AI Drives $1 Trillion in US Retail Sales as Physical Stores Gain Strategic Importance

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5.20.2026

Quick Facts

AI-driven shopping experiences could fuel $1 trillion in US retail spending by 2030
85.1% of US retail sales still flow through physical stores, prompting 71% of retailers to expand footprints
Early AI adopters report 79% higher store sales growth compared to companies that delayed investment

Artificial intelligence is making physical stores more strategically important, not less, as retailers discover AI’s power to transform brick-and-mortar locations into sophisticated fulfillment hubs and customer experience centers.

The global AI in retail market reached $18.4 billion in 2026 and is projected to grow to $130.88 billion by 2033. About 89% of retail and consumer packaged goods companies are actively using or testing AI applications.

“One of the biggest misconceptions around AI is that it reduces the importance of physical retail,” said Nicole Larson, senior manager of National Retail Research at Colliers. “In reality, retailers are expanding footprints and redesigning stores as physical locations are becoming even more critical to fulfillment, customer engagement, and operational efficiency.”

Physical stores handle one in four online orders today. That figure is projected to exceed 35% by 2030. Coresight Research forecasts 5,500 new stores will open this year, up 4.4% from 2025.

AI Adoption Shows Immediate Results

Retailers implementing AI see measurable returns. Macy’s customers who use the “Ask Macy’s” AI shopping assistant spend 4.75 times more than those who don’t. Walmart CEO John Furner reported customers using the Sparky AI agent spend approximately 35% more.

Early AI adopters achieve 34% higher buy-online-pickup-in-store performance. Companies that increased IT budgets by 52% over five years are projected to see profits grow nearly three times faster than competitors in 2026.

About 50% of consumers use AI for product recommendations, while 75% say AI significantly influences their shopping decisions. The share of consumers using AI agents will surge from 19% today to 46% by the end of 2026.

Physical Stores Transform Into Experience Hubs

Stores are evolving beyond transaction points into brand-building spaces that integrate seamlessly with digital channels. The Vitamin Shoppe rolled out “Shoppe Advisor” digital touchscreens providing wellness content and product guidance.

“There is a realization that there is an inherent AI-proof opportunity for stores to create that kind of experience you can’t replicate via an AI agent,” said Nikki Baird, VP of strategy at Aptos. “Especially among younger generations, we see more and more a shift toward, ‘I want a real experience.’”

When retailers were asked why they’re opening stores, 62% cited improving brand perception, 60% wanted to drive foot traffic, and 58% aimed to increase customer loyalty.

Walmart’s approach exemplifies the integration strategy. “I love how Sparky perfectly fits within our omnichannel strategy,” Furner said. “It connects digital intent to fulfillment through forward-deployed inventory and 1.5 million associates. When Sparky builds a basket, we execute it through fast delivery, pickup, or in-store.”