If Part One of this year’s Predictions series focused on how small businesses are building, growing, and adapting, Part Two gets right to the heart of what keeps many owners up at night: money. How easy—or hard—will it be to access capital? What happens if interest rates don’t fall as quickly as hoped? And how should small business owners think differently about cash flow, payments, and financial risk heading into 2026?
The reality is that the financial landscape for small businesses is changing fast. Traditional banks are pulling back in some areas, fintechs are stepping in, and AI is reshaping everything from credit decisions to cash-flow forecasting. At the same time, costs remain high, consumer demand is uneven, and speed is becoming just as important as price when it comes to financing.
This article brings together insights from lenders, economists, fintech leaders, and small business advocates to help you understand what’s shifting—and what it means for your business. You won’t need to act on every prediction here. But understanding where capital is flowing, how financial tools are evolving, and where risk and opportunity intersect will help you make smarter decisions in a year that will reward preparedness over patience.
Money & Finances
Lending, Banks & Fintech
Loan Outlook
Quick take from what we’re seeing on the ground: Q1 2026 won’t bring real relief for sub-$5M small business loans. Capital will loosen for corporates and large real estate, but small business credit boxes are likely to shrink as banks prepare for Basel III and shed operationally heavy loans.
Everyone’s focused on whether rate cuts will unlock lending, but that’s not what our data shows. The real barrier for small businesses right now isn’t the price of money, it’s the speed of it.
Even a “cheap” bank loan is useless if it takes 45-60 days to approve. For healthy businesses, the cost of waiting now outweighs the cost of interest by more than 4x.
—William Stern, Founder, Cardiff
The Evolution of Lending and Credit Decisioning
Access to credit has long been a challenge for small businesses, especially those with thin or nontraditional credit files. In 2026, advanced analytics, permissioned open finance data, and AI-driven risk models will redefine how lenders assess creditworthiness. In conjunction with information like credit scores, lenders will tap into real-time transaction data, behavioral insights, and even supply chain signals to make faster, more inclusive decisions. This evolution will unlock new financing opportunities for small businesses, enabling personalized credit products and dynamic lending terms that adapt to business performance.
—Mark Barnett, global head of Small and Medium Enterprises, Mastercard
The End of “Rate Waiting
Small business owners waiting for interest rates to return to near-zero in 2026 are betting on a ghost. The data signals a ‘higher-for-longer’ reality where the cost of capital settles into a new normal. The smartest entrepreneurs will stop obsessing over the rate and start obsessing over the ‘Cost of Delay.’ In 2026, the competitive advantage will go to the businesses that pay for speed to secure inventory and talent, rather than those bleeding opportunity while waiting for a cheaper loan that never comes.
—William Stern, Founder, Cardiff
Stronger Demand for Financing
SMBs are heading into 2026 facing a challenging dual-pressure economy: consumer demand is softening while operating costs remain high. This dynamic will drive record inquiries for fast, flexible financing, especially as traditional banks tighten credit and push businesses toward digital lenders and revenue-based financing. Speed will become the new standard, and approval workflows will shrink from days to minutes thanks to API integrations, direct bank data access, and automated document ingestion.
For lenders and SMBs alike, 2026 will be a year defined by speed, technology, and global reach. As we head into 2026, SMBs will navigate a rapidly evolving economic and technological environment. Here are several key trends shaping the future:
Surge in revenue-based financing: Expect double-digit growth in revenue-based financing as businesses prioritize speed, cash flow alignment, and flexible repayment structures. Restaurants, retail, e-commerce, healthcare, and cross-border ventures will lead this trend.
Lending becomes a “first click” experience: Approval workflows will shrink from days to minutes. Thanks to API integrations, direct bank data access, and automated document ingestion, SMBs will expect near-instant application processes.
Dual pressure economy drives financing demand: SMBs will face softening consumer demand coupled with elevated operating costs. This squeeze will lead to record inquiries for fast, flexible financing. With traditional banks tightening credit, digital lenders and revenue-based financing will become the go-to options.
AI adoption links to funding success: SMBs leveraging AI for accounting, forecasting, and operations will qualify faster due to clearer financials. This will widen the gap between AI adopters and those lagging behind.
