AI is reshaping the retail real estate sector, but not in the way many industry professionals once feared.
Instead of replacing brick-and-mortar stores, AI is making them more important, according to a new report from Colliers.
According to Colliers’ report, How AI Is Redefining Retail Real Estate in 2026: What Landlords, Developers & Retailers Need to Know, successful retailers are now relying on physical locations to support both digital and in-person commerce.
According to the Colliers report, 71% of retailers are expanding their physical footprints in 2026 even as AI-driven shopping tools and e-commerce continue to grow. The reason? Physical stores are evolving into fulfillment centers, logistics hubs and technology-driven customer experience destinations.
The report says that one in four online orders is already fulfilled through a physical store. That figure is projected to climb to 35.4% by 2030, illustrating how critical retail locations have become to the modern supply chain.
At the same time, Buy Online, Pickup In Store, otherwise known by its acronym of BOPIS, continues to gain traction. Colliers reported that BOPIS now accounts for 8.9% of total retail revenue. Yet only 18% of retailers say they have fully optimized the process, leaving room for further investment in store design and infrastructure.
The growing role of AI in shopping behavior is also influencing how retailers approach their real estate strategies. According to Colliers, nearly half of shoppers already use AI for product recommendations, while about 75% say AI significantly affects their purchasing decisions.
Consumer adoption of AI shopping agents is expected to surge from 19% to 46% by the end of 2026, according to the report.
That rapid adoption is pushing retailers to invest heavily in technology. Colliers found that retail leaders increased IT spending by 52% during the last five years, compared to just 13% among slower-moving competitors. Those investments appear to be paying off. The report projects that tech-forward retailers will see profits grow nearly three times faster than their competitors in 2026.
The impact is also showing up inside stores. According to Colliers, retailers that were early adopters of in-store AI technology are reporting 79% higher store sales growth and 34% stronger BOPIS performance than slower-moving competitors.
Department store chain Macy’s offers one example cited in the report. Colliers said customers using Macy’s AI-powered shopping assistant spend roughly 400% more than other customers.
The technology shift is also creating new demands for landlords and developers. Retailers now need properties that can support advanced logistics systems, real-time inventory management and integrated data infrastructure.
“In-store technology has a history of being underestimated,” said Anjee Solanki in the Colliers report. “The pattern is repeating, but the cost of delay is steeper this time because retailers now require fulfillment-grade infrastructure, and integrated data systems that cannot simply be added later.”
Despite the continued growth of e-commerce, Colliers reported that 85.1% of U.S. retail sales still take place in physical stores.
