AI agents will strengthen customer loyalty for the retail industry in 2026
By Rosemary DeAragon, Global Head of Retail and Travel at Snowflake
The Indian retail industry is the third-largest in the world, contributing over 10% to the country’s GDP and around 8% to employment, as per a report by the IBEF. In 2025, the segment witnessed unprecedented growth in quick deliveries, with each player introducing new features more frequently than ever to grab customers’ attention and loyalty.
With increased purchasing power, these quick deliveries have left customers wanting more within minutes, and a plethora of options to choose from across brands and platforms. As we enter 2026, retailers and brands must leverage Artificial Intelligence (AI) and Agentic AI, along with an omnichannel approach, to enhance the customer experience. Whether it’s loyalty programs, recommendations, or special offers, AI will enable brands to go that extra mile to provide a seamless experience and ultimately increase revenue.
Prediction: AI agents will begin automating shopping for consumers, as retailers compete for attention. While enterprise AI grabbed headlines in 2024-2025, consumer-facing AI agents will dominate retail competition in 2026. The game-changer will be AI agents that already have intimate knowledge of consumers—your contacts, location, browsing history, and calendar events. Imagine an agent that knows you’re attending a first birthday party next month and automatically suggests and purchases the perfect gift based on your relationships and shopping patterns.
Retailers will race to integrate with these AI assistants that can automate significant portions of the shopping journey. The stakes are enormous: consumers who trust an AI agent with their shopping preferences will concentrate spending with retailers that seamlessly connect to their personal AI ecosystem, which in turn creates unprecedented customer lock-in and lifetime value capture.
Prediction: Data-rich retailers and brands will dominate, as consumer choice overload increases. As AI proliferates, manufacturing knockoffs gets cheaper and more accessible, and consumers face exponentially more product options and content as a result, retailers with comprehensive customer data will capture disproportionate market share. In 2026, the retailers who excel at collecting, controlling, and preserving customer data will build the most accurate predictive models for cross-selling, recommendations, and customization. Buyers overwhelmed by choice will increasingly rely on trusted retailers who demonstrate they truly understand their preferences through personalized experiences. The more precise a retailer’s data-driven predictions, the more consumer trust they’ll earn—creating a competitive moat where data quality directly translates to customer loyalty and revenue growth.
Prediction: AI-powered loyalty programs will become retailers’ primary defense against economic volatility. As value-seeking behavior intensifies amongst consumers due to inflationary pressures, retailers are discovering that loyalty programs powered by AI and first-party data can command premium pricing even during economic downturns. In 2026, leading retailers will leverage AI to transform loyalty programs from simple points systems into sophisticated value-creation engines that justify charging above market rates through personalized experiences and targeted benefits.
The key advantage lies in rich customer insights: AI-powered loyalty platforms will enable retailers to identify the non-price factors that drive purchasing decisions—convenience, community, personalized recommendations, exclusive access—and optimize these elements in real-time based on economic conditions. Retailers without AI-driven loyalty capabilities will find themselves trapped in pure price competition, while those with sophisticated first-party data and personalization engines will maintain customer relationships and profit margins regardless of economic uncertainty.