Podcast Summary: Behind the Numbers — "The Great BTN Bake (Take) Off — Retail Trends for 2026: How AI Will Change the Digital Shelf and IRL Customer Interactions | Reimagining Retail"

Date: January 7, 2026
Host: Susie Deva Kenyon
Guests: Blake Drosch (Senior Analyst), Sky Canavas (Principal Analyst)

Episode Overview

This episode of "Reimagining Retail" adopts a playful "Bake Off" structure to dissect two key retail trends to watch in 2026, directly from the eMarketer trends report. Host Susie Deva Kenyon guides analysts Blake Drosch and Sky Canavas through rounds of discussion, pitting their boldest predictions against each other. The central question: How will AI reshape both digital and in-person retail, and what must brands do to compete in a fast-evolving landscape?

Key Discussion Points & Insights

1. Retail Trend 1: Reinventing IRL Customer Connections

Presented by: Blake Drosch
Timestamps: [02:50], [05:45], [08:59], [12:16], [20:40]

• The Signature Take ([02:50]):

  • Blake argues that retailers are being pushed to rethink how they connect with consumers in person, due to the evolving online ecosystem and the rise of AI-driven, platform-centric shopping.

  • Direct-to-consumer (D2C) online models have plateaued, and a sense of "digital disconnection" is prompting a renewed focus on physical retail.

    "The threat of [AI-driven disconnection]... is really going to force retailers back into the physical space in order to connect with consumers in new, meaningful ways." — Blake ([03:36])

• How It Plays Out Technically ([05:45]):

  • Stores are being reinvented as community hubs, with innovative events beyond simply shopping — e.g., Ulta Beauty’s ticketed convention events and 20,000+ localized in-store happenings.

  • Blurring of digital and physical: Brands tap into online communities and activate them through real-world experiences, fostering loyalty.

  • Gen Z is driving this shift, seeking physical experiences to supplement their highly digital lives.

    "Younger consumers...spend so much time online that they're also driving a lot of store traffic because they want something different. They want the real world experience to supplement their online experience..." — Sky ([08:19])

• Role of Technology ([10:14]):

  • Mobile apps and loyalty programs are crucial; app-users in-store spend significantly more (25–50%) than non-app-using peers (as seen at Target and Walmart).

  • Stores' digital infrastructure (apps, in-store media, cross-channel data) is becoming as vital as the bricks and mortar.

    "It's really important to maintain that digital connectivity because [mobile apps] give them a holistic picture of their consumer across channels." — Sky ([11:20])

• Why Now? ([08:59], [12:16]):

  • The combination of AI, evolving shopper habits, and digital saturation makes in-person, connected experiences more valuable than ever — for all retailers, not just giants.

    "It is something that all retailers can get involved in. A lot of the times it's these smaller retailers that actually do a really good job...having a personal connection with their shoppers in the store." — Blake ([12:16])

• Show-stopping Argument ([20:40]):

  • 80% of sales still happen in-store. The physical channel is essential for both revenue and brand differentiation.

    "It's always going to be the most important channel for retailers to optimize...because that is when [customers] are in the shopping mindset and [retailers] have total control over what's happening." — Blake ([20:46])

2. Retail Trend 2: The New Digital Shelf & AI-Driven Shopping

Presented by: Sky Canavas
Timestamps: [04:17], [12:52], [15:13], [17:23], [18:58], [19:29], [21:53]

• The Signature Take ([04:17]):

  • Sky forecasts that the rise of AI-powered shopping assistants will require brands to serve three distinct digital audiences for every product:

    1. Human shoppers
    2. Humans using AI tools
    3. Fully autonomous AI agents

  • Product content must be optimized not just for people, but also for AI, which is becoming the primary layer of digital shelf visibility.

    "...retailers and brands will have to adapt to speak to new audiences online... AI audiences." — Sky ([04:19])

• How It Plays Out Technically ([12:52], [15:13]):

  • Product detail pages (PDPs) and digital product content will become critical strategic assets.

  • Brands must feed LLMs (large language models) with robust, structured data — not just slick visuals — to ensure products appear in AI-powered recommendations and conversations.

