greater advantage in current use of traditional technologies and roughly 3.7x greater advantage with emerging technologies.
Retailers that treat AI, retail media, and platform modernization as interconnected priorities will compound their advantages quarter over quarter. Those waiting for perfect conditions will watch competitors capture market share that becomes increasingly difficult to reclaim.
The technology decisions made in 2026 will determine competitive positions for the remainder of the decade.
Look forward to seeing everyone at NRF!
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