Surveys conducted in the months leading up to Black Friday showed that anywhere from 33% to 83% of respondents used AI to do their holiday shopping in 2025. In turn, 97% of retailers plan to maintain or increase their AI investments next year, according to a survey from Ameprity. Meanwhile, a Deloitte survey shows that the vast majority of retailers are now using AI — or will be using it within the next 12 months — for everything from cybersecurity to pricing and promotion optimization to supply chain visibility. 

Against this background, Modern Retail’s editorial team surveyed a half-dozen retail leaders, ranging from vice presidents at big corporations like Target and Lowe’s to founders of digitally native startups, to discuss how they plan to incorporate AI into their businesses in 2026. 

At this point, no retailer is using AI in just one part of their business. All of these retail leaders outlined various ways they hope to use AI to improve the customer experience in 2026 and how they are taking a cross-department approach to rolling out new AI tools. Answers have been slightly edited for clarity and length. 

Using AI for measurement, curation and inventory planning

“At Kroger, our loyalty accounts are really our connective tissue, and they fuel a lot of what we do. And so, making sure that we can appropriately use machine learning to measure the impact and the performance of what we do at KPM will be a continual focus for us. KPM has long been using machine learning to make sure that we can provide advertisers and brands with the most accurate representation of their campaign performance.” –Christine Foster, svp of commercial strategy and operations for Kroger Precision Marketing Powered by 84.51˚

“In 2026, AI will be instrumental in powering Target’s merchandising authority and elevating our guest experience. Most importantly, we’re expanding technology to empower people — meeting our guests where they are, helping our team members do their best work and making it easier for our partners to work with Target. We’re expanding tools that help our teams spot trends earlier, plan inventory with more precision and create a more seamless shopping journey, from search to checkout. Generative and agentic AI will be embedded more deeply across our business — creating more space for innovation, creativity and speed.” –Prat Vemana, evp, chief information and product officer at Target

“As we go through this next year, [AI-powered changes are] going to be about curation. They’re going to be about how you engage and how it’s personalized for you. So, as you walk into Q1 and Q2 of next year, the website is going to look different for you than it does for me because we actually both want different things.

The second [AI effort] is visualization. You’re going to start to be able to take a picture of your kitchen and reimagine it in real time. You can take a picture and say, ‘How does this actually look?’ 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.’ That, to me, is a really exciting way to showcase to our customers how they can improve on what they already have, which is their phones.” –Joe Cano, svp of digital commerce at Lowe’s 

Helping startups move faster

“A lot of what’s exciting for us is what Shopify just announced in their Winter Editions update, which had some pretty remarkable advancements for AI tools. Soon, we’re going to be able to work on their custom API with OpenAI and ChatGPT, so we’ll be able to customize how all our products appear on ChatGPT, as well as the content that surrounds them. They also now have the ability for Shopify brand owners to make custom apps and internal ops within Shopify, which allows us to analyze store data and make custom workflows when inventory trends are occurring. 

At the same time, for our customers, they don’t want more technology — what they want is less friction. It’s imperative for us to use AI behind the scenes to improve that customer experience so that things feel simpler and more intuitive, whether that be through allowing us to analyze data, design better pages, or something as simple as making it easier for folks to check the status of their order or the tracking of their package.” –Jimmy Zollo, co-founder of Joe & Bella

“The foundation of our approach is an internal AI task force made up of leaders across finance, legal, brand, marketing, digital, and operations. This group exists to keep AI top of mind across the organization, while also establishing clear guardrails. … Within that structure, we have a smaller working group focused specifically on GEO. This team is evaluating everything from public relations strategy to how we land more qualified editorial coverage that AI platforms reference when recommending products. They are also optimizing on-site content so it is more easily understood and surfaced by AI-driven discovery tools.

From a creative and operational standpoint, we are planning to use generative AI to update a significant amount of our static syndicated content across online marketplaces. This will help reduce reliance on frequent and costly photoshoots when launching new products or making packaging updates, while still maintaining high-quality, accurate visual representation.

We are getting much more intentional about where generative AI does and does not make sense for our brand. We have found that AI performs best for us when its use is transparent and appropriate [and] focused on utility-driven applications rather than core advertising creative, for example. That said, we see strong potential for AI in advertising through editing and optimization. Video editing is extremely time- and resource-intensive, and AI is a powerful complement to our team. With capabilities like context indexing and semantic video analysis, AI can allow us to quickly identify footage that speaks to specific consumer pain points or product benefits.” –Nick Hasselberg, vp of performance marketing and e-commerce at Every Man Jack

“We are big believers in AI and are especially impressed by how generative AI tools help us operate more efficiently and make quicker, better-informed decisions. [We are] using tools like ChatGPT and Google Studio for the most part, along with Nano Banana, Flow and Gemini. AI helps support our understanding of the broader market, competitive landscape and emerging medical and scientific innovation, while also unlocking meaningful opportunities in marketing and content creation. We’re excited to see how AI continues to evolve alongside the CPG industry and the role it will play in shaping how brands operate in the years ahead.”  –Justin Kerzner, co-founder and CEO of Magic Science 

“AI as a cost-savings tool is incremental. AI as a growth engine is exponential. Below the line, AI helps you run a tighter, more efficient business — and that’s important, but also table stakes. Above the line is where AI has the opportunity to be exponential.

As a digitally native brand with deep data, we’re using the predictive modeling tools we’ve been building to better understand a customer’s potential value from day zero, not months down the line. That insight feeds directly into our growth engine — creating smarter feedback loops into our advertising platforms so we can acquire higher-quality customers more intentionally. The result isn’t just faster growth, but also smarter growth. Pair that with AI-driven personalization across the customer experience, and the impact compounds. We’re still in the early innings, and I’m incredibly excited about what’s ahead.” –Ben Lewis, co-founder and CEO of Little Spoon