  • Brands likely to develop “made for LLM” content (akin to ‘SEO’ pages for web search), and invest further in user-generated content (UGC), social proof, and video to appeal to both humans and machines.

    "They're looking for really in depth product information that's well structured. They need a lot more content than what typically meets the eye...and they're looking for comparison points, questions being answered..." — Sky ([13:23]) "...brands and retailers start to create websites or pages that really are made for LLMs, just as we have...[for] search or...advertising websites." — Sky ([15:13])

• Implications for Marketing ([15:53], [17:23], [18:58]):

  • AI-generated content may start feeding AI shopping assistants — a head-spinning concept with diminishing human touches if not managed deliberately.

  • Strategies will borrow from SEO but need to adapt for generative AI’s constantly evolving logic and outputs.

  • Creator networks (ie. Lowe’s, Home Depot) are being formalized to both engage actual audiences and provide rich data for LLMs to index.

    "Some brands and retailers are looking to SEO strategies to kind of inform their [Generative Engine Optimization] strategies...but they do share some underlying best practices..." — Sky ([17:23])

• Who's Leading Now? ([19:29]):

  • Walmart is spotlighted for pioneering AI integrations, including OpenAI partnerships and in-app AI assistants, plus enhanced creative engagement for Gen Z and wider audiences.

    "Walmart...through its very widely noted partnerships with OpenAI both to sell its products directly in ChatGPT...and working with OpenAI to enhance its native shopping assistant Sparky." — Sky ([19:29])

• Show-stopping Argument ([21:53]):

  • Online behavior is shifting rapidly, with AI-led discovery taking a larger role; brands must proactively optimize for this reality or miss future customers.

    "...brands have to think ahead to how they show up online and how consumer behavior is adapting rapidly to shift to other channels. And AI is a big one..." — Sky ([21:54])

Notable Quotes & Memorable Moments

• "The store is back. And then maybe a little bit more than the store." — Blake ([04:02])
• "I think Ulta is a really great example...they had that huge event in San Antonio that really brings in their die hard fans...But they also supplement that with the astounding number of like 20,000 in store events..." — Sky ([07:48])
• "We could keep talking about this, but unfortunately we have to stop." — Susie ([24:43])
• "Congratulations on your win." — Susie to Sky, after conceding that AI-driven digital shelf transformation may be the top trend for 2026 ([24:54])

Timestamps for Important Segments

• [02:50] — Round One: “Signature Take” introductions
• [05:45] — Round Two: In-person trend, events, community strategies
• [10:14] — Data, loyalty, and digital in-store integrations
• [12:52] — Sky details the technical side of “AI audience” trend
• [15:13] — How brands might create “made for LLM” content
• [17:23] — Creator networks, SEO, and AI optimization overlap
• [19:29] — Walmart case study: balance between LLM and human targeting
• [20:40] — Round Three: Final arguments/boldest case
• [24:54] — Show close and announcement of the “winner”

Tone and Energy

The episode is insightful yet playful, leveraging “Bake Off” metaphor to stage a spirited but friendly competition between the analysts. The tone is knowledgeable, approachable, and laced with industry in-jokes and practical advice.

Takeaways at a Glance

• The Store Is (Still) King: Physical retail remains the dominant revenue channel, but its role is rapidly evolving towards experiences, community, and omnichannel integration.
• AI Reshapes the Digital Shelf: Brands must optimize content for both human and AI “shoppers,” with an emphasis on structured data, multi-format content, and increasingly, creator and UGC influence.
• Retailer Apps and In-Store Digital: Enhancing the digital layer of the in-store experience drives higher spend and deeper loyalty.
• Future-Proofing is Essential: Immediate returns may favor store optimization, but the biggest long-term wins belong to those who anticipate, and serve, the AI-driven audiences of tomorrow.

Final Verdict

Susie acknowledges both trends’ importance but gives a slight edge to the AI-powered digital shelf transformation as the trend to watch in 2026 — with the caveat that “the store is king” remains a critical foundation for all retail success.

For more deep dives on digital and retail transformation, keep tuning in to "Behind the Numbers: Reimagining Retail."