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Retail trends 2026: Where AI, Sustainability, and Packaging Converge
Inflation, regulatory acceleration, and rapid AI adoption are reshaping both shopper behavior and operational retail models. Let's explore how these forces converge - and how packaging is evolving from a passive container into an active retail enabler.
Leon Nicholas, Vice President Retail Insights and Solutions at Smurfit Westrock and Maurizio Carano, Marketing & Innovation Director at MCC Global IML, share their thoughts.
Setting the scene: Volatility, Value, and Acceleration
What are the most significant retail trends currently shaping the CPG industry?
Leon Nicholas: “The impact of inflation is influencing shoppers to make adjustments in a few notable areas. These include shifting purchases to private brands and optimizing pack sizes based on household income i.e. larger pack sizes in upper‑income households, smaller pack sizes across others.
We also see a clear divergence between retailers: both luxury players and discounters are performing well.
Finally, the continued growth of e‑commerce and digitally enabled commerce is driving changes in fulfillment methods, smart packaging, and packaging fit‑for‑purpose across a broad range of options.”
Maurizio Carano: “From a packaging standpoint, these shifts compress decision‑making at shelf and online. Packaging is no longer a passive cost: it becomes a lever to manage affordability, efficiency, and differentiation simultaneously. Retailers and brands are asking packaging to work harder: protecting margins while supporting omnichannel execution and shelf clarity.
That’s where solutions that combine operational efficiency with communication power start to matter most.”
Looking Ahead: The Next 3–5 Years of Retail
What emerging trends do you believe will reshape retail in the next three to five years?
Leon: “AI integration into manufacturer and retailer systems—as well as shopper applications—will have a fundamental impact on retail. From supply‑chain optimization to marketing funnel calibration and shopper agents, AI will catalyze systemic change.
Products, via packaging, will need to become portals into the AI sphere. Packaging will increasingly convey the attributes that “cue” AI‑driven recommendations.”
Maurizio: “Leon’s point reframes packaging as an interface, not just a container.
If AI depends on accurate, structured product signals, then decoration technologies, data carriers, and material choices all become strategic inputs. Packaging has to be readable by machines and intuitive for humans at the same time.”
Sustainability as a Purchase Driver
What role does sustainability play in consumer purchasing decisions today?
Leon: “Sustainability plays an important role, especially for millennial and younger shoppers. These consumers are more likely to buy products with a visible commitment to sustainability.
That commitment is most easily conveyed through packaging that is recyclable and made from sustainable sources. The connection between the sustainability message and the package itself is increasingly important to today’s savvy shopper.”
Maurizio: “This alignment between message and medium is critical. If a brand talks about circularity but the packaging is complex or confusing to recycle, trust erodes quickly.
Designing for mono‑materiality and recyclability makes sustainability tangible for consumers.
As of today, IML packaging is uniquely positioned as a mono-material and easy to recycle packaging solution. Consumer should have an easy way to recycling and hence ‘doing the right thing’. Food packaging is different from industrial of course. While paint pails and the likes of them have also rigid lids made of the same material, when we look at food, yogurt for example, the lids are still mainly multilateral and hence less ‘fully recyclable’.”
How are retailers responding to eco‑conscious and value‑driven consumers?
Leon: “Shoppers who are both eco‑conscious and value‑driven seek retailers that allow them to be both - without traditional trade‑offs. Retailer private labels are a strong example, enabling sustainability commitments while remaining affordable.
“Packaging sits at the intersection of agility, AI readiness, and sustainability. Those who treat it as a strategic system—rather than a cost line—will be best positioned for what comes next.” - Maurizio Carano
Technology, Regulation, Traceability, and Digital Identity on the retail floor and beyond
Which technologies are having the biggest impact on retail operations?
Leon: “Past investments in automation are now bearing fruit: robotic palletization, micro‑fulfillment centers, and automated shelf monitoring. In all cases, the package’s ability to “communicate” through smart labels, RFID, or similar technologies is critical to synchronized logistics. AI will increasingly optimize across these automated systems.”
Maurizio: “It’s all about reducing friction. Technologies such as AI and connected packaging enable readable surfaces and data-ready labels across logistics and retail execution.
This way, packaging becomes part of the infrastructure.
Linking retail operations to consumer experience, the possibility to add unique (serialized) coding on an IML label opens up a whole universe of customized messages that can be tailored down to the single consumer. This enables brands and retailers to engage their customers like never before both in terms of pure marketing and also when it comes to crucial information (provenance, product recalls and so on). Again: it takes away friction.”
How do features like unique coding or digital watermarking support sustainability and legislation?
Leon: “Features of smart packaging enable end-to-end circularity scoring, a kind of sustainable blockchain, that is measurable and transparent for stakeholders and can play a vital role in regulatory compliance.”
Maurizio: “What matters here is scalability. Technologies like variable printing and serialized QR codes allow compliance and traceability without heavy hardware investment and without a possible impact on the recyclability of the packaging materials.
Saying this, we see the use of RFID technology for re-usable/durable items such as returnable crates (for click and collect) and reusable cups (think about music festival, sports events) where reverse logistics and in some cases, consumer engagement and rewards schemes coalesce in creating/preserving value across the supply chain.
Loyalty in a crowded retail landscape
How do you measure and improve customer loyalty today?
Leon: “Personalization, increasingly through AI‑driven digital applications, will drive loyalty.
Retail winners will be those who deliver context‑specific, predictive recommendations in ways that feel intuitive and frictionless.”
Maurizio: “I see packaging playing a quiet and powerful role here. When connected surfaces link products to digital experiences, loyalty moves beyond price into relevance, reassurance, and engagement. That’s where physical and digital retail truly converge.”
