Top Retail Packaging Trends to Expect in 2026
January 31, 2026 Note: Excerpt from Top Retail Trends of 2026: What to Expect | Smurfit Westrock by Smurfit Westrock
With 2025 in the rearview mirror, manufacturers and retailers have set their sights on 2026. While the immense growth of AI use might be the only thing guaranteed this year, just like the market, it will also require retailers and suppliers to remain agile as they shape retail priorities.
Seeing the potential to streamline business, retailers have quickly adopted AI applications. 87% of retailers have already deployed AI tech in at least one area of business, and 60% of retail companies are planning to increase spend on AI. This only makes sense as it complements the industry’s current focus on e-commerce, which is expected to grow from $6.4 trillion in total sales in 2025 to $7.9 trillion by 2028.
The success of AI in retail is contributing to additional market volatility as consumers remain concerned about a soon-to-burst AI bubble, which would particularly impact the top third of shoppers — the same ones who are keeping the economy going. In November, the global volatility index (VIX) that measures the market’s 30-day expectation of volatility for the S&P 500 hit 26.3, its highest point since U.S. tariff announcements caused it to surge past 50 in April. (The average hovers around 20.) As many tariffs remain in place, so does the volatility.
Considering these and other factors, Smurfit Westrock’s retail expert, Leon Nicholas, Vice President of retail insights and solutions at Smurfit Westrock, generated his list of top retail trends for 2026. In addition to the trends, he shares how they will impact packaging and merchandising priorities in the new year.
Tariff Mitigation Strategies
While the administration has been quietly rolling back tariffs on some items, many remain in place and could be re-imposed without much warning. Though tariffs have been largely absorbed by manufacturers and retailers to date, Goldman Sachs claims that around 55% of them will be absorbed by consumers moving forward. That will leave retailers and manufacturers to absorb or mitigate 45% of tariff costs.
Packaging providers will play a critical role by leveraging both sustainable supply chain optimization and expertise in ecosystem efficiency. Experienced supply chain analysts can evaluate supply chains for opportunities that generate greater efficiency, reduce costs and lower carbon emissions.
Consumers Will Need to Offset Tariff Impacts
Consumers will try to manage the 55% of tariff costs left to them, which Goldman Sachs suggests may rise to as much as 70% by the end of the year. With most consumers already feeling the pinch from inflation, Nicholas says they will continue to “trade down” or “trade out” when it comes to purchasing behavior.
Affluent consumers will choose to buy more bulk products. This is good news for membership clubs like Costco and Sam’s Club, which have seen a surge in growth thanks to rising costs. Costco membership fee income rose an astonishing 14% in its fiscal 2025 year. Consumers with less, however, will trade out, meaning they’ll choose not to purchase or purchase smaller quantities when they can afford to spend the money.
Success of Emerging Brands Will Force Established Brands to Pivot
A majority of product innovation is concentrated among emerging brands; while those brands account for less than 2% of market share in their categories, they achieved 39% of category growth in 2024, up from 17% in 2023. 2025 data will likely show even greater impact.
Packaging providers need to be able to meet demands from emerging brands, private labels, and large-brand innovators in an accelerated fashion. Development and design teams that can offer rapid prototyping and production in the context of high-impact design will win.
Brick-and-Mortar Merchandising Will Evolve
While e-commerce continues to grow at a faster pace than brick & mortar, around 80% of all shopping still takes place in a physical store; even by 2030, Kantar forecasts that stores will maintain a 76% share of sales. However, the power of brick and mortar will not eliminate the need for merchandising to evolve. A new level of in-store merchandising is emerging, emphasizing co-equity drivers that will vary by retailer.
As retailers play into shopper desires, shopper decision trees will determine a retailer’s profit architecture and drive shelf merchandising going forward. Think of shelf sections dedicated to emerging brands, or whole aisles dedicated to private label products.
Manufacturers Will Further Focus on Retail Giants
Kantar reports that Walmart, Amazon and Costco combined will account for a third of all U.S. retail sales and 32% of all U.S. online spending in 2025 for the retail chains they track. Kantar expects these same retailers to generate 57% of all retail growth through 2030. The message is clear: Retail scale and growth will be concentrated among three powerful players.
Leading packaging suppliers should provide expertise on the go-to-market strategies of these retailers and how they are manifested in their respective shelf, display, sustainability and ecommerce requirements.
Connected Packaging Will Broaden Its Reach
In 2026, connected packaging will start to incorporate AI tools not only to drive supply chain efficiencies, but also to track circularity, guide purchase decisions, and serve as a shopper portal to deeper marketing engagement.
As connected surfaces multiply, manufacturers and retailers will now be able to capitalize on their investments to support supply chain efficiencies, relying more heavily on real-time traceability. For example, electronic shelf labels (ESLs) will communicate with smart packaging to indicate inventory levels, which can then inform online shoppers about product availability before placing their orders. Connected surfaces will also educate shoppers about how they can recycle products and drive sustainability scorecard accountability for manufacturers and retailers alike. Additionally, we’ll see more use of connected packaging to market to shoppers in dynamic ways.
Sustainability Commitments Will Deepen
Consumer demand is increasing steadily, as are regulations requiring sustainability and transparency from producers globally. As a result, sustainability will remain critical to manufacturers, retailers and shoppers in 2026, and, if anything, deepen their commitments. Furthermore, shoppers, especially in the Millennial and Gen Z generations, express a preference for transparent brands that prioritize sustainability. Not coincidentally, emerging brands’ success with providing greater sustainability further drives share growth among those groups.
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