Retail Brew // Morning Brew // Update

July 02, 2026

It’s Thursday, and we’re just past the halfway mark of 2026, two days before the Fourth of July. So we’re ~~OOO~~ marking the occasion by resharing some of our most popular stories of the year to date.

In today’s edition:

—Erin Cabrey, Andrew Adam Newman, Jeena Sharma, Alex Vuocolo, Vidhi Choudhary

STORES

State of the industry

Marketing Brew

Amid the AI frenzy, retailers are still placing bets on brick and mortar, just more carefully. Nearly 78% report moderate or significant in-store investment, and about a third maintain a balanced mix of physical and digital channels, according to Morning Brew Inc. data. With more than 5,000 store openings forecast in 2026, according to Coresight Research, this wave is less about rapid expansion and more about strategic refinement.

Stores are increasingly viewed as brand builders, not just transaction hubs. In a survey conducted by Retail Brew, 62% of retailers said they’re investing to strengthen brand perception, and 58% to boost loyalty, outpacing conversion goals. Experiential formats reflect a push to create immersive, community-driven spaces that digital channels can’t replicate.

AI adoption is widespread at 82%, but it’s largely working behind the scenes in marketing and operations rather than reshaping the sales floor. All of this comes as 76% of retailers report heightened price sensitivity and more than half have raised prices amid tariff pressures, making stores a key differentiator in a cautious economy.

Read the whole report here.

Sponsored By Rithum

Your brand + AI visibility = ?

A new report from Rithum and Retail Dive looked into how LLMs are impacting commerce. Their data shows what patterns are emerging as more shoppers use AI to research, compare, and make purchase decisions.

The survey found that 70% of consumers have used an LLM to shop in the last three months. And nearly 1 in 5 shoppers have bought from a brand they discovered for the first time through an AI recommendation.

So, what can brands do to show up in LLMs? Rithum suggests an approach that covers all four stages of the agentic commerce funnel. That’s why their platform 1) advises on catalog quality, 2) delivers direct feeds into LLMs, 3) tracks how products rank inside AI results, and 4) supports checkout inside AI environments.

Take a look through the report for more detailed insights on how brands and shoppers are adapting to AI search.

E-COMMERCE

Search and deploy

Getty Images

When you search for a product on, say, ChatGPT and a brand shows up as an organic response, that’s AEO at work.

AEO—or answer engine optimization, sometimes also referred to as agentic engine optimization—is a relatively new acronym that has ended up firmly in retail circles ever since public AI surfaces became a popular way for people to search for and discover products online.

While SEO is traditionally the way to rank high in Google search results so users can find brands organically as they search for items—the SEO industry is worth more than $80 billion and is on track to more than double to more than $170 billion by 2030, according to data from MarkNtel Advisors—AEO is the technical layer that gets a brand mentioned in AI-generated answers. It’s the next iteration of what showing up in a Google search result used to be.

Now, AI-powered search is changing how people shop for and discover brands, alongside AEO and GEO (generative engine optimization), which some experts in the industry refer to interchangeably.

Keep reading here.—VC

RETAIL

Dead read

Victoria’s Secret

We’re halfway through 2026 if you can believe it, and if pageviews are any indication, it seems our readers really like stories about stores and agentic commerce. Here’s a midyear look at our most read stories of the year so far:

SWAPPING SKUS

Some of our favorite retail reads from our sibling Brews.

Staring contest: Is a brand rivalry mutually beneficial, or a risky proposition? (Marketing Brew)

Something to shoe on: Cole Haan’s path to longevity and growth. (Revenue Brew)

Sbuxing the trend: Why Starbucks is planning to pay its employees on a weekly basis, rather than biweekly. (HR Brew)

Shopping in LLMs: Research from Rithum and Retail Dive found that 58% of shoppers blame the brand when an AI recommendation contains incorrect product information. Learn how you can avoid errors and show up accurately.*

^{*A message from our sponsor.}

JOBS

Tired of one-size-fits-all job boards? CollabWORK highlights roles that reflect your interests and goals—delivered through communities like Retail Brew. Click here to explore the full job board.

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