—Rohit Arora, CEO, Biz2Credit | Biz2X
The Rise of “CapEx over Opex”
We are seeing a massive shift in loan utilization that will define 2026: Borrowers are pivoting from funding ‘people’ to funding ‘productivity.’ With wage inflation remaining sticky, small businesses will use capital to buy automation, software, and equipment (CapEx) to permanently reduce their reliance on expanding headcount (OpEx). The 2026 borrower isn’t hiring more hands; they are buying better tools to make their current hands faster.
—William Stern, Founder, Cardiff
SMBs Will Become the Most Important Segment for Banks and Credit Unions of All Sizes
SMBs represent a massive yet under-leveraged opportunity for financial institutions. According to the U.S. Chamber of Commerce, SMBs contribute nearly 44% of the United States’ GDP, but they remain underserved by traditional banking models. In 2026, this will change.
Financial institutions, from community banks to national conglomerates, will be forced to evolve from passive money holders into active business enablers. The winning strategy will be to embed deeply into the SMB workflow, offering integrated solutions that go beyond banking: point-of-sale processing, inventory management, cash flow tracking, and automated AP/AR services.
As digital currencies gain traction, SMBs will seek banking partners that can help them accept, manage, and convert digital assets seamlessly. Institutions that integrate digital currency capabilities into their SMB offerings will unlock new revenue streams and deepen customer loyalty. Banks and credit unions that position themselves as the central operating system for SMBs will unlock new revenue streams, deepen customer loyalty, and gain a competitive edge in a market that is both vast and ripe for disruption.
—Matt Wilcox, Deputy Head, Financial Solutions and President of Digital Payments, Fiserv
The “Great Bank Retreat” of 2026
In 2026, we will see the traditional banking sector effectively abandon the sub-$1 million business loan market. Driven by the looming ‘Basel III Endgame’ capital requirements, big banks will be forced into a defensive crouch, hoarding capital to satisfy regulators rather than deploying it to Main Street. This isn’t a cycle; it’s a structural exit. We predict that by Q4 2026, private fintech lenders will officially surpass regional banks as the primary source of growth capital for American small businesses.
—William Stern, Founder, Cardiff
Payment Solutions
Invisible Payments, Visible Impact: The rise of embedded finance
Small businesses are increasingly seeking simplicity and speed in managing finances. In 2026, embedded finance will continue to become a core part of everyday business operations. Expect payment capabilities integrated directly into accounting platforms, inventory systems, and even social commerce channels—reducing friction and freeing up time for growth. For small businesses, this means fewer logins, faster access to working capital, fewer headaches juggling between platforms, and the ability to offer customers flexible payment options without complex integrations. Finance will feel invisible, but its impact will be transformative.
—Mark Barnett, global head of Small and Medium Enterprises, Mastercard
State Mandates Will Help Boost Retirement Savings for More Workers on Main Street
For decades, employees of small businesses were largely left out of workplace retirement savings. Nearly 70 million Americans still don’t have access to a retirement plan at work—and many of them work for small businesses.
That’s finally changing. At least 20 states have now enacted legislation requiring employers to offer retirement plans, and the SECURE 2.0 Act provides tax credits of up to $5,000 per year for small businesses that start offering 401(k)s. And these policies work, saving small businesses millions each year.
The math is simple: workers are 15 times more likely to save for retirement when their employer offers a plan. Some industry forecasts suggest that by the end of 2026, nearly 90% of small employers will offer some form of retirement benefit—up from 46% just four years ago.
This trend marks a tectonic shift in retirement savings and wealth creation among employees of small businesses and marks the biggest expansion of retirement coverage since the 401(k) was invented. In 2026, we expect this trend to hit critical mass, leading to much more small-business retirement savings.
—Andrew Chamberlain, Principal Economist, Gusto
Cash Flow
Intelligent Cash Flow Management as the New Small Business Superpower
Cash flow remains the lifeblood of small businesses, and in 2026, AI-powered tools will continue to make managing it smarter and more predictive. These solutions will focus on analyzing transaction patterns, seasonal trends, and even macroeconomic signals to better forecast liquidity needs and recommend actions—like adjusting payment terms or accessing short-term credit—before issues arise. By combining real-time payments with predictive analytics, small businesses will gain unprecedented visibility and control, turning cash flow from a constant worry into a strategic advantage.
