The National Retail Foundation (NRF) estimates American consumers will finally surpass $1 trillion in holiday shopping this season, which represents a roughly 4% increase since 2024 and the most expensive year to date. It’s going to be an incredibly busy December for retailers leading straight into January’s reverse logistics stretch.

Despite the inherent challenges ahead, 2025's holiday season has served as a litmus test for how well-prepared suppliers and retailers are for the future. Retail is changing rapidly, especially with the industry’s willingness to adopt technology that help consumers on the front line. We expect to see even more transformation in how retailers and suppliers work together in the coming year

In 2026, we expect suppliers to focus on centralizing their internal operations with a more meaningful adoption of advanced technologies. This will then enable the regionalization of products to deliver goods to consumers at record speed. Centralization leading to regionalization may seem like an unexpected approach, but it’ll define the year ahead.

Centralizing Operations

While agentic AI was the buzzword of the year, equally important was the groundwork allowing businesses to centralize their internal operations. 

Creating a unified operating model that brings together every aspect of the business, from finance and procurement, to planning and logistics, helps to standardize processes and remove inefficiencies. The single "command center' consolidates key data across the company, including customer demand, inventory levels and supplier performance, to help enhance forecasts and support more informed decision-making. Companies are increasingly asking how they can centralize supply chain processes and teams, as well as how partners can help accelerate this process by externalizing supply-chain-as-a-service (SCaaS).

This movement has been consistently gaining steam over the past year, as businesses have sought to manage exorbitant amounts of data and navigate a challenging (and rapidly changing) pricing environment. Think of this centralized command center as the “brain” of the supply chain operation, analyzing data to develop actionable strategies. From there, the regionalized “limbs” of the operation can begin to execute at a local level, which will be critical to managing new and emerging consumer demands.

Algorithmic Supply Webs

Today’s supply chain is less a straight line, and more a dynamic web of nodes that are frequently changing, reconfiguring, and adapting to external factors. We often hear from retailers that they simulate thousands of scenarios every day, ranging from rerouting shipments to creating new transportation paths on the fly. This is especially common in industries with high volatility, like grocery and fashion.

In this case, the “brain” of the operation provides data-driven indicators as to the most efficient path from production to delivery. The algorithm can then determine which location should fill an order based on demand, logistics, capacity, fuel cost and more. However, it’s crucial to recognize that data-driven algorithms and AI are only part of the solution. The real value emerges when these tools are paired with process intelligence, using human expertise to fine-tune AI models and improve scenario planning.

Supply webs are becoming indispensable. As consumers increasingly expect faster delivery and seamless experiences, retailers who fail to adopt these innovations risk falling behind in delivering a positive customer experience.

Microfactories Near the Customer

When shoppers want their goods quickly, they’re going to find a way. Ever since Amazon Prime changed the game with free two-day shipping, the average consumer has come to expect more speed and personalization with the products they purchase.

This trend has spurred the growth of localized, AI-driven microfactories among retailers. From 3D-printed fashion accessories to limited-run beauty items and electronics assembled close to demand centers, microfactories enable retailers to put goods closer to the consumer to minimize waste, navigate tariffs, speed up delivery and reduce costs. Enabled by a centralized data control center, microfactories can help determine what to produce, when to produce it, and how much to produce to match supply with demand.

But here’s the reality check. These microfactories come with logistical complexities, initial setup costs, and the need for specialized workforce. The solution is to lead with strategic partnerships, modular approaches and careful planning, and then turn all that into smart investments in the long run.

Brick-and-Mortar Store as the New Factory

Consumers have a seemingly endless store of shipping options at their disposal, including shipping from the actual brick-and-mortar location, one-day pickup, and delivery services like Instacart. These modes of shipping based in the actual store make the inventory on the shelves just as important as the inventory in the warehouse.

Retailers are increasingly looking at their in-store availability as a key indicator of stock, consumer demand and replenishment. The biggest challenge they face is data, and that’s where inventory visibility at all levels of the supply chain – from in-store to their multi-level distribution network – becomes critical. Retailers can use this data repository to distribute stock across regional hubs, creating pools of inventory throughout their brick-and-mortar locations to ensure goods are close to the consumer.

The Future of Retail Begins Now

Our conversations with retailers have yielded a clear picture of the coming year. As technology continues to redefine consumer expectations, retailers and suppliers must embrace centralizing internal operations and building data-driven decision platforms are just starting points. We’d highly recommend investing in partnerships, along with upskilling your existing teams on data-driven analysis. These foundational steps will enable businesses to adapt quickly, scale efficiently, and deliver personalized experiences.

In the long term, these trends will fundamentally reshape the retail landscape. Localized production through microfactories can lead to a more decision-ready supply chain. Supply webs, enhanced by AI and process intelligence, can help businesses navigate volatility with greater agility. Meanwhile, the transformation of brick-and-mortar stores into fulfillment hubs will create a more seamless omnichannel experience.

As these innovations take hold, the retail industry will move closer to a future where supply chains are deeply integrated with consumer behavior. The choices made now will determine who thrives in the retail landscape of tomorrow.

Tanguy Caillet is the supply chain services business leader for Genpact

Charisma Glass is Genpact's global head of retail and applied advisory services