Amid the struggling high street of the past five years, 2026 predictions hold promise for physical retail.
UK high streets have been struggling for some time, and with a global pandemic turning consumers to online shopping, there has been little sign of improvement.
Black Friday sales were down 2% last year, and the usual boom over the Christmas holidays failed to materialise for the high street.
However, 2025 proved to be a successful year for some brands and their physical retail space. Cult-followed fitness brand Gymshark, which started as an influencer-led online brand, now has nine stores worldwide.
Leading bookstore Waterstones is opening 10 new stores each year, with a reported 12.2% rise in sales back in 2024, following a boom in reading amongst young shoppers. So, what should businesses be doing to succeed in physical retail, and why now?
Last year saw in-store experience move from transactional to experiential, according to Laura Saunter, trend forecaster at WGSN. As consumers started looking for more than just the physical end-product, stores followed suit by providing well-rounded experiences that represented their brand ethos.
Footwear brand Vans hosted its ‘House of Vans’ pop-up in London last year, which combined BMX culture through a cinema, cafe, skate ramp, and music venue. Similarly, Dr Martens, a UK footwear retailer, opened its first ‘beacon’ store, featuring a customisation station and in-store events.
Andy Sumpter, a retail analyst from Sensormatic, thinks that focusing on differentiating physical retail from online shopping is an important place for investment.
By creating in-store experiences for customers, stores can distance themselves by offering something new to the online shopping experience. This doesn’t only include “cool, new features, but actually just really good service,” says Sumpter.
With the cost-of-living crisis driving consumer behaviour in the current economic climate, consumers are prioritising value in their shopping experience. Whether they’re physically evaluating a product before purchase or consulting an employee, consumers want to make sure their money is being well-spent.
As well as the cost of living, digital fatigue is impacting how consumers shop, according to WGSN’s 2026 prediction for retail spaces. This has led to consumers searching for escapism, driving them to in-person shopping.
Lala Books, based in Camberwell, leans into this by hosting regular poetry readings and events. Their founder, Danielle Moylan, invests in these events to provide a community-driven space for people to attend that isn’t the pub or a bar. “I think what the people around us really value the most is that it is a place you can come, meet people, and be welcomed,” she says.
Investing in building a community is a key point to note for physical retail in 2026. Sitting in the realm of what WGSN is calling the transformation economy, consumers will look to gain something more tangible from shopping – this could include improving their life or the environment, learning a new skill, or feeling like they belong to a community.
“I think retailers are increasingly recognising that if you can find some way of delivering measurable change in people’s lives; you can really win over a much more loyal and sticky consumer,” says Saunter.
Laura also notes how fickle younger consumers have become as they face option paralysis in their shopping experiences. Online return deals, such as free delivery and extended return periods, once drew consumers in, but with retailers like ASOS now banning serial returners from their site, the once enticing deal of returns is becoming stagnant.
Calling returns an ‘Achilles heel’ of online retail, Sumpter highlights the cost of this for online businesses, with one-in-three online purchases being returned.
Instead, he would prefer to see in-store returns made easier for customers as they head back to the high street. Creating this ease will take away from what once was the ease of online shopping and bring it back to physical retail.
Evolving with technology is another way stores can entice customers into their physical space. Whilst WGSN’s recent report touches on digital fatigue, it also raises the importance of physical AI. Saunter says, “where AI is helpful is where it frees humans to do more higher value work.”
Supporting retailers at the back end is where technology can come into play, rather than reducing spaces to purely technology-focused experiences. This could look like supporting stock replenishment, smart layouts or navigation, or RFID-enabled self-checkouts – something which Japanese retailer Uniqlo introduced more than a decade ago.
For Saunter, as AI offers a shortening of “the journey between inspiration and transaction,” it is important now that stores adapt and evolve with the needs of consumers who have grown tired of impersonal and faceless retail.
“I don’t think anything will ever replace the human connection in stores.”
Featured image by Vitaly Gariev via Unsplash.