—Mark Barnett, global head of Small and Medium Enterprises, Mastercard
Federal Reserve
Easing Interest Rates Will Finally Pay Off for SMBs, But Not Until the Second Half Of 2026
With the third rate cut of 2025 and the Fed showing division over forthcoming cuts amid a weakening labor market, we may begin to see a surge in new small business ownership that has largely been absent amid the volatility of the last few years.
—David Quinn, CFO, Bluevine
2026 Will Get Off to a Sluggish Start
When the Federal Reserve trimmed its key interest rate by a quarter point in December, it “cited a riskier employment picture in its decision, while its longer-range goal remains getting inflation to 2%. It projected just one cut in 2026 and one in 2027.”
I think the economy will start slowly in 2026, likely with a sluggish first quarter. A pickup depends on inflation and interest rates.
In the search industry, we have fewer new jobs available than usual right now.
—Barry Cohen, Managing Director, Rockwood Search
Customer Service & Experience
Personalization Becomes a Business Growth Advantage
I see 2026 as the year personalization turns a corner for growing businesses, moving from a marketing tactic to a fully realized value proposition for customers. AI is raising expectations across the board, and, when done right, it can turn what were primarily one-way messages in separate channels into an omnichannel experience that feels truly curated and constantly updated.
But not everyone is keeping up. With 98% of mid-market marketers believing AI will improve effectiveness—but only a third using it widely—there’s still enormous potential for AI to turn fragmented data into tangible value.
In the coming year, we’ll see more businesses drive loyalty and boost revenue through attentiveness: retaining a customer’s context, following up when it matters, and earning trust through transparency and choice.
—Matt Idema, Chief Marketing Officer, Mailchimp
The New Gold is in Micro-Communities
Thanks to new technology and better access to organized data, business owners will see the value in hyper-targeted, high-trust micro-communities. They will form and strengthen real relationships, yielding exponential loyalty and growth. These communities will also better protect them from market downturns and outside competition. It’s quality over quantity.
—Brian Moran, CEO, Small Business Edge
Forming Human Connections
In a world where AI is the new buzzword and there are so many new ways to create efficiencies in the business through technology, businesses need to be mindful of maintaining a human connection. The end consumer is saying, very loudly and clearly, that they still want that person-to-person touch. Businesses that can resonate with the end consumer and truly be pillars of the community, like we strive to be, are the ones that will be successful in the long run.
—Tony Zaccario, President and CEO, Stretch Zone
The Great Re-Humanization: Consumers Choose Businesses with Real-Human Support
2025 was the year businesses tried AI and chatbot support at scale for tasks such as site creation, content, and automated support. But many found the outputs inconsistent, tone deaf, or frustrating. And in the end, over 90% of consumers still prefer a real human when support matters, and a large majority say human-agent availability should be non-negotiable.
In 2026, the winners will be those who resist the bot-only rush and build hybrid experiences—combining AI’s speed and scale with human empathy, judgment, and brand sensitivity. Onboarding specialists, creative advisors, and real WordPress experts will partner with AI to guide SMBs through setup, optimization, and growth. In a noisy AI era, human-AI collaboration becomes the new gold standard, giving SMBs the clarity, confidence, and trust their customers still crave.
—Sachin Puri, CEO, Bluehost
Security
Workforce Security Platforms
With the increased adoption of AI-usage, the frequency of serious data breaches increased as well. It has become essential for every business to recognize the importance of integrated security to safeguard its operations. In 2026, we’ll start seeing organizations of all sizes, including small businesses, moving toward integrated workforce security platforms and ecosystems that give them a decisive advantage. As attackers are using AI-driven threat models, traditional solutions are losing relevance, and unified security stacks will become essential to protect employees, devices, and business data.
—Chandramouli Dorai, Evangelist for Cyber Solutions and Digital Signatures, Zoho Corporation
Why Identity Intelligence Will Separate Market Leaders from Breach Headlines
In 2026, identity will either be your company’s strongest differentiator or its weakest link. We’re entering an era where AI is transforming both business and fraud. The cost is not just revenue loss, but long-term reputational damage, regulatory exposure, and a complete erosion of customer trust. Many companies are still relying on outdated verification methods such as static data, passwords, and fragmented KYC checks, while attackers use tools that didn’t exist two years ago. This asymmetry will define the winners and laggards in the next phase of digital business.
