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In 2026, AI is transforming retail real estate by enabling stores to serve as fulfillment hubs and personalized shopping spaces. Retailers investing in AI-driven infrastructure are seeing significant growth, prompting widespread expansion.
Retailers are increasingly expanding their physical store footprints in 2026, driven by the integration of artificial intelligence that enhances logistics, customer engagement, and sales performance, according to a recent Colliers report.
The report, titled “How AI Is Redefining Retail Real Estate in 2026,” states that 85.1 percent of U.S. retail sales still flow through brick-and-mortar stores, leading 71 percent of retailers to grow their physical presence this year. Stores are now functioning as fulfillment centers and critical components of omnichannel strategies, with one in four online orders fulfilled directly through physical locations—a figure expected to rise above 35 percent by 2030.
Retailers investing heavily in AI—particularly in real-time inventory tracking and integrated data systems—are seeing tangible benefits. Companies prioritizing IT spending have reported nearly threefold profit growth compared to slower adopters. Consumer behavior also reflects this shift, with nearly half of shoppers using AI for product recommendations and 75 percent acknowledging these tools influence their purchases. Early adopters, such as Macy’s, report AI-powered shopping assistants increase spending by approximately 400 percent, and those implementing AI in stores are experiencing 79 percent higher sales growth.
Why It Matters
This development signals a fundamental shift in retail strategy, where physical stores are no longer just showrooms but vital logistics hubs and personalized shopping environments. For consumers, this means more efficient, engaging, and customized shopping experiences. For retailers, successful AI integration can lead to increased sales, higher margins, and stronger competitive positioning. However, it also requires substantial investment in infrastructure and redesign of store layouts to support fulfillment and AI-driven customer interactions.
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Background
Historically, the retail industry faced a predicted decline with the so-called “retail apocalypse,” but recent trends show a technological renaissance. The Colliers report highlights that despite the growth of digital commerce, physical stores still handle the majority of retail sales in the U.S., prompting a strategic shift. Retailers are now focusing on creating “phygital” experiences—blending physical and digital—to maximize engagement and efficiency. This trend aligns with broader industry moves toward omnichannel retailing and advanced logistics systems.
“The infrastructure required for modern AI, such as real-time inventory tracking and integrated data systems, cannot be easily retrofitted. Brands must invest in fulfillment-grade real estate that supports complex logistics and high-speed data processing.”
— Anjee Solanki, Colliers national director
“Retailers who prioritize IT spending and AI integration are seeing nearly three times faster profit growth than their slower-moving peers.”
— Colliers report authors
What Remains Unclear
It is not yet clear how quickly all retailers will fully adopt AI-driven infrastructure or how widespread the impact will be across different retail sectors. The specific pace of store redesigns and the long-term ROI of these investments remain to be seen as the market evolves.
What’s Next
Next steps include further investment in AI-enabled logistics and customer experience systems, with many retailers planning to expand their AI capabilities and physical footprints. Monitoring how these changes affect sales performance and customer satisfaction will be key in assessing the long-term success of this shift.
Key Questions
How is AI changing the role of physical stores?
AI is transforming stores into fulfillment hubs and personalized shopping environments, enabling real-time inventory management, tailored recommendations, and streamlined last-mile delivery, thus making stores more integral to omnichannel retailing.
What are the main benefits for retailers investing in AI?
Retailers see increased sales, higher profit margins, improved customer engagement, and more efficient logistics. Early adopters report significant sales growth and improved operational efficiency.
Are all retailers adopting AI at the same pace?
No, there is a widening gap between early adopters who prioritize IT spending and slower-moving competitors. Investment levels and infrastructure readiness vary, influencing the pace of adoption and impact.
What challenges do retailers face when upgrading store infrastructure?
Major challenges include the high cost of retrofitting stores with advanced data systems, redesigning layouts for fulfillment and customer experience, and integrating AI tools seamlessly into existing operations.