Identity verification must become continuous, adaptive, and anticipatory, predicting and preventing risk before it occurs while remaining nearly invisible to the end user. It represents the evolution from a point-in-time identity check to a continuous, connected understanding of who someone truly is.
Identity intelligence combines data from identity, historical, behavioral, and risk checks to build a dynamic view of a user over time. Instead of verifying once and hoping for the best, organizations can continuously assess trust in the background, adapting to new signals as they emerge. When fraud happens, customers don’t blame the criminal; they blame the brand. The leaders who understand that digital trust and identity intelligence form the foundation of a modern business model, not just a security protocol, will be the ones who scale safely, expand globally, and protect their reputation.
—Robert Prigge, CEO, president, and co-founder, Jumio
Cybersecurity as a Growth Imperative
As digital payments scale, so do cyber threats. Mastercard’s latest research of 5,000 small and medium businesses in key markets across the globe shows how these businesses are increasingly targeted and vulnerable. Nearly half of SMBs report that their current business has experienced a cyberattack, and the impact is devastating—almost one in five SMBs that suffer an attack end up filing for bankruptcy (18%) or closing entirely (17%).
Why is that the case? One drive is how the rise of AI has become a double-edged sword: it enables criminals to scale and personalize attacks through convincing phishing emails, deepfake scams, and automated malware. At the same time, AI is powering next-generation fraud detection and identity verification, helping businesses stay ahead of evolving threats.
In 2026, cybersecurity will become a core business strategy—not just an IT function. Expect growth in turnkey security solutions embedded in payment platforms, AI-driven fraud detection, and digital identity tools that protect both businesses and their customers. For SMBs, investing in security will no longer be optional; it will be essential for trust, compliance, and long-term growth.
—Mark Barnett, global head of Small and Medium Enterprises, Mastercard
Security Has to Evolve—It’s Not Just About the Perimeter Anymore
With all this new technology in the workplace, security challenges are only going to get more complex. The old model of just protecting the edges of your network isn’t enough. By 2026, companies will need to take a more “fused” approach to security, where protections are built in at every layer, from the edge to the cloud to the core. As AI is woven into everything, we’ll need smarter, more adaptive security that can keep up with new threats, and we’ll have to think about how security and network management work together, not in silos.
—Snorre Kjesbu, SVP & GM of Collaboration, Cisco
Locking Down ALL Data
For years, cybersecurity has focused on locking down devices. We’ve wrapped them in management software, antivirus, and access controls, all in an attempt to contain data that should never have been there in the first place.
Every year, businesses pay more and more for corporate devices under the assumption they’re keeping corporate data separate from users’ personal devices. However, with apps like Outlook, Excel, and Google Sheets all accessible on mobile devices, a breach of a personal device is a breach of company data.
Moving into next year, AI-generated exploits will continue to be created and deployed in minutes. Our mobile device-driven society has extended the attack surface beyond the control of IT and cybersecurity staffs. We must concentrate on reducing the attack surface and protecting our proprietary, sensitive, and personal data with the same level of care.
—Matt Stern, CSO, Hypori
Staying Ahead of AI-Driven Fraud
AI has made it alarmingly easy to create fraudulent digital identities. The once-reliable barrier of biometric authentication is being compromised by camera injection attacks, in which AI-generated or manipulated images are injected into live video streams to deceive even the most sophisticated security systems.
We are now entering an era defined not just by AI-driven fraud but by a perpetual arms race between adversarial AI and defensive AI. Instead of relying solely on static or layered defenses, businesses must adopt autonomous, connected identity defense systems that continuously learn, adapt, and collaborate across ecosystems. These intelligent systems both fight fraud and predict and prevent it, sharing insights across networks and adapting in real time to emerging attack vectors.
Multimodal liveness detection, including combining visual, auditory, and motion-based signals, will remain critical, but its real power lies in its integration into a broader identity intelligence framework. This includes leveraging cross-customer fraud intelligence, behavioral biometrics, and transaction risk analytics to identify fraud patterns before they manifest.
In 2026 and beyond, the most resilient businesses will embrace a continuous, connected, and predictive fraud detection model. One that transforms AI from a reactive tool into a collaborative shield, capable of learning from every signal and staying one step ahead of even the most sophisticated fraudsters.
—Ashwin Sugavanam, VP of AI & Identity Analytics, Jumio
AI and Privacy at the Core of Future Fraud Prevention
AI agents are making fraud more accessible and personalized than ever before. AI agents are lowering the barrier to executing complex fraud schemes, making it easier for fraudsters to automate attacks. To combat such AI-driven threats, businesses need a multi-layered approach. To address the worsening deepfake crisis, they must implement real-time solutions, such as multimodal liveness detection combined with rich contextual intelligence. Additionally, to protect user data during verification and build trust, companies should leverage privacy-preserving technologies, like zero-knowledge proofs, to combat identity fraud. By securely verifying identities without revealing sensitive data, companies can maintain user trust while effectively combating fraud.
As we look ahead to 2026, fraud prevention in the digital space will be all about balancing security with user experience. Intelligent friction will become a critical strategy for businesses to address this challenge. By using AI and machine learning, companies will be able to tailor verification steps based on a user’s risk profile and behavior. Low-risk users will experience a smoother, less intrusive process, while high-risk users will be flagged for additional scrutiny. This approach will help organizations meet compliance and security requirements without alienating legitimate users. Much like how safe drivers benefit from lower insurance rates, those with a history of low-risk behavior will face fewer barriers, while suspicious activities will trigger more rigorous verification steps. This will help enterprises maintain security without compromising trust.
—Alix Melchy, VP AI, Jumio
Identity Verification Needs to be Continuous
By 2026, multi-factor identity verification will not only influence security strategy—it will define the fundamental architecture of enterprise protection. The legacy era of defending passwords and network perimeters is over. The real vulnerability lies at the point of human interaction, and the entire security stack is irrelevant if you cannot verify the user behind the keyboard. Social engineering has already shifted to AI-driven impersonation at scale, blending seamlessly into business workflows. Legacy authentication can’t stand up to that. Identity-first section isn’t a future plan—it’s the immediate, non-negotiable foundation of modern defense.
Forward-thinking organizations will treat identity verification as continuous and multi-layered—anchoring security to the human and their trusted device. The helpdesk, once the easiest way in, will be transformed into a high-assurance identity checkpoint powered by proof, not intuition, and strengthened with biometric liveness, device-bound credentials, and behavioral intelligence working together behind the scenes. Even the company’s help desk will become a high-assurance identity checkpoint. Automation is the new battleground: Attackers using AI to generate trust at machine speed; defenders must prevail by confirming authenticity with the same speed and precision. The companies that succeed in 2026 will build the capacity to verify what is real instantly.
—Bojan Simic, CEO, HYPR
Marketing
New Tools Will Change How Digital Marketing Success is Measured in the AI Age
Website analytics and social insights have been staples for years, but tracking visibility in AI results is the next frontier. Tools that show where your business appears in AI answers are just starting to gain traction. In 2026, I expect those tools to get more stable and easier to access, possibly even baked into the business sections of major AI platforms or available as add-ons. It will give small businesses a clearer picture of how customers discover them through both traditional and AI-driven search.
—Alicia Pringle, Senior Director, Online Marketing at Network Solutions
SMBs Win Big in AI Discovery
In 2025, businesses experimented with AI to speed up site creation and basic content updates, but results were fragmented and inconsistent, and most SMBs still relied on traditional search rankings to drive traffic. In 2026, discovery will make the 180º shift away from ranking towards recommendation.
Generative Engine Optimization (GEO) will help SMBs ensure their websites, content, and offerings are visible across AI-powered discovery platforms, from generative search to recommendation engines. By integrating site structure, content strategy, SEO, and AI-native visibility, SMBs can anticipate and meet evolving customer intent, scale efficiently, and compete with enterprise brands that once dominated digital channels. In this new paradigm, SMBs can punch above their weight and capture opportunities they might have previously missed.
—Sachin Puri, CEO, Bluehost
Conversational AI Will Fundamentally Change Discoverability
Search is becoming more conversational, and that shift is only going to accelerate. People are learning how to phrase their questions the way they’d ask a friend, which means long-tail queries will keep growing. Voice search will also play a bigger role. With AI built into most voice assistants now, accuracy is improving, and people feel more confident using them. Small businesses will need to understand how their customers phrase things in real life and create content that mirrors those natural questions and answers.
—Alicia Pringle, Senior Director, Online Marketing at Network Solutions
For Accountants
2026: The Year Accountants Audit Their AI (and Most Tools Get Written Off)
In 2026, the most successful accounting firms won’t be the ones deploying more AI. They’ll be the ones auditing what their AI actually delivers.
Accountants have been early tech adopters for decades, but it’s resulted in constantly growing tech stacks—clunky, fragmented tools that create more work than they eliminate. The data reveals the paradox: 97% of accounting firms admit they use technology inefficiently, yet 73% have roadmaps to adopt even more technology in the next year. That contradiction is ending.
2026 is the year accountants apply the same rigor to their tech stack that they apply to their clients’ financials. Instead of just adding more AI or adapting workflows to fit inadequate tools, they’ll demand tools that orchestrate seamlessly, eliminate busywork, and surface insights without manual intervention.
—Ariege Misherghi, General Manager and SVP, AP, AR, and Accounting Channel, BILL
A surge in corporate layoffs could lead to a new wave of small business owners
We’re currently seeing this via internal data in DC, which shows it growing at a far faster rate than its cohorts in Bluevine applications. With fintech tools making small business ownership more accessible than ever and layoffs/labor statistics continuing to show softness, we could see an influx of qualified SBOs rather soon.
—David Quinn, CFO, Bluevine
AI: the Super Assistant
2026 is the year accounting pros will rediscover the joy of their craft. AI shouldn’t be scary; it should be your always-on super assistant. Tech should take the mind-numbing work, so you can remember why you got into this business in the first place. It’s doing the work in the background while accountants and advisors do what only people can: build trust, listen deeply, and help clients move forward with confidence. The best firms will have an assistant that never sleeps and partners who finally can.
—Tammy Hahn, SVP of Product, Ignition
Breakthroughs Won’t Just Come From Using AI
They’ll come from accountants who refuse to tolerate technology that doesn’t deliver. The firms that thrive won’t be the ones with the most features in their stack. They’ll be the ones ruthless enough to cut the tools that don’t pass their audit.
—Ariege Misherghi, General Manager and SVP, AP, AR, and Accounting Channel, BILL
The AI-Powered Small Business CFO Emerges
With massive innovations in fintech in 2025, we’re looking ahead to 2026 as the year of the modern, AI-powered CFO—especially for mid-sized businesses that need to do more with leaner teams. Artificial intelligence has matured: models, agents, and AI-powered workflows can now proactively deliver insights that drive measurable business gains. All of this at a CFO’s fingertips has the potential to put the office of the CFO in the best position to proactively identify engines for growth and performance. Those that embrace AI will find their teams are more strategic, forward-looking, and nimble, while those that don’t risk falling behind and being unable to meet their company’s objectives.
—Ashley Still, EVP & GM, Mid-Market, Intuit
Data and Tech Driving Strategic Growth
High-growth firms will use data to work smarter, not harder—identifying which clients and services truly drive profitability. Technology will guide decisions, but humans will set direction and ensure growth stays aligned with purpose.
—Tammy Hahn, SVP of Product, Ignition
Expect to See a Continued Focus on More Specialized Financial Products for SMBs
While rates are continuing to drop, they are still higher than they have been for much of the last 20 years, which means that much of the focus in the fintech space will remain on companies demonstrating profitability and proving tangible use cases for their products. For the SMB segment, that will mean building tools that, when adopted, demonstrate enterprise value, such as assisting with and perhaps assuming entire departmental functions.
—Herman Man, Chief Product Officer, Bluevine
Privacy-Related Liability Exposure Will Increase
Expect biometric and privacy-related liability exposure to increase as more states adopt stricter statutes and expand rights of action (even without proof of injury) around biometrics, ad-tech, and data minimization. That shift will create new exposure for retailers, gyms, restaurants, and other consumer-facing small businesses that collect or rely on personal data.
And with severe convective storms becoming more frequent, urban flash floods will increasingly catch businesses off guard, particularly those outside traditional flood zones.
Tim McDermott, Director, P&C Insurance Product Management, NEXT Insurance
Retail
“Happier” Returns
Reverse logistics will become a core enterprise tech category: Since COVID, the number of online retail returns has grown exponentially, and consumers who love the convenience don’t seem to be stopping any time soon. The costs and complications of online returns require new technologies to handle the detailed logistics and routing, so this sector will continue to grow.
Reverse logistics departments and titles will become a standard part of any retail organization: It’s going to be just as important to have someone dedicated to your retail returns strategy as it is to your marketing, sales, and operations. In some categories, returns can make up to 30% of all purchases. It is business-critical to have someone responsible for managing returns and reverse logistics.
“Free Returns” will see its final days: Making returns free was introduced by retail giants like Amazon and Walmart, which could easily absorb the costs. Meanwhile, it’s hurt the environment with increased landfill waste, and it’s hurt smaller businesses that can’t afford to pay $15 to return a $10 item that already had free shipping. Companies like Nordstrom Rack are now charging for non-in-store returns and setting a new precedent that discourages wasteful consumer behavior of overbuying in mass.
Donation-as-a-disposition will become more mainstream: Transparency in operations is no longer optional. Younger generations are demanding that retailers consider their environmental impact, or they’ll take their dollars elsewhere. Companies that are used to quietly shoving product into the landfill or an incinerator or going to have a reckoning and be forced to find a way to make donation a regular part of their disposal flows.
Being sustainable will go from more expensive to more cost-effective: Many retailers have delayed making more sustainable operations and continued landfilling because of the costs. However, with the introduction of new EPR and DPP initiatives, being overtly wasteful or using environmentally unfriendly materials will result in fines up to $50,000 per day. Some of these requirements begin as early as 2027, forcing operational shifts in 2026.
—Disney Petit, Founder and CEO, LiquiDonate
Strengthening Fulfillment Resilience
As we move into 2026, retailers are navigating a landscape shaped by rapid technological advancement, economic uncertainty, and rising consumer expectations. Success in the year ahead will depend on how effectively businesses use intelligence, build flexibility into their operations, and strengthen fulfillment resilience.
- Intelligence and AI will be essential for businesses to optimize shipping, balance costs, enhance customer experience, and provide real-time, predictive insights for smoother operations.
- Cross-border challenges, such as complex policies and tariffs, will persist, requiring retailers to adopt flexible strategies to remain agile and navigate the dynamic global commerce landscape.
- Economic pressures and rising costs will drive merchants to diversify shipping strategies and balance costs as consumer spending shifts. According to ShipStation research, 41% of consumers say shipping costs are now a critical factor in their buying decisions.
- Fulfillment optimization will drive resilience during inevitable shipping disruptions, such as weather events or carrier capacity constraints. Merchants with backup plans in place, access to multiple carriers, third-party logistics providers, and strategically located warehouses will be better positioned.
- Rising consumer expectations will push retailers to innovate and keep pace with changing demand and shopping behaviors. Delivery speed and tracking experiences will be competitive differentiators. According to ShipStation research, 69% of consumers say they would switch brands if another retailer offered more convenient delivery or return options.
—Travis Rimel, VP Product Design, ShipStation
The Path Of Product Discovery to Purchase Will Increasingly Happen in AI Chatbots
I expect people to be far more comfortable asking AI for specific shopping help. Instead of browsing ten pages of results, they’ll ask an AI assistant for the best running shoes for flat feet or a list of gift ideas under $50, and they’ll trust those answers.
More customers will use generative AI to research services, especially home services, to cut down time and decision overload. We’ll also see more business and product recommendations built directly into those answers, with links people can tap instantly.
Built-in checkout through AI assistants isn’t far off either. I also expect paid placements to appear in some AI results, plus better transparency around visibility, ranking, and traffic coming from AI platforms.
—Alicia Pringle, Senior Director, Online Marketing at Network Solutions
The “Inventory Hedge” Becomes Standard
Supply chain volatility is back, and 2026 will be the year of the ‘Inventory Hedge.’ We predict a surge in ‘protective borrowing,’ where businesses take capital not for immediate sales, but to lock in bulk materials ahead of projected tariff hikes and inflation. Cash on the balance sheet is losing value; inventory on the shelf is gaining value. The smartest CFOs on Main Street are already treating their inventory as their best-performing asset class.
—William Stern, Founder, Cardiff
Rieva Lesonsky is the founder of Small Business Currents, a content company focusing on small businesses and entrepreneurship. You can find her on Twitter @Rieva, Bluesky @Rieva.bsky.social, and LinkedIn. Or email her at Rieva@SmallBusinessCurrents.com.
Illustration courtesy: Emilie Bardet for Unsplash+
